Change Management: Let’s Play the Blame Game

If a change initiative isn't working, don't automatically think it's the result of wrong-headed employee resistance

Welcome to our show, ladies and gentlemen.

Let’s play the Change Management Blame Game!

Annnnnd… Here’s our first question: a large group of well-chosen and engaged employees participates in a training program but the group’s behaviors don’t change. Who’s to blame?

Our second question: the same large group of well-chosen and engaged employees is the focus of a change initiative, but ultimately the group’s behaviors don’t change. Now, who’s to blame?

Who’s To Blame?

In the first scenario, you probably blamed the trainer or the designer of the training program.

They had an intelligent, motivated set of trainees whom they should have been able to mold so that their behaviors would change and the company would see cost savings or revenue gains. Yet, despite these favorable conditions, something–the curriculum, its delivery, its applicability to the business–went wrong. If the company wants to avoid a similar outcome in the future, it should change its training or the people leading its training. After all, you can hardly blame the lot of such eager employees, right? The training people are to blame!

In the second scenario, you probably blamed the employees who were the focus of the change initiative. They probably didn’t understand how important the change was. They resisted the efforts that were made for the company to realize cost savings or revenue gains. If the company is looking to avoid a similar outcome in the future, it should make changes to that miserable lot of employees who don’t know and don’t care about the company. After all, you can hardly blame the change initiative or the leaders of the initiative, right? The employees are to blame!

Don’t Automatically Turn to the Employees

By this point you’ve likely grasped that both scenarios are identical.

The company has one or more people charged with creating the conditions necessary to change the behaviors of a group of employees to achieve a desired organizational outcome.

Yet, when we insert the words “training program” and “trainer” into the failed scenario, it’s easy to blame those elements. In contrast, when we insert the words “change initiative” and “leader” into the failed scenario, it’s easy to blame… the employees.

In either scenario, the change agent and the change audience could be to blame, but playing the blame game gives us a different set of usual suspects to call on.

The point is not that managers should reconsider the intelligence and engagement of their employees because it’s likely they already invest heavily in talent assessment and management tools. Rather, the point is that managers should consider the idea that employees who fail to comply with a given change initiative may not be at fault.

Perhaps these employees are providing the so called “gift of feedback.” It is possible that the change is not as desirable as managers may think. There may be adverse consequences that they see and managers do not. Alternatively, it is possible the senior manager that is the “face” of the change initiative (i.e., a person rather than the initiative) has mishandled what should have been a compelling opportunity.

For example, in a training session, no matter how respected the trainer may be, if something was wrong, people would question both the message and the messenger. That logic should apply to change initiatives: no matter how respected the leader may be, if there’s a problem, managers should consider both the message and the messenger.

When you stop blaming employee resistance, you may discover an opportunity to improve the change initiative and the leader.

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HRBP Success Story: Answering the Call for Change Management

Tom Dalby, Director of Human Resources at Rogers Communications, recently faced a challenge. With his 19 years in HR as an HR Business Partner, Tom knows his function and relationships with his business partners inside and out. However, the climate outside of his function and business proved much less familiar. Rising customer demands warranted expanding the capacity of the call center business Tom supported. But, once that business decision surfaced, how would Rogers make the change without unforeseen costs and disengaging staff?   They needed to avoid these costs, while still delivering increased capacity and customer service.

The Business Challenge: Maintain a high level of call center customer service at all times, especially during those occasions of high call volume.

The Ideal Outcome: Introduce an extended work week strategy to provide the call center business with the capability to increase hours of work as needed.

 “We knew we needed to manage this change each step of the way,” Tom recalls. “The last thing we needed was for 5,000 staff to be at odds with the change – which was a very real possibility given often the change would involve more hours for staff to work!”

The Action Plan: Tom and the leaders of the call center business went to great lengths to focus on two priorities: employee receptivity to and understanding of the changes.

