3 Ways Companies Create Resistance to Change

3 Ways Companies Create Resistance to Change

Unintentionally change agents in the manager or free-agent role can create resistance. By being aware of brain science, the impact of wrong metrics and what drives decisions you can reduce resistance and use more effective change methods that fit complex communities.

Imagine you’re at the top of Whistler Mountain and you’ve never skied before. Someone you know but don’t necessarily respect or trust has told you downhill skiing is good for you and financial performance will improve once you’ve thrown yourself down 2,000+ vertical meters (5,000 feet). You might consider it if your working life would also improve. Suddenly your boss pushes you, or your boss’s boss and you’re flying down a double black diamond (expert double time) run. There’s no fireplace or martini in site. No hot tub or spa. You are literally airborne with no guarantee of survival. How would that work for you?

When companies decide to implement change, managers and all those impacted are told to ‘make it so’ in the words of Jean-Luc Picard for non-Star Trekkies. Managers can make decisions without considering the impact on anyone especially employees. Not all do, but they can. Their position of authority gives them permission. Picard’s directives worked because there was a high level of trust. But trust isn’t a given in most companies especially ones relying on authority based command and control management style.

A lot has been written on the logical part of change, which could easily summed up by ‘Don’t push!’ yet companies continue to do so. They also overlook the obvious (if it weren’t so ignored) reality.

Company performance is powered by people’s creativity and contribution.

Disengage that and you’ve set up resistance. What are companies overlooking that causes resistance and undermines trust?

1: Everything is Connected to Everything Else

When you’re being pushed to make a change, you’ll pass the pushing on. It’s a natural thing to do and it is a direct function of being immersed in an environment that favors pushing over taking initiative. Step back to observe what over arching dynamic is being created. Replacing the push approach with inviting employees to take the initiative. Give them control to design a positive experience.

Caveat: You can’t control what they do or you’ve just made the environment unsafe again but you can set parameters and constraints. See Step 2 and 3.

2: Companies are Really Communities of Connected, Caring People

Most change initiatives are treated like you’re fixing the engine of your car. But you’re not a mechanic. You are making decisions that have an impact on people’s lives. Responsible leadership and decision-making demands engaging those impacted in the design and implementation.

Engaging the organization in people friendly change means handing over the tasks of redesigning the systems used to get things done to those who are tasked with getting things done. Leaders must exist at every level or the capacity of the company will be limited to short term financial reports, which ignore the impact on social and ecological health. Business as usual is no longer an option.

Note: If in #1, permission has been given to take the initiative but nothing has happened you’ll know that the risk of doing so is greater than the perception of genuine care from management and others.

3: Human Beings Still Think Like Cavemen

From a brain science point of view you and I are still cavemen. The brain is quick to pick up on change and then decides if it’s important to survival or not. Friend or foe? Foe dominates over ‘friend’ until trust is established and so the gap widens between managers, change agents and those feeling powerless to influence what happens next. Unless the environment is saturated in high trust, the flight, fright, flee or freeze part of the brain kicks in and survival takes over. Decisions made out of fear are prone to failure because negative emotions impair thinking and slow intuition.

Biologically speaking your body functions in either growth or protection mode. Organizations operate pretty much the same way by definition.

The best antidote is to replace the fear of losing control with greater trust in creative talent. Shifting to a level of higher trust as a leader means being willing to grow – to develop the advanced skills that enable you to let go of control knowing you’re not going to lose it – but will gain some personal freedom, more sleep at night and better relationships.

The dynamic between growth and protection can be obscured by the state of emergency a company operates in so it is wise to engage your new hires as intentional overseers of what is going on because they aren’t immersed in the routine yet and can see more clearly what is working for or against desired change. You can also use an outside observer to provide essential feedback.

Unless you’ve paid attention to creating a workplace where trust, a strong sense of belonging and supportive relationships provide emotional safety, change initiatives will create resistance. The good news is that you can use change to recalibrate the workplace environment to higher levels of trust by how you choose to engage.

