Making Change Work

Published in the Southern African Journal of Marketing Research

Issue 6, 4^th Quarter 2009

Eriaan Oelofse, Ph.D.  Principal Consultant, ChangeWright Consulting

www.changewright.com

INTRODUCTION

Elizabeth Newton (1990) studied a simple game that many of us used to play as children, in which she assigned participants to one of two roles, namely tappers or listeners. Tappers received a list of twenty-five simple, well-known songs (such as “Happy birthday to you”) and were asked to pick a song on the list and tap out the rhythm to a listener. The listener’s job was to guess the song based on the rhythm being tapped. During the course of the experiment, 120 songs were tapped out. Listeners could only correctly identify 2.5 percent of the songs (3 out of 120). What is worth mentioning is that tappers predicted a success rate of 50 percent (one time in two) when asked by Newton at the start of the experiment to predict the odds that listeners would guess correctly during the game. However, tappers only got their message across one time in forty (2.5%). Newton concluded that the tappers had been blessed with the ‘curse of knowledge’ – once we know something, it is hard to imagine what it was like not to know it. When tappers tap, they are hearing the songs in their heads, while listeners can only hear a bunch of disconnected taps (Heath & Heath, 2008).

This story rings true for many researchers and inevitably, their clients. The research process is often initiated by executive and/or senior leadership, after which the researchers and client sponsors spend a significant amount of time discussing, debating, arguing, planning and analysing the methodology and data, thereby creating the tune in their heads. When the results of the study are eventually presented to the broader client management team, it is not uncommon for the results or the methodology utilised during the study to be either challenged or outright rejected, or on the other hand, accepted with indifference and filed away – never to be touched again.

From a change management perspective, these diverse reactions can be explained by the phases a person typically encounters when confronted with new information that will initiate change. These phases (denial, resistance, exploration, and commitment) are based on a derivative of Elizabeth Kübler-Ross’s (1989) five stages of grief (denial, anger, bargaining, depression, and acceptance), as applied in an organisational change context. As people approach any change (big or small), their first response might be to see it as a threat. When this happens, they fear and resist the change. If their reactions are managed correctly, it is not unusual for those affected to begin to see that the change may lead to new opportunities. Perceived threats lead to denial and resistance, while perceived opportunities lead to exploration and commitment. Most people go through these four phases in every transition – while some move quickly through the different phases, others may get bogged down before they reach commitment. The four phases are discussed briefly below:

Denial

Depending on the nature of the research results and the client’s awareness, this reaction may range anywhere from a barely noticeable drawback to an intense outpouring of emotion. This is followed by disbelief or denial, with the classic “maybe if I don’t think or do anything about it – it will go away” response. If this phase is not managed, clients simply disengage from the process, withholding their support and participation to such an extent that the proposed change becomes very difficult to implement.

Resistance

During this phase clients often feel threatened, frustrated and angry. As a result, meetings can be derailed by long and drawn out discussions, continuous arguments, excessive fault finding, criticism and requests for more information. Clients may also point out that similar activities have been tried before and did not work. If this phase is not managed, the project will show poor progress due to people’s interference with planned activities by, for example, not releasing employees to attend scheduled information sessions, training, etcetera.

Exploration

Although there is an assumption that this phase is “better” than the previous two phases, there is a lot of uncertainty during this phase and is often described as “chaotic” by many of those who experience it. Stress levels are very high during this phase and people may feel frustrated about a perceived lack of direction. As a result there are lots of requests for assistance and guidance. Many questions are asked, and creative ideas surface (sometimes these ideas are really good and of potential value). Project resources should be prepared to meet the increased demand for detailed information during this phase and plan enablement sessions to allow for joint action planning and provide a good mechanism for providing some of the required detail information.

Commitment

The best way to describe this phase is when the “To Be” becomes the new “As-Is”, and people settle into a new routine. There is an ongoing requirement for capacity development and more advanced training as people feel more assured and capable. This is also the phase when the first “success stories” emerge. New roles and new teams should be supported (through development plans, team building, etc.) and adoption and embedding activities initiated to ensure sustainability and entrench the new “As Is” in the organisation’s fabric.

