The New Leader’s Guide to Change Management

Resistance to change is part of the human experience. People cling to familiar routines and the comfort of the status quo because they feel safe and predictable—even when the advantages of change are obvious. This is especially true in organizations where long-standing processes and hierarchical structures create resistance and slow the pace of change.

In fact, according to McKinsey, organizations face a staggering 70% failure rate in change management programs, primarily due to this inherent resistance from employees and the organization’s fear of associated risks. 

However, we know that change is essential for growth, adaptation and well, survival. Companies that fail to embrace change risk falling behind competitors and becoming irrelevant. Look at Kodak and Blockbuster, for example: Both companies were once industry leaders: Kodak dominated the photography industry, and Blockbuster was a giant in video rentals.

However, Kodak was slow to embrace digital photography, and clung to its profitable film business instead. That profitability, in the face of changing consumer behavior, was short lived. In the early 2000s, the company’s profits plunged and ultimately led to the organization filing for bankruptcy in 2012. Similarly, Blockbuster underestimated the rise of digital streaming and the convenience it offered compared to physical rentals. As a result, they were swiftly overtaken by Netflix and other competitors, which better aligned with modern consumer preferences.

The lesson is clear: without continuous adaptation and innovation, even the most established companies can become obsolete. So, the question remains: as leaders, how might we overcome these challenges to successfully implement change at scale? 

What Drives Change?

According to Kurt Lewin’s influential theory, change follows a three-stage cycle: unfreezing, changing, and refreezing. The first stage, unfreezing, involves disrupting the status quo and creating a sense of urgency for change. But this doesn’t have to be negative. By clearly communicating the “why” behind the change – the new opportunities, improved efficiencies, or competitive edge it can bring – leaders can start to build buy-in across the organization. 

The major drivers of change in organizations can be categorized into internal and external forces.

Internal forces include initiatives like developing new competencies for growth, acquiring new expertise, or bringing in new leadership to proactively shape the organization’s future.

External forces are typically reactive, responding to external circumstances such as political or trade policies, mergers and acquisitions, new competition, or emerging technologies. These external factors often influence an organization’s long-term vision and priorities

By understanding the why – the reasoning behind the change, employees are more likely to feel motivated and invested in the initiatives success. But that’s only half the battle, as employees also need to understand how. This is where frameworks like Force Field Analysis can be useful.

Imagine a tug-of-war, with driving forces on one side pushing for change (e.g., outdated technology) and restraining forces on the other (e.g., employee’s fear of job security).  By considering both sides, leaders can develop strategies to strengthen the driving forces and address the concerns fueling resistance.

Building Momentum & Aligning Teams Around Change

When an organization determines that change is necessary in response to internal and/or external factors, the next step every leader should undertake is to define a clear vision for where the organization is heading.

Your organization’s core values play a fundamental role in change initiatives. Remember that core values are not expressed in what your company does, but how work actually gets done at your organization (or should get done). They provide a universal foundation and shared language around which new initiatives can be built, and provide a sense of stability for employees that feel uneasy facing impending change.

Along with that, a clear picture or vision of your desired future—fueled by core values—can act as a guiding light for the journey ahead. A well-articulated change vision should excite and motivate teams, aligning them towards a common goal. 

Recommended Download: Change Vision Template

Before embarking on any change initiative, it’s critical that you have succinct, clear and comprehensible answer to these key questions:

1. Why is this change necessary?
2. What exactly are we changing?
3. How will we lead the change?
4. How will we actually implement the change?
5. Who will be responsible for driving and sustaining the change over time?

Once these questions are addressed, a structured roadmap for rolling out changes will also greatly increase your odds of success.

The Human Side of the Change Equation

According to Gartner, between 2016 and 2022, companies significantly increased the number of change initiatives they undertook annually by 400%. However, employee support for these changes decreased by 42%. 

It’s possible this decline in support is due to the overwhelming volume of change initiatives occurring simultaneously. This can create a negative environment for employees as the constant whiplash brings about a struggle to adapt to the constant influx of new priorities, and disrupt the ability to maintain productivity.

Recommended Read: The Pitfalls of Change Management

Change management, at its core, is about managing people’s experiences through transition. Different personalities react to change differently. Some may be early adopters, eager to embrace the new. Others may be hesitant, requiring more support and reassurance. Understanding these diverse responses allows leaders to provide targeted support.

Communication is especially crucial during change. Regular updates, transparency about challenges, and open dialogues build trust and foster a sense of ownership among employees.

The Key Stages of Change

Not to be cliche, but transformation is truly a journey with distinct stages. We’ve provided a simplified breakdown of those stages, with some tips and resources for navigating them.

Stage 1: Making the Pivot

Identifying an Opportunity for Transformation

There will be a moment when the status quo that’s been working for teams, simply doesn’t work anymore. This could be because of any of those internal or external factors, or a combination of them all. This first stage of change is to acknowledge that, and to identify in what ways you want to challenge the current state of the organization.

When we’re standing in the face of new opportunity, it’s time to cycle through the How Might We…? questions and consider: what is the “How Might We…?” question you want to answer through this change?

• How might we … put customers at the center of our business?
• How might we … socialize insights to drive innovation?
• How might we … work cross-functionally to capture shared expertise?

This first stage is all about identifying what exactly is it that you want to challenge in your organization, and making that clear from the start.

Leading the Pivot

When leaders and organizations come to the moment of challenging their status quo, they often look to “Innovation Labs” to pave the way. The problem with this approach is that, unfortunately, labs don’t work.

