People don’t hate change…they hate ambiguity (transcript)

PEX Network: Why do we hate change so much?

Daniel Lock: Well, I don’t know that we necessarily hate it that much. People change on a regular basis all the time. We get married, we have children, we move houses, and so on. I think what you’re asking me in the context of organisational change is why do people resist change so much and I think the reason for that is not so much that people hate change - they can usually sign up to the big bright light, the vision, and end result – but what they hate is the ambiguity. It’s the path on the way there that people have such a problem with.

People tend to avoid ambiguity and researchers have known about this for some time. They call is "ambiguity aversion". It causes people to do is to react as if they have received no information at all when they received muddled and ambiguous information.

This is an important insight in organisational change. What tends to happen when we get complicated, complex change, and we’ve got some moving parts, is that people don’t know how they’re going to get paid next week, they don’t know what their work is going to look like, and so on. All this ambiguity and uncertainty causes people to resist and it’s one of the major reasons people resist.

What managers can do (and what change management is about) is to close off wherever possible that ambiguity. This is means closing down ambiguity in the project, ambiguity in communications, and any ambiguity that results from change.

For instance, I’m helping an organisation at the moment with managing the roll out of a new system to all their sales people. Unfortunately, one of the two sources they use isn’t available and the one that they’ve got provides two different prices. This means that people don’t trust the system and there’s ambiguity.

I’ve said to the managers, "staff are not resisting. They’re just acting as you and I would if you received inadequate information." So we need to fix it. We need to implement a proper solution to enable people to use this system and there’s a lot of reasons people would want to use this system over the other ones, but they’re resisting because of the ambiguity that’s inherent in the system currently.

PEX Network: In your new e-book which looks at the fundamentals of change management, you explore what you call the "traditional approaches" to change. You name the carrot and stick approach as well as something called normative pressure and you think that there’s some really powerful reasons why they don’t work. I wondered if you could perhaps take us through those approaches briefly and then explain why you don’t think they work?

Daniel Lock: The carrot and stick approach is an approach that provides both punishment - the stick – and incentives - the carrots. If you look at the stick and the punitive measures that you might take such as loss of bonus or job, are what the organisation will use to punish their people, so to speak. What actually happens in complex environments - especially in knowledge work environments – is that people will just opt out and if you haven’t provided the support structure, really provided the infrastructure for them, people will often just quit before really facing the challenges which are in front of them.

The other side of that is the carrot. What happens there is that organisations believe that if they just pay a sales person more commission they’re actually going to work harder. But it doesn’t really work that way, unfortunately. People work more for the intrinsic nature of their work, particularly in knowledge work, rather than the income itself or the incentives.

So unfortunately neither of those approaches are as effective as managers would like. They have their place in an organisation - people don’t go to work for free; it’s not a charity for them - but they are not to be relied on as a primary driver for behaviour change that managers are looking for.

The other one is normative pressure that you mentioned. Normative pressure is peer pressure. As your mum said when you were a teenager, "will you jump off a cliff just because everybody else is doing it?"

It still applies in the modern environment as well but is not as effective as you might think either and, if misapplied it can actually cause some real problems.

For instance, one of my first employers out of university - a bank - had a financial planner come in and meet with staff. He told me that everybody was doing a certain type of investment because it was good for their superannuation and that it had special tax benefits. He told me everybody was doing it, implying that this meant my colleagues as well.

I signed up but when I looked into it and I asked questions around the office, I found out that in fact that wasn’t true. He’d simply signed up everybody, and consequently I ended up dropping out of that, and so did a lot of other people.

I think that’s very indicative of what normative pressure is about. It’s quite powerful. But you’ll find that when people find out about it, they react quite negatively when they’ve been pressured into changing their behaviour.

There have been other studies where people have had actors come into the room and show people three lines. One is clearly shorter than the other. Yet the actors convince the person who is the subject, that the shorter line is actually the same length as the others. That’s just another example of how powerful peer pressure can be.

But it can be short lived when people are coerced into changing their behaviour. When they find out that they’ve been "had," they quickly go back on the behaviour change. What we’re looking for in change management is to sustain real behaviour change and the only way you get that is through enlightened self-interest. I talked at the opening about people changing all the time and the reason people do that is because it’s in their own rational self-interest, and that’s what you need to get to.

PEX Network: That’s interesting because it does seem like companies need to change more often and probably in bigger fashion than they have before in the past. The word transformation seems to be getting bandied about a lot. How do you propose that companies handle change better?

Daniel Lock: That’s a great question. Change is coming at us thick and fast. We need only look at Nokia who’s now pulled out of mobile phones altogether whereas only ten years ago they were the darling of organisational literature. All the adulation we give to Apple these days was Nokia’s - but now they’re out of the business completely. That’s how fast technology is moving these days so, yes, organisations need to be adept at change.

I think organisations can do it better in a few ways. Number one is really a focus on relationships. John Kay is a British economist and he wrote about this in the 1990s. It’s a great book and what he pointed out was that organisations succeed because of their relationships, the relationships they have with their suppliers, with their employees, and with, of course, their customers.

