Starting anything new can be a challenge. It can be especially so at the beginning of a process improvement initiative. Whether the new methods come from Lean, Six Sigma, a hybrid of the two, or a homegrown philosophy, people have a natural resistance to change. And managing that resistance poorly can lead to disastrous results. In fact, the 2009 edition of Proscii’s “Best Practices in Change Management” report said that 95% of projects with an “excellent” change management grade were successful (met or exceeded objectives), compared to only 16% of those that were graded as “poor”.
What does that tell you about your improvement initiative? Well, obviously it does not mean that you can neglect the technical aspects of getting new processes in place, but it does mean that there is more to successfully changing a culture than just giving a team the tools and skills to succeed. You also have to focus on how the new way of doing business will affect the team.
When talking to employees for the first time about changes, leaders have to tread carefully. One misstep can get things started off on the wrong foot. Delay talking too long, and teams will start to sense that ‘something is up’ in the leadership ranks. But often in the early stages of decision making, very little detailed information will be available.
Here are a few recommendations to use when first starting on a new path of continuous improvement. (By the way, ‘you’ in this article is the leadership team. Don’t skip the article if you are ‘them’-the team facing the change. There is still a lot to be gained in knowing what your leaders should consider when announcing change initiatives to you.)
Initially, focus on answering just two basic questions.
The reasons companies choose to formally launch a continuous improvement program are varied. The common perception is that a company is in dire straits and is trying to find a lifeline to pull it back from the brink. The truth is, though, that while those stories are the stuff of Lean legend, when a company is teetering on the edge of bankruptcy, it is difficult to save it, even with a system of thinking as powerful as Lean. Why? Because developing a continuous improvement culture is a long journey, and most companies in that position don’t have the time to save themselves.
Now, there is an advantage to launching a continuous improvement initiative when the company is in trouble. The teams know about the problems, and it is relatively easy to rally them around a change. After all, they know that their jobs are at stake. But be careful about trying to fabricate an emergency. Employees are smart, and will see through transparent ploys, and even the best pseudo-crises will eventually be found out. If employees feel misled, trust between bosses and teams will decrease substantially. And again, by the time a crisis hits, even with a committed team, time is not on your side.
For many companies, though, the decision to formalize their improvement program does not come when the walls are crashing down. For them, it is a natural progression. It could be that there is new leadership infused into an existing company, and they have strong Lean backgrounds. It could be that the company has been mired in mediocrity, and is looking for a way to separate itself from the pack. It could be that the company has seen solid growth and has just gotten too big for its processes. Or it could even be that the company was recently acquired and has to conform to the new parent’s existing business system.
Now, in all of these cases, the company very likely is already doing some form of continuous improvement. Companies in the modern world do not succeed unless they can adapt, and that means solving the various problems that continually pop up. So the change initiative they are starting more often than not entails formalizing, structuring, and extending what people are already doing. Make no mistake, the changes are big ones, but they will not be completely foreign.
So, for the first question, the key point is to be honest with the team. Explain the rationale for the decision to formalize the program. Be clear about what the company hopes to gain. Talk about any major competitors. Let the team know about dips in share prices, or rising costs of financing, or new business challenges on the horizon.
Here’s the hard part, though. Employees may completely agree with all the reasons. They may see the need. They may understand why the company is choosing the path that they are. And they may believe that the chosen actions would be effective at reaching new heights of performance. But they may still not get on board. Why not? Because of the second question above.
The main message people want to hear is what the changes will mean to them. They want to know what to expect in terms of workload, how their jobs will change, and what the new expectations will be. And they want to know what they will personally get from a continuous improvement culture. The last one is by far the most important. The “WIFM?” principle—what’s in it for me?—is a major driving force for most employees. They want to do a great job at work, but the simple fact is that making more money for the owner or shareholders is not generally the key driver of their behavior.
Motivation comes from a variety of sources, but I have yet to see a manager ask a team to work late so a dividend will be a few cents higher. Imagine a manager telling his employees, “We want the owners to make $2.7 million this quarter instead of just two and a half. Cancel your weekend plans.” If he did, I am not sure that the extra hours would be all that productive.Convincing a team that changes would be good for the company is easy. Convincing them that the changes will be good for the rank and file is the hard part.
If the key point for the first question was honesty, the key for this one is believability. Don’t talk unicorns and rainbows. Life is not perfect in a continuous improvement culture. But it is much better. Tout the benefits. Don’t get into details at the beginning. Talk in general terms. Remember, this initial communication is not a training session. It is intended to keep people informed to reduce the fear associated with change.
So, the good first…
And, of course, if you talk about the good, you will also have to address the challenges.
When leaders talk about the transition with their team, they have a lot more credibility if they address the hard stuff as well as the benefits. But talking about challenges still doesn’t mean leaders can overpromise on things they do not plan on delivering. For example, if you are going to standardize and set workload expectations off of the resulting cycle times, you have to be prepared to hire more people if the numbers say you are understaffed. If there are things that are absolutely not going to happen, then don’t make the promise.
For your conversation, tailor the list of benefits and costs to your organization. The nuances of your business will drive the lists, but go into the conversation with a clear idea about what you are going to say. Depending on your situation, you may not want to go through the complete list in your first discussion with the team, but it is a good idea to have it prepared in case you are questioned about specific points.
Far and away, the biggest fear employees have with any improvement initiative is job security. They hear productivity, and think layoffs. Now, from a management perspective, you face a tough challenge. Let’s say you get the team on board, and make some fantastic improvements over the first year. Productivity skyrockets, and suddenly you have people standing around. Idle people is looked at as a problem in traditional management. Plus, the call of the income statement will beckon, and it will be tempting to adjust the staffing to match closer to the right levels.
