Change Management Quest

Change is the only thing we definitely know will happen next. Why is change management still a tricky combination of art and science? Here is what I have learned from building my own company in the 90's, then selling it to GE; six years with GE including a global job in the US; and five years as CEO of the largest private sector bank in Russia.

Any change happens in the context of who is defining the success. It may not be your definition but rather your superior's. I observed many times in my career that people undertook major reshuffles before checking how their superior defines success. It is an unfortunate situation when a leader comes back after leading tough changes to celebrate with his/her boss only to learn that nobody asked for that change, and it was unnecessary. Go and verify the definition of success with the relevant constituents first.

There are a few fundamental questions to ask when you are considering a change. "What is the problem?" and "Why is it a problem?" and as previously discussed, "What does the 'success' look like?" It is essential to write your answers on paper. Then, "What will happen if we change nothing?" often provides interesting insights.

It is important to understand the scale of planned change and use appropriate approaches and instruments. Major organizational change touching hundreds or thousands of people is different than changing one of your direct reports.

There is another important thing to understand—all bigger scale changes go through a phase when things look worse than previously. If you decide to change kitchen furniture and appliances then expect to see a lot of dust and old stuff. At this intermediate stage, a snap shot definitely looks much worse than the original configuration. Accordingly, you must manage expectations.

Once you know you are to lead the change or you are part of a bigger change process, your active approach is key. Change needs leadership. And leaders must walk the talk!

Change is about energy, and the shared need for change is the best source of it. If you do not have it you get a lot of pushback. During an alignment process, the vision of the future should be shaped. What is in scope and out of scope is a key question. A lack of scope control is a reason for many change failures. Keeping it simple and looking for best practice pays back big time. Cultivating alignment is the best source of commitment. It comes when key constituents agree to change the way they act or behave. Successful change has to become integrated into the next level of organizational development. Monitoring the progress—divided into relatively short, up to three-month, measurable milestones—and ensuring accountability is key.

Lastly, management practices in the organization need to be supportive to the desired change. There are many proven tools for every step in the change management process. My advice is to use them.

There are a few important change management lessons I learned that were equally applicable whether I was turning an old bureaucratic bank into a modern GE Capital bank, developing best practices sharing across GE Capital's operations in 40 countries, or leading Alfa bank in Russia to the next stage.

First, make sure you understand before demanding to be understood. Often, leaders under pressure start changes before asking many questions.

Second, build on positive energy, support those early adopters and positively ignore resistors. It means give equal chance to join, but do not spend too much time with resistors. Some will join and some will not, but those early adopters will get you there. They need all your "unconditional" support, energy and commitment.

Third, be prepared to communicate well. Be honest even when news is bad. People can handle truth better than a lie.

Fourth, you need the right people in critical roles. Talking to leaders, I often use the example of producing fine porcelain. If you use regular soil and try to produce great porcelain you will fail even with skill and knowledge. You need good kaolin to be able to do so. Likewise, you need talented people with skills to be able to get you there. That is why I changed 80% of the team in the acquired bank in the Czech Republic and four out of ten board members in Alfa bank in just 10 weeks.

Fifth, do not forget that 2-5% of people generate change, 15-20% can adapt and about 80% do not like to change. Those 20% have to convince the majority of the 80% for you to succeed. Timing can help. People are more open to change when you or the circumstances are new. You may face much more resistance if you procrastinate.

Last but not least … if things clearly do not work and you still do not have a perfect way forward, do the change anyway because this is often a fast way to find better solutions.

Change is a manifestation of life and the need for change will be with us forever whether we like it or not. Our attitudes, our energy and skills, including people skills, are key. That is why those with positive energy, who see opportunities and have the ability to lead, drive successful change. Do you want to be one of those people?