In the absence of effective change management, it is not uncommon to hear the following questions:

• Why did the client ignore the research results after the feedback session without implementing any of the valuable suggestions in the research report?
• Why didn’t the client realise the value and impact of the results contained in the research report?
• Some actions were initiated half-heartedly after the feedback session, but slowly fizzled away after a few weeks. Why didn’t the client take ownership of the results and the proposed solutions?
• Why do clients sometimes say that they were not aware of the results – or implications of the research – when they attended a detailed feedback session?

Unfortunately, the management of change is one of the least appreciated concerns of researchers – the focus is on completing the research, analysing the data, writing the report and presenting the results. Nonetheless, depending on the nature of the research, much more can be achieved if researchers incorporate certain change management principles – either by effectively planning the feedback meeting to manage reactions of key stakeholders, or by sensitising clients to consider the emotional impact of the potential changes brought about by the research results on stakeholders and suggesting change management methodologies to use when results are communicated and implemented that will maximise the impact and value of the research results .

CHANGE MANAGEMENT

Holman, Devane, and Cady (2007) claimed that organisational change initiatives are possible through high involvement of and a systemic approach to improvement. High involvement is achieved by engaging as many as possible people in changing and designing their own system, while a systemic approach implies that all people, functions, and ideas that have an affect on, or can be affected by the change, are included in the process.

Researchers might argue that they adhere to these change management principles, since there is, in most client interactions, one-on-one communication, group involvement, presentation of results at so-called “town-hall meetings”, broadcasts of results on internal channels, etcetera.  However, it is not good enough to merely get a group of people together in a room to listen to presentations – sustained change is only possible when “people collectively explore each other’s assumptions, seek and expand common ground, shape a desired future, and jointly take ownership of the solutions to the issues at hand” (Holman, Devane & Cady, p. 2).

Large system/ Large scale change methodologies

Large system or large scale change methodologies have experienced increasing popularity over the past 15 years as effective change tools, largely because of their ability to accelerate action, increase a shared understanding and dissemination of information through the organisation, promote a seeing-is-believing effect, increase sustainable results and enhance management effectiveness. There are numerous methodologies that are categorised as large system change methodologies, such as Appreciative inquiry, Open space technology, Whole-scale change, Real-time strategic change and Future search, among others.

All of these methodologies can be used very effectively to disseminate information and collectively plan and implement proposed changes through the organisation, however only  the World Café conversational process, will be discussed in more detail here. Café conversations are flexible and can be easily adapted to different organisational settings and circumstances. These conversations create opportunities to discover mutual insight, innovation, and action that are already present in the group and offer an exceptional mixture of focus and of consistency without rigid control (Brown & Isaacs, 1996, 2001; Brown, Homer, & Isaacs, 2007; Brown, Isaacs, & Margulies, 1997, 1999; Brown, Isaacs, Margulies, & Warhaftig, 1999).

The World Café

The World Café provides opportunities for creating meaningful conversations or dialogue around questions that matter. Although it appears to be a relatively simplistic practice, it is built on the principles of dynamic networks and living systems and provides a unique opportunity to access a system’s creativity and shared knowledge that might not be available through more traditional approaches. Brown and Isaacs (2001, p. 3) explained that the World Café conversational process is based on the following working assumptions:

•              The future is created in webs of human conversation.

•              Compelling questions encourage collective learning.

•              Networks are the underlying pattern of living systems.

•              Human systems – organisations, families, communities – are living systems.

•              Intelligence emerges as the system connects to itself.

•              We collectively have all the wisdom and resources we need.

As such, the World Café provides a safe space where participants can contribute to the process of knowledge-sharing through dialogue, engage with each other in a living system of personal relationships, and act decisively in pursuit of common aims (Brown et.al., 2007).

How does it work?