Moving Forward

The biggest mistake companies make is to act as if the mechanics measuring performance are more important than the people powering it. Implementing change in a complex adaptive community where for every action there is a reaction, asks for a growth mindset on the part of all and a willingness to rethink the metrics so that they measure what matters to the overall performance of the company and not just one interested party, most often shareholders.

The beauty of investing time to understand what makes change efforts effective is in the speed and scope of the change. Systems matter. And so do people.

Join me for a 30-minute program on Reducing Resistance to Change in Companies – Thursday, January 21st or Saturday, January 23, 2016 (so far).

Register here: http://app.webinarjam.net/register/5311/9ded3b86bf

Dawna provides peer-leadership support and advanced skill sets to internal change agents and new hires in the role of change agent (including managers, product or project owners). She also oversees organizational transformation so that the entire dynamic reveals the most effective leverage points to minimize risk of complacency.

Is embedding transparency into management thinking the key to the new economy?

Is embedding transparency into management thinking the key to the new economy?

 The Value of Transparency in Dealing with a Merger & Acquisition

The recent news that Anglo-Irish pharmaceutical company Shire has launched an unsolicited $30 Bn bid for US drugmaker, Baxalta, is just the latest in a global wave of hostile takeovers. Indeed, according to an article in the Financial Times by James Fontanella-Khan, we are in the midst of a US hostile takeover boom, with a 43% increase in year on year unsolicited takeover activity. Surprising when you consider that with most deals of this kind the shareholders lose out — some 70-90% of hostile takeovers fail, and most destroy value.

However, while the targets of an unwanted approach seem destined to take a hit whatever the outcome, there is some encouraging news. With the right approach it may be possible to stave off the advances of an unwelcome suitor and still emerge in reasonable shape. In today’s “creative economy”, where the organization is totally focused on delighting their customers and users, transparency may prove to be the key to better takeover decision-making, more ethical conduct, and the preservation of value.

Take some hostile takeovers that recently played out in the executive recruitment business. Executive recruiting is big business world-wide. The Association of Executive Search and Leadership Consultants reports a 10.7% annual rise in revenue and industry revenues of $11.7 billion world-wide so there’s a lot at stake. Global search firm CTPartners was known as a disruptive innovator in its sector. It had taken client transparency and accountability to levels previously unseen in the somewhat secretive world of senior level search – openly disclosing its performance statistics including the average number of days to fill a position and the percentage of candidates still employed 18 months later.

Whilst this transparent approach may have differentiated CTPartners, it wasn’t enough to save the company when it became the acquisition target of privately owned, DHR International. Top revenue generating employees departed, triggering a default clause and depleting the firm’s value. The last day for all former CTPartner employees was June 30, 2015 and the stock has since been delisted from the NYSE.

As was the case with CTPartners, all employees have the power to vote with their feet, leaving hostile takeover proponents facing the added complication that ownership does not guarantee retained value post purchase. It’s a reality reflecting the complexity of people and character of the respective business cultures in the acquisition. Expect collisions. While some would say it’s the ‘survival of the fittest’, in the creative economy the ‘fittest’ keep the talent.

People either impacted by the CTPartners takeover, or learning from it, had access to a site dedicated to assembling publicly available information on DHR. Here, transparency played a part in shining the spotlight on what was going on behind the scenes, including issues that were not being discussed in the mainstream media.

Immediately after the demise of CTPartners, DHR International targeted another publicly listed executive search firm, Caldwell Partners. Transparency played a different role in this instance – this time as a strategic tool to defend a company in a hostile takeover situation. Caldwell countered with a unified position, by being very frank about how their people felt about joining DHR.

In a people business valued talent walks in and out of the door each day. In the creative economy, trust is the glue that advances credibility and capacity to adapt through the engagement of top talent. Transparency attracts trust.

Caldwell issued a letter from their 37 Partners directly to DHR conveying their response directly: “Our partners have expressed to us their significant concern and have made it clear that they would not be willing to be part of a firm controlled by DHR.” Shortly after, Caldwell issued another press release this time including one from the Board of Directors leaving no doubt about the strength of Caldwell’s position. To quote Caldwell Partners, “The bottom line is, we love our firm, we love our leadership, and we love our incentives and do not want to see any changes in either ownership or structure that will take away what we see as a very bright future that does not include any involvement with DHR.”

