When hearing a strange journey, most people's first reaction must be doubt, fear and resistance: we can't do this; Too risky, too expensive; We may fall off the earth. Columbus and his confidants may be excited, but only these people will be excited. Before finally getting the support and funding from Spain, his plan to explore the sea was rejected by the rulers of Portugal, the Republic of Venice and the Republic of Genoa.
But then, the mood began to change. This may be because of the support of influential individuals (such as Ferdinand II and Queen Isabella), or because the * * * organization is attracted by potential interests. Soon, the idea gained momentum and people began to clamor to join the ranks. What seemed impossible in the past seems not only feasible now, but also arouses people's yearning.
Although no one has gone into the water so far, he has experienced two emotional fluctuations, and the emotional ups and downs are not over yet. The ship actually set out. After the action began, the initial negative emotions relapsed and the obstacles gradually became bigger, resulting in depressed atmosphere and unclear progress. Like Columbus's crew, people are getting more and more depressed. They tried to turn the boat around and threatened to defect.
Whether the focus of the change action is cost reduction, organizational transformation, integration after business merger, or any other major changes, this ups and downs sequence pattern is very similar (see attached figure). In some ways, this is the enterprise version of bipolar disorder, and the mood is sometimes extremely high and sometimes extremely low. Of course, the result is the same: confusing judgment, leading to bad decisions, and the emotional pendulum swings to one side first and then to the other.
For example, when acquiring a business, the excitement of the transaction may lead the supervisor to overestimate the potential comprehensive effect and underestimate the organizational obstacles. However, when the M&A transaction is completed and the integration process is started, the reality appears. Cultural differences and operational challenges now seem huge and difficult to overcome. Some people left and some customers defected. Mergers and acquisitions that used to look great now feel like going astray.
After studying the causes of this extreme emotional ups and downs and the bad decisions it led to, organizational psychologists pointed out that in times of stress, people become prisoners of cognitive bias, unable to see the facts clearly and damaging their judgment. Different types of cognitive errors will occur in different stages of the reform period, so a series of emotions and mentality will be formed in turn. These mentalities will affect the way people process information, the importance they attach to specific experiences, and the way they look at feedback and other factors that affect judgment and decision-making. (See the sidebar "Common Cognitive Bias Affecting Change")
In fact, there are ways to avoid this situation. Some enterprises can keep their insight and wisdom even when facing major changes. They know that emotional ups and downs occur in a predictable pattern, they can predict what kind of emotions people will have next, and they help others to fight emotional ups and downs and reduce the dangers caused by emotional ups and downs. Research shows that successful control of cognitive bias and effective guidance of change can create great value. This is proposed in a method called "result-oriented".
In the research of more than 300 reform projects, Bain found that those projects (the top 20%) that managed the reform most effectively achieved 86% or more expected results. A quarter of these projects have achieved more goals than expected. In contrast, those projects that failed to effectively manage changes only reached 43% of the estimated value. In the long run, the most advanced projects have gained 8 times the profits and 2.5 times the return on shareholders' investment compared with the least successful projects.
Stage 1: planning a journey of change
When an enterprise puts forward a major new direction, people are usually skeptical and even threatened. They can't see the necessity of change, and they can't perceive the possibility.
In fact, change advocates are asking members of their organizations to get out of their comfort zone, but the way forward is blocked by people's cognitive prejudices, which hinder them from looking at change with an open mind. Because of anchoring function or relying on familiar reference points, it is bound by habitual thinking mode. Fuzzy effect leads people to prefer the known to the unknown, and their fear of the future increases. Confirming prejudice encourages people to look for evidence to support their fears and doubt the possibility of change.
When this inevitable cognitive deviation occurs, the leading team will feel uneasy, and they tend to prefer the idea of gradual reform rather than embracing more drastic changes. For example, a retailer began to supply goods on the Internet, which means that it has quickly entered the digital world, but in fact, it has fallen far behind those competitors who have adopted a more comprehensive and integrated digital strategy.
"Result-oriented" helps to untie these anchors. First of all, it collects factual data: the company's situation, customers' comments and opinions, the benefits that the reform can bring, etc. These data help to cut off people's cognitive bias by asking people's left brain (rational thinking). Another effective tool is to jointly imagine and create a clear and convincing vision for the future. By activating the right brain of the leadership team, the change advocates let them imagine the future of the new world and urge them to accept and support the change proposal.