World Café conversations have been used successfully with groups as small as 12 people and as large as 1200 people from around the world (Brown & Isaacs, 2001). During these events, participants are encouraged to contribute in small groups by speaking and listening, without being concerned about solving the issue or saying the right thing. The purpose is to share ideas, while learning from others in the process of discovering innovative ideas and generating new possibilities. It is not about reaching conclusions.

During a World Café conversation up to eight people sit around a table or in a conversation cluster to explore questions or issues related to their work. Since the World Café conversational process is aimed at exploring new possibilities for inquiry and action, well-phrased and focussed questions are used to define intention, focus energy, and direct attention. Appreciative questions that evoke a sense of future possibility are also used to create more energy and engagement, as opposed to those that focus on what is wrong in the present.

Other participants at nearby tables or conversation clusters explore similar questions at the same time. Participants are requested to write down key ideas and insights of the dialogue. After a first round of conversation (20 to 30 minutes), participants are invited to change tables, carrying ideas and insights from the first conversation into a newly-formed small group.  This intentional cross-pollination of ideas is a defining feature of the World Café, as participants move from table to table in several rounds of dialogue.  As participants move from one table to the next, patterns appear and additional perspectives and insights surface in combinations not previously imagined. The process also benefits from the diversity in the group, as participants bring their varying ideas, worldviews, values, and ways of life into the invisible conversation patterns. A table host remains behind at each table to share the key ideas and insights that surfaced from the previous dialogue, with new arrivals.

This process is usually repeated for three rounds and followed by a feedback session to which all participants contribute. These are usually not formal report-outs (depending on the purpose of the session) but rather provide the group with an opportunity to notice the underlying themes and discoveries that have presented themselves during the process. Participants are usually given some time to identify a key insight from all the conversations they have been involved in. These are shared with everyone in the room, weaving new threads of thought in a rich tapestry of insight and collective knowledge – often leading to outcomes that no one could have foreseen when the conversation commenced (Brown and Isaacs, 2001; Brown et al., 2007; and Schieffer, Isaacs & Gyllenpalm, 2004a, 2004b).

PRACTICAL IMPLICATIONS

The World Café methodology can be used effectively during initial feedback sessions to manage the anticipated emotional response to change brought about by the research results and to create opportunities for stakeholders to internalise the implications of the research results through well-phrased questions. It follows that the questions asked should support the purpose or context of the research; however some more generic questions that can be asked during initial feedback sessions after the results have been presented, are:

• How do you feel about the research process followed?
• What three aspects stood out for you in the presentation?
• How can these results be used to achieve exceptional results?
• What will the implications be if we don’t do anything about the results presented?

This methodology can also be used creatively to disseminate information to the rest of the organisation.

CONCLUSION

The changing nature of the world of work in the 21st century global environment has resulted in a complete review of the type of organisational practices required to be successful in this ever-changing milieu. The so-called “new economy organisations” must be agile to meet the demands of the changing global environment and this can only be achieved if and when stakeholders at all levels of the organisation are involved during the planning of initiatives. Cady (2007) emphasised that those who envision the future are the ones who end up making it happen – in other words, people tend to support and defend that which they help to create.

Conversational methodologies like the World Café can be used with great success as a value added service during the research process. The analyses of the qualitative interview data with participants at a number of World Café interventions reiterated that it encouraged interaction between participants, which not only resulted in feelings of interconnectedness, but also generated a lot of energy that stimulated the creation of new and innovative ideas. As the intervention unfolded, participants also sensed that their contributions were not only heard, but also taken seriously. This encouraged participants to actively participate in the process and contribute to a wealth of new and innovative solutions. Additionally, the meaningful conversations or dialogue regarding various aspects of the specific process under discussion, created opportunities for alignment and resulted in participants understanding the strategic need for implementing and supporting the specific process.