He gave a great example of Benetton, the clothing maker, was doing very well in the 1980s - they were sponsoring Formula One and doing all sorts of great things at the time. They decided they wanted to move into financial services. So they hired someone from Citibank at the time and tried to get into financial services in which they had no competence whatsoever, no relationships, no skills.

It’s an old example, but I use it because it’s an illustration of how intrinsic skills in an organisation, unique skills which have application in the marketplace, are important and that’s what organisations need to focus on. They need to focus on their skills of their people, how they’re applied into the marketplace, and the relationships they have with their suppliers, and that human focus, the focus on relationships, if it’s applied in the market makes a big difference.

By way of another example – Microsoft is changing leadership at the moment. They’re now refocussing on what they should focus their attention and I think one of the reasons that Steve Ballmer is going is because his foray into hardware over the last few years has not worked out. I think it didn’t work out because they had no skills in that space. They’re not like Dell, they’re not like Apple, they’re not into hardware. They’re a software company and primarily applying that software to business as opposed to consumers like Apple.

I think that the way organisations think about their relationships with their employees, their people, can make a big difference and that’s why change management can really help an organisation because it’s people centric as opposed to technology centric or some sort of process centric approach to business.

PEX Network: I guess that the next question that follows then is, what are the personal attributes and behaviours that someone actually leading change need to exhibit?

Daniel Lock: I think the person who defined personal leadership best is Marshall Goldsmith. He did some research and turned up eight attributes that define a great leader. Change is all about leadership that cascades from the very top all the way down. What he said was that of the eight factors, there was one that stood out. This was relationships. He said you build relationships through contact and he made the catch phrase that "leadership is a contact sport". He’s 100% correct.

If there’s one fundamental key that people can use to drive change it’s to have face to face contact with people. Find out what’s going on and drive them through the change. If it’s just a simple system change, providing some coaching and mentoring makes all the difference. It’s that type of thing.

To improve productivity in organisations you need only get leaders out in the field. With organisations that have field staff, leaders often spend only 2% of their time in the field with their people. But when they do, they automatically start mentoring, they automatically start giving them coaching and advice, and role modelling the behaviour that they should be supplying.

Even if you do no other thing you’ll find that the organisation’s productivity will pick up just because your leader is out there in the field. That role modelling and the coaching and the relationship and the contact that you have with your front line staff is critical, from the top all the way down through the management. Getting out in the line is critical.

PEX Network: One of the cool things that you discuss in your book is something called the "buy in index". What’s the idea with that and how does it actually work?

Daniel Lock: This is a great little tool and it actually gets people to stop and think midway through a project. One of the problems you have in a project is the "watermelon" effect where the project status goes from green straight to red - green on the outside and red in the middle - and there’s no amber – warning lights – to let you know it’s about to happen.

One of the reasons for this, particularly in change management, is that in your focus on the change part of the project you’ve got no lead in indicators. It’s really all just gut feel.

The project is going well, you stop in a hallway at a working group meeting or a steering group meeting, and the sponsor says, how’s the project going? You say, I think it’s going pretty well. But then tomorrow there’s a big blow up and the next thing you know it’s red and the sponsor is just wondering how this has happened.

The antidote to this is good lead in indicators. I use the buy in index as a lead indicator for change. It’s a simple set of five or six questions that I’ve devised. They are pretty straightforward and then I randomly select some people with experience on the subject of this change and I call them - it is important to call them - and ask them some very straightforward questions on a scale of one to five. I get a feel then for whether the message is getting through, whether their immediate manager is giving the support they need, whether they believe that they have the resources for this change to be effective and so on, and it’s a great tool to get a temporary detector of how your progress is going.

I used it recently in a project and I went to the steering meeting and I said, look guys, I’d just like to have five minutes to talk about change management on the agenda and I’ve used this buy in index and here’s the results. What we found was that the frontline manager hadn’t actually been spending any time with people in the field. For frontline management this is critical to be able to effect change. If they’re not on message and supplying the behaviours that are needed for change, such as giving assistance, for example, people won’t take the message seriously.

PEX Network: So I guess my very final question after all this is what’s your best piece of advice on how we can handle change better?

Daniel Lock: Number one comes down to reducing ambiguity. Close down the ambiguity in processes, in relationships, in hierarchy, the tool itself, and provide feedback mechanisms for how issues will be resolved. People don’t expect things to go perfectly in projects – as things never do go perfectly - but people do expect that they will be listened to, they expect there will be a process follow up and that the process will be clear. So they are the ways you can close off ambiguity.

Number two is getting the leadership organised. You need to make sure that the messages of senior leadership and project sponsors are all correct and make sure you’re coaching senior leaders to say the right thing. Give them a few one liners, find out where they’re having their town hall meetings and so on, and make sure you help them craft their messages.

Number three is to make sure you get your frontline managers acting and reinforcing that change. It not so much about what they say, it’s purely about what they do. So whereas senior leadership will talk about the bigger reasons for the change, you need the frontline managers to actually be coaching and mentoring and reinforcing and displaying the right behaviours that they expect to see.

If you get those three things right, you will be able to effect change and be successful.