RESIST THE URGE!
If even a single person loses a job due to improvements, the idea well will dry up in a hurry. People will absolutely NOT put themselves at risk, especially in a down economy when jobs are hard to find. I recommend making a definitive promise that nobody will lose their jobs as a result of improvements. In periods of growth, it is an easy promise to keep. Even if you double your productivity, if you experience growth, your bottom line will be rising, even if your team is standing around half the time. Tempting, yes, but you’ll catch up soon enough through attrition, hiring freezes, and letting growth catch up to headcount. Plus, you’ll be able to put that idle time to work making more improvements.
The challenge comes when business is contracting, but productivity is rising. Your bottom line may be shrinking, even as you are overstaffed. This is one of those leadership gut checks. Again, a single layoff, and the flow of ideas will stop.
In truth, though, in most cases, the things that improve productivity will also drive down lead time, reduce defects, and improve customer service. You’ll be in a pretty good position to turn sales around and eventually be staffed properly.
Why discuss this future issue in this article about initial conversations? Because I recommend that you formally announce a ‘No layoffs as a result of productivity increased’ policy. People want to hear that they are safe. If they don’t hear you commit to their job, they won’t commit to your initiative.
(Notable exception: If a company is acquired, layoffs should still be a last resort. But if they are necessary, do them all at once and promise the survivors that there will be no further layoffs. You don’t want new members of the team operating in perpetual fear in addition to the other challenges they are facing.)
There are many other reasons people will resist change. Be prepared to address these issues when having the initial conversation. Have some ideas in your hip pocket to calm concerns about the following reasons. (Click this link for a more detailed explanation of these reasons people resist change, and how to deal with them.)
If you are ready for the resistance, you’ll be able to keep the majority of people moving in the right direction. In any group, there is the middle majority, and then small groups at both extremes. You will likely see a group of people who immediately jump on board with your change. Most will, however, move slowly, and need proof to fully commit.
The other small group will be the resistors that will be unlikely to ever commit. Some may, and those that do tend to be great advocates, but for the most part, there will be a select few that will not fit into the plans of the company. Fortunately, many of them self-select over time, and will leave the company on their own, but during the initial communication phase, they can make things hard.
When you are talking about changes, resistance can snowball in a hurry. The key is to try not to engage in convincing people at this point, as it lends weight to what they are saying. In general, their concerns are valid, but overblown. Spending time on discussing them openly in front of the middle group can be detrimental. Instead, acknowledge the concern. Don’t try to convince people. Tell them you’ll revisit it when things start moving, and you’ll make sure to address that in the planning. And then do it.
It will end up swaying more of the middle group to supporting the change if they think you are addressing concerns. Don’t get into a fight you won’t win, even if you are right. You won’t change an emotional decision with logic. That point is worth repeating. Never try to logic a person into changing an emotional response to something.
I do recommend watching for the fears that people demonstrate, whether overtly or subtly. The more information you have about the source of the resistance, the more you will be able to help them become comfortable in a continuous improvement culture.
It is worth having leaders talk to their teams before anything noticeable happens. Whether it is the posting of metrics boards in the work area, having a consultant come in to assess the organization, or rolling out sweeping changes, in the absence of communication, employees assume the worst.
There are really just a few ways of telling people about upcoming changes.
The first is the one-on-one conversation. While it is easy to address specific concerns, the rumor mill will churn faster than bosses can talk to their whole team. Another problem is that the message is not likely to be consistent. Some people may get slightly different versions of things, adding to employee concern when they compare notes.
Instead, I recommend having small group leaders handle the initial communication when the ball is just getting rolling. You won’t have enough information for a CEO to gather the whole company (the third method of announcing changes)—after all, the plan will likely not yet be developed. But there will be mysterious happenings around the company that will need explaining.
So, start with the team leaders mentioning that senior leaders are looking into new ways to run the business that will make continuous improvement a bigger part of the job. Stick to the two basic questions listed above, and keep the first mention of it short. Think 5-10 minute overview. Again, keep things simple and let the team know that more information will be announced as it becomes available.
To keep the message consistent across the organization, though senior leaders should prepare a basic outline to distribute to the frontline leaders. This will ensure first that frontline leaders really do understand what is going on, and second, that all team members will hear roughly the same thing. And again, make sure that to mention that you’ll be providing more information as the plan is developed.
Be direct about the timing of the communication. Let them know that you are in the process of formulating the plan, and want to let the team know what is going on in case they see some unusual activity. Tell them that developing a new improvement system is happening, but how is still up in the air.
The key here is to open the door for involvement. Ask if there is anyone who wants to be a part of the planning. Ask for specific problems or changes that the team wants looked at. You may even consider having employee representatives from the frontline teams be a part of the planning process or have them become members of a steering committee. People will be more convinced that the changes will be good for them if one of their own has a voice at the table.
As you wrap up, let employees know if there is anything on the horizon and let them know what to expect. Finally, set a time for the next communication on the topic. Even if the update turns out to be a report of no progress, people will appreciate having an established communication channel.
As the initial strategy is developed, the plan will start to crystalize. Keep the team informed of where things are and what is going on. Always let them know what to expect next, and give them a timeline as soon as it becomes available. Consider posting an action plan up on a bulletin board, and providing resources for them to learn more on their own.
Make sure that teams feel like they know what is going on, and that they have a way to address concerns. The more teams trust their leaders, the more likely the project will be successful.
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By Jeff Hajek
August 22nd, 2011
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