Looking back, Tom calls out three key components of their change management program that made the difference on delivering on the outcome – and more:

1. Communication – Tom made sure the team over-communicated the change: “We announced the program and its components months in advance for current employees; embedded this information within recruiting conversations to set expectations with prospective employees; and prepared managers for having conversations about and advocating for the change.” By focusing on proactive education about the change, the team ensured each individual staff member was comfortable and understood the plan.
2. Flexibility – Tom and his business partners recognized that big changes don’t come without a few growing pains. To make the change as easy as possible, they provided employees choice on when they could work the additional time and accommodated the vast majority of employee requests. The advanced notice and employee requests that followed allowed Tom and his team to identify the schedule’s areas of strength and greater need ahead of time.
3. Transparency – “We knew this would be a big change for many, so we focused on being as transparent as possible about the reality of the change.” Tom and his business partners led a pilot week for the new hours so that employees could experience the extended scheduled in real time. The benefit was twofold in increasing employee understanding of and subsequently commitment to the program and enabling the team to fine tune particular program components before the official launch.

The Result: Success! Immediately after the launch of their extended work week, call center staff delivered on – and even exceeded! – expectations. Despite an 8.5% increase in call volume, the call center business maintained service levels above target. Leadership appreciated this terrific outcome, too – Tom and his business partners were nominated for Rogers Communications’ Customer First Award for their outstanding impact on the business.

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4 Ways to Tackle Change Management

In a world where uncertainty and complexity is a constant reality, managing transformative change has become a new normal for a growing number of sales organizations. To make matters worse, companies aren’t experiencing just one change at a time – a survey from the Communications Executive Council tells us that companies have gone through an average of 3.5 substantial changes over the past 2 years. And that’s a lot, considering it takes employees an average of 24 months to recover from a single corporate change.

Whether it’s restructuring, senior leadership transitions or integrating a new sales force, employees are faced with changes that cause them to be constantly stressed out. Yet another data point to make you cringe: this change-fatigue-driven stress creates a 9-10% drag in employee performance.

And as we continue to consider our sales organizations’ ability to stay ahead of a complicated selling environment regardless of internal turmoil, this performance gap is a huge red flag when it comes to future growth.

But if your sales organization is about to stomach another transformative change, the outlook does not have to be so dismal. To get ahead of this downward spiral, we’ve seen progressive companies find successes in enabling the employee to be the “locus of control”.

Put another way, both known and unknown changes can cause less of a blow when we use tactical strategies to put our front-line staff in the driver’s seat.

While there’s no way around an ever-evolving sales organization, using an innovative approach to leadership can empower reps to collaborate with peers and act smarter and stronger when taking on a major corporate change.

Though it may seem vague or difficult to make reps the “Mobilizers” of internal change, enabling them to lean in to help drive the change isn’t an impossible dream.

If we think of transformative change as something more concrete – like rolling out a new CRM or building excitement for an upcoming training initiative – we can build our reps’ ability to adapt in the face of change using these four strategies:

1) Make Change an Emotional Journey: Because change adoption accelerates through various phases of commitment, use a Commercial Teaching Choreography to help your sales force shift from awareness of change to internalizing the change as an agile employee. The emotional journey encourages a high degree of self-discovery, which increases reps’ understanding and appreciation of the transformative change. Learn how ADP used a teaching choreography to appeal to emotional highs and lows before offering a new way forward.

2) Generate Demand to Build Momentum: Building bottom-up, viral “buzz” enables reps to generate organic acceptance for the change instead of mere leadership-driven compliance.  ADP sparks initial curiosity for new changes and uses socially connected reps to continue building interest to boost the internalization of change. Here, ADP knocks down barriers to communication by opening doors to sharing new ways of thinking and working.

3) Use Peers to Enable Self-Discovery: While managers are necessary change agents when it comes to communicating the strategic goals of a given change, a manager-led approach is insufficient in driving rep support for change. See how Saudi Aramco uses peer speakers (p. 21) to publicly share their personal connection to corporate challenges and provide tangible examples for other employees to re-create.