Following receipt of both public letters, on July 30, 2015 DHR officially disengaged.

Caldwell’s approach shows it is capable of navigating the choppy waters between the traditional and the creative economy. Their unified position, backed up by clarity of their values, left no opening to lever a weakness. To stay strong, a company must be able to make values-based decisions in partnership with their shareholders, Board and Partners as well as all key stakeholders and to operate at all times in a way that is authentic and transparent.

In a hostile bid situation, where aligning the cultures and values of both organizations is key, transparency enables top talent to decide whether or not it’s a match made in heaven. The old days of assuming you can buy a company’s talent intact and expect to expand through acquisition are over.

In today’s creative economy the value of customer service, truth and transparency, employee engagement and outstanding customer relationships come first. Decision makers are becoming more discerning, knowing that value is influenced by the company they keep and by customer loyalty. Creating value, only to sell and see it destroyed shortly after, has worn out as an exit strategy. Bart Houlahan, co-founder of B-Corporation, was inspired to start B-Corporations (B=Benefit) to counter that experience after selling his company AND 1. If a company wants to retain the exceptionally creative millennial generation, transparency and ethical integrity is a requirement.

Top talent is discerning about the type of companies they will work for knowing that personal reputation, well-being and happiness is entangled with corporate actions. The degree of transparency a company lives by is one indicator of their values. Will it be the deciding factor behind which companies successfully transit from the old to the creative economy and which ones fail?

Originally published in the Huffington Post August 10,2015

Dawna Jones offers a sounding board – mentoring service for executives and change agents seeking insights and ways to better navigate difficult dynamics, particularly collisions between traditional thinking and what’s needed to adapt. Think of it as cultural oversight. Logically, risk exposure is reduced by engaging creativity and deeper intelligences.

Workshops focus on the advanced decision-making skills and elevated awareness required for seeing through complexity to expand flexibility and perception. Contact Me to discuss the value of following through on merger and acquisition promises.

Does Survival of the Fittest Apply to the Creative Economy?

Does Survival of the Fittest Apply to the Creative Economy?

Amongst the many macro forces shaping the context for decision-making and business innovation in a new economy are a few old beliefs. ‘Survival of the fittest’ is one of them. It’s a term you’ll likely hear at the conclusion of a hostile takeover or mergers and acquisitions when the thrill of the hunt is complete. Yet oddly, ‘survival of the fittest’ used in the business context doesn’t have much to do with what Herbert Spencer in 1864 meant when he coined the term to explain Charles Darwin’s principle of natural selection – ‘fitness’ referred to reproductive success. Business latched onto the deal-making drama associated with predator-prey that goes with perpetually fighting to survive. The predator-prey image has metaphorical appeal to business rationale for destroying competitors, one way or another, to reduce players on the field or, optimistically, hoping to strengthen their own capabilities. The lust for the deal may well explain why the US is seeing a 43% increase in hostile takeover deals over the previous year according to Thomson Reuters data.

Neither deliberate destruction nor buying your competitors brings much control to growth. In today’s creative economy, when a competitor buys out another in order to reduce the competition, if they can’t also attract and keep top talent, they’ve won the battle only to lose the war.

Rationalizing the destructive elimination of a competitor and negative social impacts on employees, clients and customers using ‘survival of the fittest’ points to a company doomed to fail. Force and manipulation might work with products and services but when you are in the people business, where people sell products and services to clients and customers with very different values, relationships have equity. The value embedded in the relationship drives the capacity to adapt to emerging conditions. It’s a completely different game.

Today’s creative economy is founded on values and a higher standard of ethics for creating a better world – one that has humanity as part of the equation. Self-interest as the sole motivation is not enough, consequently tolerance for force and manipulation is waning. Not enough people benefit. Instead, the value for customer service, for truth and transparency, for employee engagement and customer relationships outplays short-term tactical manoeuvres to destroy companies. Employees bought in hostile acquisitions know they can walk away. If the workplaces are soul-sucking employees know they have options. When companies state they value providing high quality service to the client, but can’t deliver on it, transparency and congruency become critical to the company reputation. Increasingly, customers will decide with their dollar. And what about shareholders?