For example, when a health care provider promotes major changes to improve patient satisfaction, it starts with the hospitalization/registration process of the hospital. At the change seminar, the company's * * * put forward a powerful metaphor for the vision, hoping that the hospital registration process is just like the hotel check-in process. When staying in the hotel, the efficient and friendly handling process vividly expressed the hospital registration process they hoped to provide for patients. All employees can understand this concept, which not only changes the definition of process, but also changes the behavior of employees, and even changes the design of hospitalization/registration service. A powerful metaphor can not only help people imagine change, but also help to speed up the process of change. The project team can make most decisions by themselves without high-level opinions and instructions, because they clearly know what the future state will be like after the change.
At some point in this process, people understood the idea of change and the situation was reversed. People's fear of change has dissipated and their enthusiasm has increased. What seemed impossible in the past feels possible now.
The second stage: climax
When emotions rise, new types of cognitive errors will be enhanced, thus amplifying emotional changes. Confirmation bias now strengthens people's belief in the possibility of change, and at this time it is also filled with optimism. This is a natural tendency of human beings, believing that we can control our lives and realize what we want to do. The influence of these cognitive biases is considerable, which can sweep away doubts or differences. Team members choose the most optimistic situation, believe in the benefits of the new direction, and think that they can achieve these goals in the shortest time.
At this stage, it is equally important to suppress over-optimism and pessimism in the initial stage. Excessive self-confidence and optimism may make the calculation of investment return blind, which will lead to excessive pessimism when the next wave of emotional fluctuations comes.
How can leaders mitigate these dangers? An effective tool is retrospection. The team can analyze what went wrong and what was right in the previous change action, and what is the typical failure type? What does our organization always do well and what does it not do well? In this case, benchmarking is very valuable. For example, a database containing data from nearly 300 companies helped Bain identify the biggest obstacle to change. People have a natural tendency to think that today's change initiative has the same problems as before. But when you learn from past experience, you can do better now.
It is also important to be forward-looking, so that team members can immerse themselves in the future vision they imagined together. Ask team members to think about specific details about future events, and they will imagine and create a richer and more accurate future reality. Then, leaders can think about what changes are needed to reach these levels and who will be most affected. This analysis can highlight the impact of change on specific groups and help guide everyone to become more pragmatic.
In order to foresee the future, we can first predict the possible risks, and then make a plan to mitigate the risks according to the analysis results. Generally speaking, there are 15 risks that most often undermine change actions (see appendix). In the life cycle of change action, these risks often appear in a predictable pattern, but at each stage, only a few risks will affect the success or failure of change. Risk assessment can help companies understand the risk status of change actions, identify four to five risks that pose the greatest threat, the order in which these risks occur, and the most effective tools to control and manage each risk.
For example, when merck kgaa, a German chemical pharmaceutical company, acquired Millipore, an American biotechnology equipment supplier, the managers of Merck KgaA drew a 2x2 chart to analyze the situation of each enterprise from the following two aspects: their importance in achieving the integration goal; The degree of chaos and subversion they will experience in the coming changes. This analytical model allows the leadership team to focus on supporting those who are most critical to the success or failure of the merger and those who are most at risk of chaos. * * * Clarify roles, set priorities and provide targeted change management support to help the two companies successfully integrate.
However, as the journey unfolds, there will inevitably be more emotional ups and downs.
The third stage: avoid rocks
After setting sail, everyone should be on board, but the actual situation is often not as expected. Obstacles appear, costs increase, and it is more difficult to take risks than people think. Some people argue that we should stop destroying. When optimism in ignorance gives way to pessimism in knowledge, even people who have a positive attitude towards change will have doubts. Supporters realize that everything will not be perfect.
Faced with practical obstacles, different cognitive biases have replaced earlier cognitive biases. In the face of reality, most people will become loss-averse: in the case of equal losses and gains, they are more willing to avoid losses than gain. When the situation becomes difficult, they will naturally look back at the familiar harbor they have left. At this time, negative prejudice greater than positive events will lead people to avoid losses more. At this time, there will also be normalization deviation, or ostrich effect: when people are in a new situation different from normal experience, they often fail to see the problem or underestimate the danger of the problem.