Although the rhetoric of employee involvement in the planning and execution of initiatives resonates through the corridors of many South African organisations, the experience is that leaders often impose top-down initiatives, without involving employees in the process. Within this context, it makes sense for researchers to not only sensitise clients to the impact of unmanaged change, but to also consider and propose the implementation of change management activities that will allow more stakeholders to be involved during roll-out of research results and the consequent planning process to implement actions to address the results when writing research reports. It is important to note that although change management has the potential for adding great value if done well, it can cause great damage if done poorly. The World Café methodology is only one of a number of methods to consider as part of a more comprehensive and complex change management process that has not been addressed in this article.

 For more information on change management visit the ChangeWright website at www.changewright.com or contact Eriaan Oelofse at the following email: eriaan.oelofse@changewright.com.

REFERENCES

Brown, J., Homer, K., & Isaacs, D. (2007). The World Café. In P. Holman, T. Devane, & S. Cady (Eds.). (2007). The change handbook (pp. 179-194) (2^nd ed.). San Francisco: Berrett-Koehler Publishers.

Brown, J. & Isaacs, D. (1996). Conversation as a core business process. The Systems Thinker, 7, 1-5. Retrieved 7 October 2007 from the World Wide Web: http://www.theworldcafe.com/articles/CCCBP.pdf.

Brown, J. & Isaacs, D. (2001). The World Café: Living knowledge through conversations that matter. The Systems Thinker, 12, 1-5. Retrieved 7 October 2007 from the World Wide Web: http://www.theworldcafe.com/articles/STcoverStory.pdf.

Brown, J., Isaacs, D. & Margulies. (1997). The World Café: Creating the future, once conversation at a time. Retrieved 7 October 2007 from the World Wide Web: http://www.theworldcafe.com/articles/TWC.pdf.

Brown, J., Isaacs, D. & Margulies, N. (1999). Asking big questions: A catalyst for strategy evolution. In P. Senge, C. Robberts, R. Ross, B. Smith, G. Roth, & A. Kleiner (Eds.), The dance of change: The challenges of sustaining momentum in learning organizations. New York, N.Y.: Doubleday.

Brown, J., Isaacs, D., Margulies, N., & Warhaftig, G. (1999, September).The World Café: Catalyzing large-scale collective learning. Leverage, 33, 1-2. Retrieved 7 October 2007 from the World Wide Web: http://www.theworldcafe.com/articles/catalyzinglearning.pdf

Cady, S.H. (2007, July 26 – July 27). Change Mastery: Engaging whole systems in organisations and communities. Presented at an international training event, hosted by Changeability, Johannesburg, South Africa.

Heath, C. & Heath, D. (2008).  Made to stick. London: Random House Books.

Holman, P., Devane, T., & Cady, S. (Eds.). (2007). The change handbook (2nd ed.). San Francisco: Berrett-Koehler Publishers.

 Kubler-Ross, E. (1989). On Death and Dying. London: Tavistock/Routledge. (Original work published 1969).

Newton, E. (1990). Overconfidence in the communication of intent: Heard and unheard melodies. Unpublished Ph.D dissertation, Stanford University.

Schieffer, A., Isaacs, D., & Gyllenpalm, B. (2004, July 14 a). The World Café: Part One. Transformation, 18, 1-7. Retrieved 6 November 2007 from the World Wide Web: http://www.collectivewisdominitiative.org/papers/WorldCafe.pdf.

Schieffer, A., Isaacs, D., & Gyllenpalm, B. (2004b, July 21 b). The World Café: Part Two. Transformation, 18, 1-9. Retrieved 6 November 2007 from the World Wide Web: http://www.collectivewisdominitiative.org/ papers/WorldCafe.pdf.

Marilise Smit, MD of ChangeWright Consulting (Pty) Ltd and ChangeAbility Training (Pty) Ltd

Introduction

M&A transactions are often pursued in order to acquire a larger share of an existing market, enter new markets, eliminate competitors, acquire expertise or assets, transfer skills, save costs, increase efficiencies or capitalise on synergies. It has, however, been found that between 55 % and 70 % of M&As fail to meet their anticipated purpose (Carleton cited in Schraeder and Self, 2003) or they take longer to do so than expected. In fact, recent studies have found that significant percentages of M&As destroy profitability and shareholder value (Sunday Times Business Times, 6 June 2004, 16).