4) Highlight Success Stories of Early Adopters: W.W. Grainger found that reps will naturally cluster into one of the following time-based segments when deciding whether to embrace change:  Early adopters, Majority, Laggards and Naysayers. By gradually increasing the closeness of change-adoption through peer success, the Majority and Laggards will see their neighbors embrace change and realize immediate applicability for behavioral change.

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Why Cargill Is So Good at Performance Management

The firm’s new approach to performance management saw 70% of employees say they felt more valued

It’s not news that most performance management systems and processes are failing, sometimes spectacularly. And, as we covered recently, Microsoft is the latest in a line of big firms to experiment with a new approach.

In general, more and more HR teams have shifted their focus away from performance management systems and towards performance management behaviors.

Cargill’s Need for Change

Agricultural producer and distributor, Cargill, which has one of the world’s most respected management teams, took an approach it called “Everyday Performance Management” as its response to the problem.

Cargill’s senior HR and management team wanted to improve the performance management processes as part of the work on its corporate initiatives: the firm wanted to reinforce what was already a strong culture of valuing employees, it wanted to help employees respond better to rapid changes in the operating environment, and to reduce organizational complexity.

The HR team used employee engagement surveys, historical performance management surveys, and interviews with employees, managers, and leaders globally to understand the current state of performance management.

A Major Disparity

Unfortunately, the research results revealed a major disparity between what the performance management process measured and how it was used, and how employees accomplished their day-to-day work.

The team also learned that managers were reluctant to give candid feedback to employees, and viewed performance management as little more than an administrative drill.

Everyday Performance Management

Cargill founded the Everyday Performance Management process founded on a few core principles:

• Effective performance management is an ongoing process, not an annual meeting and a form to complete.
• Day-to-day activities and practices—not forms and scales—predict performance management quality.
• Employee-manager relationships are at the heart of effective performance management.
• Performance management systems need to be flexible to address different business needs.

In It for the Long Haul

Cargill’s leadership team also recognized that it would take several performance management cycles and a focus on continuous improvement to see the effect on individual and organizational performance.

This is an incredibly important part of the process. Our work over three decades shows again and again the importance of senior leader involvement and their willingness to sustain focus across the long-term to accomplish any major corporate change.

Cargill’s senior management and HR team ensure a sustained focus by:

• Regularly rewarding and recognizing managers who demonstrate good day-to-day performance management practices.
• Documenting the experiences and real-world tips of successful managers.
• Holding teams accountable for practicing day-to-day performance management.
• Building the skills and capabilities needed to succeed at Everyday Performance Management, including effective two-way communication, feedback delivery, and coaching.

Everyday Performance Management is Working

When surveyed about the Everyday Performance Management approach:

• 69% of Cargill employees reported receiving useful development feedback, and
• 70% indicated feeling valued due to ongoing performance discussions with their manager.

The team in charge of the initiative also received a lot of positive qualitative feedback from managers themselves, including:

• “The simplified process made things much easier so we could spend more time on the things that mattered.”
• “I am having more candid discussions during the year, focusing on accomplishments and future plans.”
• “This process has given me more time to spend talking with my people rather than do paperwork.”

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Pay for Performance: Make It More than a Catchphrase

"Pay for performance is a concept embraced by many but executed poorly by most," said Jim Kochansky, a senior vice president at Sibson Consulting, speaking at the 2011 WorldatWork Total Rewards Conference in San Diego.

The 2008-09 recession and sluggish economic growth in its aftermath have caused employers to rethink their approaches to pay. One result: a renewed emphasis on rewarding top performers even if overall pay raise budgets are smaller. According to Myrna Hellerman, senior vice president at Sibson Consulting, much can be learned from best-practice companies where base pay increases must be earned, based on demonstrated individual achievement. Pay raises "are not an entitlement; the entitlement era is over," she declared.

Other characteristics of the new pay mindset include:

• If there is no base pay increase budget, some high achievers might still get increases.
• If there is a base pay increase budget, some will get nothing while significant amounts will be given to the highest achievers.