Steve Denning points out,

“The fact that we have the highest level of M&A deals since (a) the peak of the dot-com bubble in 1999 and (b) the peak of the housing bubble in in 2007, should give us a clue as to what comes next. Studies show that most of these deals end up destroying long-term shareholder value.” He adds, “This M&A activity is just one of the negative consequences of having an over-sized financial sector and an endless supply of free money from the Fed.”

If that weren’t enough evidence, the failure rate for mergers and acquisitions runs somewhere between 70-90% according to HBR.

Losing good companies to intentional destruction or failed mergers and acquisitions depletes the chance for a country’s economy to gain from the contribution of knowledge workers and to adapt to unpredictable change. Anyone adhering to the mantra “only the fittest survive” clearly hasn’t noticed the rules are changing. And in case it’s not obvious, a company that is operating by out-dated beliefs cannot make growth-oriented decisions.

Are the old tactics still at work? Yes, unfortunately which means there is a lag in know-how and in capacity to perceive the wider landscape and see what’s ahead. As long as the bi-focals are fixed on share price, the opportunity to strengthen resiliency is lost.

Today, “survival of the fittest’ is better defined as those companies best adapted to the conditions of the creative economy. Adapting to emerging conditions requires an entirely different worldview, bolder yet kinder decisions, ethical standards, and genuine employee engagement not possible from a company with both feet rooted firmly in the past.

Perhaps the real driver behind the glut of takeover attempts reflects the thrill of the deal (being in ‘flow’) and all of its physiological rewards. If so, perhaps taking up an extreme sport would pose less harm to the economy and limit negative social impacts. Until those one level above the deal-makers review hostile takeovers for efficacy, enabling more rational decisions, you have options:

• As an employee it means you have a choice. Do you stick with a soul-sucking workplace? Or chose a company more in tune with values of care for the customer, the wider social and environmental issues with higher benefit to the shareholder?

• As an executive it means you look in the mirror to reflect on what’s important to you, your reputation and your legacy?

• As a shareholder it means you ask yourself how many families suffered in order for you to gain? Can you gain a profit from a more ethical source?

• As a customer it means you ask yourself which companies you are willing to help succeed through your purchases.

None of these questions are easy and reflect the fact that to evolve and thrive requires decisions based on care for the customer relationships and for people as a core value. It is the ultimate crucible for higher levels of leadership in business in order to restore trust in the creative economy where the only the most agile and employee-customer focused will thrive.

This was originally published in the Huffington Post, July 10, 2015.

Dawna Jones loves to provoke the evolution and transformation of company cultures to become more ‘fit’, agile and innovative. She presents insights into a different way of seeing and thinking about the everyday challenge of creating cultures and workplaces so employees can truly engage their creative talent. She’s the author of Decision Making for Dummies (on Steve Denning’s Forbes list of 8 noteworthy books for 2014), transformational change mentor-coach, a speaker-workshop leader and a tad nomadic.

Contact me if your company is grappling with the intersection between ‘the way things used to be’ and the desire to be and do things differently.

If Great Workplace Cultures Outperform the Pack Why Aren’t More Companies Switching?

It’s no secret that when employees can take their whole selves to work, performance exceeds far beyond companies relying on the ‘tell-sell’ and if that doesn’t work, then ‘yell’ approach. Rationally it makes sense, but decision-making isn’t always rational. Employees show up for work with enthusiasm, passion, a sense of purpose and a desire to contribute to a purpose that matters. Until someone tells you you’ve screwed up and never to do so again.

Sadly, the majority of companies remain addicted to quarterly reports like crack addicts unable to see an accelerating world with crisis signs on every corner. Traditional management style, casually known as ‘command and control’, basically says, “Park your passion and energy at the door. We’re busy doing what we’ve always done.”

Disturbing disengagement statistics tell the tale. With 70 percent of employees disengaged, there is plenty of potential being ignored. Transformation of workplaces to restore care is essential. Not the incremental type. It’s way too late for that. I’m talking about radical transformation so that a company regains confidence in its ability to run a marathon while staying flexible. Keeping pace with customer values, needs and expectations while also reclaiming the edge, and swapping out old beliefs is a tall order, which is probably why people prefer to try and control the uncertainties.