This is a critical and time-consuming stage in the process of change. Usually the focus at this time is to win people's determination and will and help them change their ingrained behavior patterns. There are various tools to help suppress people's innate negative mentality at this stage, among which the following four tools are the most effective:
Create a waterfall effect. High-level communication by radio is usually ineffective. It is better to create a company-wide dialogue and talk about the current situation through change. This conversation spread through employees: everyone in the organization heard about the plan from his immediate supervisor, who invited him to ask questions and answer them on the spot. In this way, every employee will hear the most reliable and best version of the story from the most reliable person who has the greatest influence on his work and life, and also let every employee feel that his problems and opinions have been heard, thus having a higher sense of control. In addition, this kind of conversation also helps to establish more pragmatic expectations. For example, Merck Millipore, a recently integrated pharmaceutical company, has implemented this kind of structured dialogue throughout the organization, which is the key to the successful integration of the two companies after the merger.
Train all levels to be advocates of change action. When people's lives are disturbed, their response usually follows a predictable resistance curve. Management literature often says that at this stage, companies should communicate, communicate and communicate again, which is wrong. Communication is necessary at first, but at this time, listening is more important than communication. A lot of monitoring work will inevitably fall on middle-level and grass-roots supervisors, so they must be trained to deal with the resistance of personnel. For example, they can learn that resistance is a natural and normal reaction of people in the face of chaos, a sign of progress, not a problem to be solved.
Give positive feedback and rewards to behavior changes. Change often requires employees to change their thinking patterns and behaviors in their daily work. In this case, the company should not only explain in detail what different ways employees should do things, but also explain and show how the company will strengthen employees to implement new behaviors.
For example, a bank invested heavily in a plan to strengthen cross-selling to customers. It informs its bankers which customers are suitable for cross-selling, trains them how to cross-sell, and rewards those who successfully cross-sell. The bank also designed a set of immediate feedback and reward mechanism for changing behavior. For example, after witnessing the interaction between a clerk and an impatient customer, the front desk manager standing by later said to the clerk, "You handled it well just now and didn't show a defensive attitude. Remember, on average, only one in five customers will buy cross-selling products. " This encouragement made the shop assistants continue to show the same behavior and adopt the same script. When he began to sell new products to more customers, the improvement of his performance score further encouraged him. This kind of positive reinforcement has four times the effect of changing behavior than just using pushing activities (such as training).
Encourage the attitude of "regarding the red warning as beneficial". A red alert indicates that a problem or risk has been found. In the process of reform, the red warning is often regarded as a negative signal, which is an outdated mentality. The red alert should be regarded as a signal that delegates really participate, indicating that they care about the success or failure of the change action. Successful change companies will train the change agents of each unit, pay attention to the greatest risks perceived by front-line employees, immediately discuss these concerns with departments, solve problems that they can solve within their capabilities, and report the concerns that require higher-level participation.
Conclusion: Build up the ability of change.
* * * People who try to promote organizational change will inevitably face the most ingrained mentality in human nature. Emotional ups and downs and cognitive biases associated with change actions usually damage people's ability to assess the situation and make correct decisions. * * * We must try to manage and alleviate these emotional ups and downs, not only their own emotional ups and downs, but also the emotional ups and downs of the whole organization. However, even after experiencing * * *, it is sometimes difficult to see the actual situation clearly. They will make promises that cannot be fulfilled, which will damage their credibility and reduce people's trust in change actions.
The most successful executives in leading change know how to establish a mechanism to ensure that cognitive errors are identified and the risks they pose are reduced. According to our experience, this is often the key to the success or failure of change actions. "Results-oriented" helps companies systematically identify risks and correct prejudices. The obstacles to change caused by cognitive bias are predictable and therefore controllable. By recognizing this system well and practicing counter tools, over time, the company can strengthen its own change muscles and establish a reusable change model, so that the company can not only effectively manage this change action, but also better manage the next change action. In modern times, companies must constantly change to survive and compete, and this reusable ability to change is a great weapon to defeat competitors.