Companies are thinking more creatively about incentive compensation. Instead of annual plans, payouts might be earned but delayed until a company returns to profitability, Kochansky noted.

In addition, companies are carving out a portion of their merit budgets to be set aside for high performers. "If you have a 3 percent budget for increases, employees are going to expect to receive a 3 percent raise," he pointed out. But if the company instead carves out 0.5 percent of the budget for high performers and communicates that the general budget for pay increases is 2.5 percent, then the expectation among average workers will be for a 2.5 percent raise. "Carve-outs should be done early in the budget process" so money is set aside and kept distinct, Kochansky recommended.

Welcome Low Performer Turnover

Along similar lines, Ken Abosch, compensation practice leader at Aon Hewitt, noted that high performers are attracted to companies that are committed to pay for performance, whereas low performers will self-select out of these organizations. He cited some of the main challenges of implementing effective pay for performance as:

• Insufficient funding.
• Faulty goal setting, with no clear definition of performance.
• Unrealistic employee reward expectations.
• Poor modeling by executives.
• The mindset that "everyone here is a high performer or they wouldn't be here."

It's human nature not to want to tell employees that their pay will reflect that their performance is below par, Abosch noted.

Another hurdle: managers' concerns about the turnover costs of replacing employees who leave because they were disappointed in their raise. "Studies have shown that below-average performers contributed less than 10 percent of the value of average performers to an organization," Abosch stated, "and above-average performers contribute almost twice the value of average performers to an organization. You can afford to replace below-average performers," and to do so repeatedly if the end result is to bring onboard additional high performers.

Marilu Malague, a senior compensation consultant at Aon Hewitt, advised using targeting budget increases as investments to drive average performers toward higher performance.

While much of the focus of pay for performance now is on variable pay (i.e., short-term incentive bonus payments and long-term incentive equity awards), base salary remains the largest reward component, Abosch said, and "employees value salary increases the most." While recognizing that cost of base salary increases compounds year after year—which dissuades some employers from offering merit raises—the value of pay raises as a motivator that drives behavior can't be dismissed, Abosch advised.

When variable pay is used to reward top performers, "the line of sight between performance and reward must be made clear," Malague added, or bonuses will fail to motivate high performance, or, worse, will be seen as a reward based on favoritism.

Equitable Treatment, Not Equal Treatment

'When an employee's extra efforts are not reflected in rewards and recognition, it erodes performance and commitment to the organization, said Tom McMullen, reward practice leader at Hay Group, a pay consultancy. At the same time, managers often confront a general notion of fairness among workers that goes back to childhood, which he summed up as "If he gets that, then I should get that, too."

But treating everyone "equally," despite their varying contributions to the organization, is not always fair. So managers can find themselves in a bind. "Don't confuse equitable treatment with equal treatment. A one-size-fits-all approach won't work," said Mark Royal, reward practice leader at Hay Group.

"There is a strong possibility for sour grapes if there is a lack of confidence in the process of allocating rewards. As rewards professionals, we impact perceptions of fairness," McMullen added.

Lack of consistency is often a driver for perceptions that the process in unfair. For instance, reward fairness is often delegated—or abdicated—to line managers to address. As an example: "Over 90 percent of organizations have no policies on making employees a counter-offer to keep them from jumping ship. They leave it to line managers," McMullen reported, based on Hay Group research.

Important criteria for impacting reward fairness include establishing a fair design for the compensation and performance assessment processes, making these transparent and communicating effectively how the system works. "Have senior leaders and line managers communicate the message," McMullen advised. "Don't just rely on HR. Ask for help from marketing and public relations in creating branded communications about rewards that can be distilled down to core messages showing that the organization rewards employees relative to their contributions." Consider using social media and short video presentations to get the message across.

"Few rewards programs explicitly address how fairness and equity are defined and managed, Royal said. "Most reward strategies/philosophies are not sufficiently robust and need to be made more explicit."

"The best reward program, if poorly implemented, will yield less than strong results," concluded McMullen. "If the reward program is not clearly explained, employee confidence in fairness and execution is likely to remain low."

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