Yet if a company knew they were on the brink of failure, the mindset and decision making shift would happen out of necessity. Toyota’s stellar reinvention in the 1940’s and switch to cybernetic principles is a well-known example. The question remains. Why are companies hanging on so persistently to the past? Is the problem complacency or a belief that it’s all under control? Is courage absent? Is it a matter of fixed narrow thinking? Or missing know-how?

I’ve puzzled about the untenable disengagement statistics and have been equally puzzled by the assumption that incentives will fix the problem. It has also occurred to me that management confuses busy, over-tasked employees with engagement. Perhaps it’s time to better understand the role of ‘power of the human spirit.’ After all, when you have a sense of belonging, know you are making an important contribution and feel valued, you’ll contribute full throttle. This isn’t religious belief. It’s been proven in the performance of great workplaces where employees accomplish a challenging goal faster than expected.

Take the case of Novo Nordisk, a Danish global pharmaceutical firm with offices in 75 countries and employing over 41,000 employees. In 2004 they decided to reduce their carbon footprint. Novo Nordisk asked, “How can we save energy and increase profits while investing in renewable energy (offshore wind power)?” and challenged employees to find energy savings to compensate for the expense.

The goal? Cut CO2 emissions by an absolute 10% from global production sites within ten years. Employees loved the challenge and quickly found the savings, achieving the goal in five years. They were empowered to make a difference and the company was able to work smarter without compromising requirements or spending more money.
Novo Nordisk’s sees itself as part of a living system – life itself. Author and investment advisor Joseph Bragdon points out Novo Nordisk’s concern with bio-ethics connects its human health products to the biological health of the planet. Further, “its goal of ‘positive net impact’ seeks to return more value to the earth than it takes in, creating value for its customers.” It’s a management philosophy that includes a major win for shareholders.

“From the turn of the century to year end 2014, Novo Nordisk’s shareholders saw their share value grow more than twelve times. In contrast the share prices of Merck, Pfizer and Lilly (a primary competitor in the global insulin market) all lost money.” (Joseph Bragdon)

In Novo Nordisk, decisions are anchored by values of ecological health, systemic health and financial well-being. Rather than profit being their purpose for existing, an inspiring purpose drives their profit. Everyone gains.
The ideas underpinning the management of Novo Nordisk, and other companies that see themselves as part of a wider living system aren’t new. Just better, more robust and healthier by benefiting the planet, people and prosperity.
The problem is that companies relying on a traditional style of management are ignoring their true performance potential.
What are the signs that a company is clinging to the past?

1. A need to control creativity. One indicator is the collision between a more agile creative approach where co-creating with the customer collides with risk aversion and cost cutting mentality. This doesn’t bode well because creativity is a chaotic process that can’t be controlled.
2. Decisions are based on politics, placing career advancement ahead of the company’s success. It has worked for many a CEO whose pay is tied to shareholder returns. It’s a cyclical trap that leads to death by leaking talent and money, driven by the restrictive notion that the company exists solely to generate a return to shareholder.
3. Management is still telling employees what to do. The paradox is that companies say they want talent, yet insist on telling them how to perform. Give them a compelling enough purpose or goal and then step aside.
4. Single loop learning runs unquestioned. In other words, decisions repeat themselves based on past beliefs and assumptions about how the world works. Companies fall into the rut of recycling the past, so work hard to get nowhere. Constantly questioning assumptions allows you to iteratively adjust.

The level of leadership required to transform traditional management habits and reach deep into the workplace culture demands courage and a high level of self-mastery, or at least the desire to be all you can be as a leader. To identify and rapidly respond to undetected disruptions, companies need all of their intellect, collective intuition and enthusiastic horsepower – without relying on the crutches of authority. Transformational, fully responsible leaders are in short supply.

Can the true leaders residing at every level in companies please step forward? We need you.

Originally posted on the Huffington Post – Great Workplaces June 8, 2015

Contact me to make the changes required to be a part of the emerging new role for business.