In our experience, we’ve found labs are often too detached from day-to-day business to solve for challenges plaguing the organization and coming up with solutions to address them. This is especially true for changing organizational culture.

A more productive approach is to identify a Pilot team within your organization. A Pilot team is wildly different than an innovation lab, in that they’re role is to test specific initiatives, projects, or solutions on a small scale before rolling them out across the organization. The focus is on assessing feasibility, identifying potential issues, and refining the approach based on real-world feedback.

For instance, here’s an example from Pixar: When developing the original Incredibles film, the team knew that had to push against existing norms to create the story they wanted. Leadership on the film famously assembled a team of “Pirates” to think differently, work differently, and create differently, to bring the story to life — and thus, changing the way Pixar animated their films forever.

As you roll out a change initiative, there will always be a group of people that want to be the first to try new things, and want to pave the way for new ideas and new thinking. Your goal as a leader is to identify who that team is, by asking:

• Which team has curiosity and open-mindedness about trying new approaches?
• Which team stands to benefit the most from shifting away from the status quo?
• Which team is stable enough to withstand changing routines and expectations?

Stage 2: Calibrating Performance

Redefining Success & Focusing on the Gain

Once you identify your Pilot team, you need to also consider definitions of success and performance standards. If organizations are asking teams to work and to think differently, it’s only right that their success is measured differently. Pilot teams, by nature, need to be measured and evaluated differently than other teams across the organization.

All teams are expected to meet business objectives, but a Pilot team is also meant to answer questions about how the organization might work differently to achieve even better outcomes than before. Instead of measuring with traditional metrics, determine what question the pilot group is expected to address. How do Pilot teams “pull value through” their work into the broader organization?

Instead of measuring teams on traditional performance metrics, think about how this team will pull value through to the broader organization: What process might they uncover? What business partnerships might they find? What collaboration approaches might come from this new way of thinking?

Of course, there are two pitfalls that typically happen when organizations set up pilot programs: They either declare success too early, when the team might hit their first milestone, or launch a new product. Certainly, those are great accomplishments, but that doesn’t necessarily mean that their success can be repeated or scaled. Most leaders tend to stop here and say “we did it”, when really, they’re just getting started.

The other side of that argument is prescribing a goal for a Pilot that’s so future-facing that it feels impossible for the team to achieve. That could be something like redesigning a more engaging, personalized in-store experience; or reducing customer service costs by implementing the use of AI.

While these are great desired outcomes, they do nothing to help teams get started on the right foot. Instead, leaders and teams need to adopt the mindset of “Focusing on the Gain,” as described here by Omar Itani.

To move away from that elusive, end state thinking, you need to implement a gain and gap approach to measuring progress in change initiatives. Instead of focusing on the gap—the distance between your current state and your end state — you’ll and your team will find more motivation, fulfillment and happiness by focusing on the gain, and you’ll more effectively lead to the actual end state vision.

Stage 3: Shifting Mindsets & Behaviors

Building Momentum for Change

Quick and early wins are critical to overcome resistance and demonstrate the benefits of change. This creates a ripple effect in the organization, pulling early adopters and eventually the early majority on board.

In this stage, you have establisehd your Pilot team and they’re starting to see some traction. Whether intentional or not, they’re also becoming ambassadors of change as they traverse the “hurry up and wait” nature of organizational transformation.

Anticipating this is critical to identify for which priorities will create the most momentum in the shortest amount of time. Realistically, there’s no urgency to achieve a long-term vision, but there is urgency for a pilot team to accomplish something, quickly. You need to identify champions across the organization who will become the biggest ambassadors for the work your Pilot team is doing. You need to do this early enough and demonstrate success quickly enough, while excitement for innovation and change is the highest.

Stage 4: Shifting Mindsets & Behaviors

Leading and Communicating Change through People and Culture

Remember that change is ultimately about people. You’re leveraging Pilot teams to model new behaviors that will make teams more successful than they are in their current routine. This modeling requires understanding relationships and building networks of allies, which is what this final stage focuses on.

When we think of how employees relate to each other in an organization, the traditional org chart comes to mind. Employees know who they roll up to, which department goals they’re participating in, and who sits within and outside of their normal activities. But this isn’t a place to start when thinking about building relationships across an organization; when thinking about challenging and shifting the status quo.

Org charts look nothing like the web of people required to actually do the work. Instead, an Organizational Network Analysis (ONA) is one way way to visualize how communication, information, and decisions flow across a network, in this case, an organization. By mapping and leveraging this approach, you can increase operational effectiveness by finding the most efficient means for information to travel, and transform organizations in a smarter way by identifying formal and informal leaders who can accelerate change.

Cementing Change through Daily Rituals

A transformation isn’t truly successful until you see it reinforced in daily routines and rituals. These routines might include new communication practices, performance management approaches, or even leadership behaviors that reflect the desired new culture.

Changing an organizational culture is a process that requires time, and oftentimes patience. There may be near-time successes, or moments where new activities and behaviors are moving to the forefront, but it will likely take years for those cultural norms to solidify across teams, business units and departments.

If you’ve read this far, you likely now realize that unlocking change at scale is challenging. But, it’s not not impossible. With the right approach, a clear vision, a focus on people, and strategic know how, you can very easily be the one lead your organization through successful change. But if you need help with any aspect of this, reach out to us for a consultation. Our team of experts would love to partner with you on every step of your change journey.

For a deeper dive into these strategies and more, access our on-demand webinar, “Unlocking Change at Scale.”