M&As are complicated transactions involving many risks for all contracting parties often bringing about fairly rapid large-scale change with far-reaching impact. Merchant bankers, auditors, lawyers and tax consultants are retained at great costs to manage certain risks through the negotiation, due diligence, contract drafting and implementation phases of the transaction. During the due diligence phase detailed information is obtained about the parties, and the risks involved in concluding the transaction are evaluated. Traditionally lawyers and auditors are appointed to conduct the legal and financial due diligence investigation. Both these types of due diligences might touch on the people aspects relevant to the transaction but rarely do they include a culture or climate assessment that evaluates the cultural fit between the organisations involved in the transaction before conclusion of the transaction.  

There is, however, a growing realisation that the successful outcome of M&A transactions is dependent on wide-scale integration of people and cultures including their processes, systems and practices and that cultural compatibility issues can no longer be ignored. If the people side of M&As and the integration of different cultures are ignored, the merging companies could face many difficulties, including, ultimately not meeting the anticipated purpose of the transaction. A survey of managers and companies involved in more than 1 000 M&As conducted by Best Practices, a US–based consultancy, found that staff productivity dropped by 50% and 47% of people in leadership positions moved on (Sunday Times Business Times, 6 June 2004, 16).   

Some of the other difficulties include:

• Loss of skilled employees other than employees in leadership positions. This type of loss inevitably involves loss of business know-how that may be difficult to replace or can only be replaced at great cost.
• Retrenchment of employees causing panic and a loss in motivation, which could in turn also lead to a loss of productivity and a reduction in revenues.
• Improper or incomplete alignment of employment terms, conditions and benefits leading to anger, resentment and a drop in motivation.
• Rushed or improper population of new organisational structures.
• Increase in costs could result if the proper management of change and the implementation of the M&A transaction are delayed.
• Unhappy customers and the eventual loss of customers.
• Build up of resistance to any future change initiatives. 

Managing change in the highly complex world of M&As is not easy and research has found that so much as 70% of change initiatives are unsuccessful. The fact that the M&A process can sometimes takes as long as 3 to 5 years to be fully effected, adds to the levels of uncertainty, ambiguity or confusion that accompanies such transactions.  

Organisational culture

One of the components of complexity of M&As is organisational culture. Before an M&A transaction is concluded it is important to assess the cultural compatibility of the merging firms. In this regard it is recognised that such formal cultural assessment is usually not possible because the negotiations leading up to the merger have to be kept secret. This creates the risk, however, that the merging parties do not discover important differences until after they have committed themselves to the new organisation (Schein p.178). 

It should also be remembered that the usefulness of a formal cultural assessment is limited as assessments done on the merging companies would not indicate whether they are even “using the same meanings for seemingly shared concepts”. (Schein, p. 180) 

To acquire true cultural insight, requires both parties to take part in each other’s cultures. This can be done by sending employees into the other organisation for some time or by creating “dialogues between members of the two cultures that allow differing assumptions to surface.  Dialogue is a form of conversation that allows the participants to relax sufficiently to begin examining the assumptions that lie behind their thought processes.” (p. 181) Participants should feel “secure enough to suspend their need to win arguments, clarify everything they say, and challenge each other every time they disagree.” (p. 181) Reflective rather than confrontational conversation should be encouraged. The process of creating dialogue can help focus on engaging people and making issues discussable and in this way reducing uncertainty and anxiety and the likelihood for employee resistance to the change. 

Critical to the success of a cultural change process is a well-designed plan for the management of such change. It has been found that companies with strong integration plans created above-average value in their industries and effective post-merger management policies were seen to improve the odds of success by as much as 50 percent (Research was done by Mercer Management Consulting cited in Tetenbaum, 1999: 3).  

