Managing fundamental organisational change: 5 lessons for the CxO

Change has become synonymous with upheaval and chaos, and as a result, it has become critical for companies to understand how better to manage change. Indeed, I think it is a key requirement of a CEO and all associated c-levels to be adept at change management!


So that we all start with a common understanding of what change is: Change in an organisational entity, where an entity may refer to an entire organisation, parts of the organisation, or relationships between organisations, is defined as a difference in form, quality or state over time of that entity. 


It is also useful to distinguish the process of change from the content of change. Content refers to what it is that actually changes within an entity, as well as considering the antecedents and consequences of that change. On the other hand, process refers to how change occurs, and considers the sequences of events that occur as change progresses over time within the organization. Given this, I'm not sure how external, process-based change managers can properly handle organisation-wide change management programmes without proper strategic insight such as understanding the timeline and content of strategic change about to occur within the organisation... 

Of the many different examples of change, the one of particular interest to me is the change in organisational operating boundaries, change brought about by activities such as mergers, acquisitions, or divestitures; establishing joint ventures or strategic alliances; modifying or extending customer acquisition activities; or organizational expansions or contractions in regions, markets, products/services, and even in international geographies. In other words, change that impacts the organisation at its very core and that as a result, impacts most if not all people within the organisation. 


Organisation-wide change such as that outlined above are a fundamental kind of change that totally interrupts the status quo at all levels and across all elements of both the business model and the operating model. As such, it introduces business continuity risk, which clearly needs to be reported into the appropriate governance structures at board level! The launch of a brand new product or product category, entry into a new market, lay-offs, acquiring a new company, opening a new channel are all activities that can be considered as fundamental organisational change, as they all introduce something totally different to what used to be, impacting people, process and technology at one level, and markets, products and channels at another. Note that your customer service is also at risk during such extensive change. 

In some ways, these changes can be thought about as a result of a business intentionally evolving through its business life cycle, driven by strategic, competitive, economic or legislative drivers. In three years of having driven such change - two acquisitions, two divestitures and three turnarounds - I fortunately cannot yet have an appropriate conversation about the change management required for a huge environmental shock, a Black Swan event. 


So what are my four major lessons?

• You can never reinforce the burning platform enough. There must be no question in the organisation about why the change is happening, and therefore why the change is necessary. You need the full buy-in of your organisation in order to be able to tackle the change as a team
• You can never communicate enough. This is the toughest part of change management for me, because it is not always possible to properly keep your team updated given so many sensitivities in big change, which often involve many different external parties. The choice is simple, keep even an inane flow of information into the business, or none at all. But never fabricate communication! Your team needs to have the right amount of information in order to perform at their best in a potentially stressful environment
• Because "the only constant is change", change management is not something that merely oversees a strategic event. Instead, it is a fixed and trusted role in the business of today. The role takes the shape of an all-in-one expert internal marketer, a motivator, a confidant in the strategy of the business, all critical content attributes required to properly execute on the continual process of change management.
• Pay special attention to your customers. Special care, indeed, additional steps should be taken to ensure that all change is transparent to your customers, so much so that your customers don't even know the change is happening. It is a nightmare trying to recover from reputational risk should your service levels collapse!
• Watch your governance. Make sure you know and implement in the context of the relevant labour legislation, and make sure you have raised the risks with your board, including mitigating actions. Things DO go pear-shaped in spite of the best plans. Be totally transparent in terms of successes and failures. You want no risk comebacks in the execution of change as some of those could result in you having to close your business!

Of all the communication required in change management, one of the toughest messages to communicate concerns divestiture, even though jobs may not necessarily be lost in the process. The break of friendships and break in the sense of community is quite tough to experience. Again, this is why it's so important to make sure the burning platform is properly and extensively communicated. However, by far the toughest change to drive are lay-offs. Nothing can prepare you for that deep, personal pain. The lesson again though, is to ensure that the affected people are absolutely clear on what the burning platform is, and to manage your team with all the dignity you can muster. Going the extra mile looking for replacement jobs on their behalf is a must do! Amazingly, the affected team can and do thank you for this effort, all through all their own pain. These are unforgettable moments.