Just as critical as planning for the management of cultural change is the need for effective communication, in every phase of the merger process. Employee resistance to change can be a huge barrier to the successful implementation of a merger or acquisition. Resistance is, however, a natural part of the change process as change involves going from the known to unknown. Individuals typically go through four phases during a major organisational change: initial denial, resistance, gradual exploration and eventual commitment.  

Keeping communication channels open will prevent anxiety from getting out of hand and providing clarity about expectations will reduce distrust or conflict. Kets de Vries (1995: 46) says frequent reviews should be conducted during the transition process, during which people can talk about the reasons for the merger and open the dialogue around future changes, and during which management can attend to the psychological dimensions of the change process.  

Related to the issue of communication is the identification of all stakeholders who may be affected by the change. The business case for change, the process of change and timeline must be communicated to all stakeholders so that they may gain an adequate understanding thereof. Those stakeholders who will be impacted significantly by the change must have a clear understanding of how and when they will be impacted. 

Clear and regular communication, including the process of creating dialogues, should address stakeholder resistance and lead to stakeholder buy-in. Communication channels must allow for effective feedback from stakeholders to ensure that barriers to and opportunities relating to the change objectives can be identified on an ongoing basis and be addressed. 

Without collaboration, the process of culture integration may be significantly hampered. In the initial phase of a merger, teaming up to create cross-company task forces and project teams and articulating the new rules of the game will help problem solving and ensure future collaboration (Kets de Vries, 1995: 47). The role of the integration team leader is also considered vital to the success of the implementation phase of culture integration and integration management should be recognised as a distinct business function rather than an “add-on” job for integration team leaders (Tetenbaum, 1999: 6). 

In addition, commitment and patience are essential. Just as a marriage “demands a lot of attention and commitment of resources” so does the merger of two often divergent cultures. Kets de Vries says mergers are intense relationships that often lead to high turnover as people are “psychologically unprepared for the aftermath of a merger or acquisition” (Kets de Vries, 1995: 42).  

M&As and the resultant changes to the organisational culture often require a collective change of mind. But, minds cannot be managed, they can only be inspired (Laurent, cited in Evans, Doz, Laurent, 1989:87) For this to occur, the right style of leadership is essential. Leaders must communicate the vision of the change and its impact as widely and effectively as possible. Thereafter they have an important role to play in guiding the ongoing change effort and in encouraging employees to stick to the change process until it is an integral part of everybody’s lives.  

The integration team leader/s should be involved in any discussion around a potential merger from the outset of the process so that they can provide valuable input into any ‘Go-No-Go Decisions’ taken. The earlier such people are able to participate in the process, the more effective they will be in working through any issues that could negatively impact on future business outcomes, if ignored (Tetenbaum, 1999: 7).  

Concluding remarks

It is clear that the success of a merger between two or more companies depends as much on culture fit as it does on strategic and financial fit and the proper management of change and employee response thereto.   

References

1.   Kets de Vries, M.F.R. 1995. Life and Death in the Executive Fast Lane. San Francisco, USA:  Jossey-Bass Inc, Publishers.

2.   Laurent, A. 1989. “A Cultural View of Change”. In Evans, P., Doz, Y. & Laurent, A. (eds.), Human Resource Management in International Firms: Change Globalisation, Innovation. London: McMillan.

3.   Schein, E.H. 1990. Organizational Culture and Leadership. San Francisco: Jossey-Bass.

4.   Schraeder, M. & Self, D. R. 2003. “Enhancing the success of mergers and acquisitions: an organizational culture perspective”. Management Decision, vol. 41, no. 5, 511 – 522.

5.   Tetenbaum, T.T. 1999. “Beating the Odds of Merger & Acquisition Failure: Seven Key Practices that Improve the Chance for Expected Integration and Synergies”. Organisational Dynamics, Autumn, 22-36.

Paper adapted from Cowan, V & Swart, M.  2003. “The Petroleum Oil and Gas Corporation of South Africa: What happens to organisational culture when two or more companies merge”. Case Study Research Report presented to The UCT Graduate School of Business in partial fulfilment of the requirements for the Masters of Business Administration Degree.