The psychology of change management

9 May 2011 Sandeep Mehta

I have discussed the problem with process improvement and change management in the past.  We have seen that 90% of cost cuts obtained through organizational change are reversed within 3 years. It has been shown that senior executives are much more likely to imagine that change management projects are successful than middle managers.  I liked this 2003 McKinsey article that has a different take on the problem: The psychology of change management:

Companies can transform the attitudes and behavior of their employees by applying psychological breakthroughs that explain why people think and act as they do.

The article suggests that there are four conditions to make changes stick:

  1. A purpose to believe in: The leaders have to develop and describe a story of why the change is needed and why it is important. The story needs to be communicated to build a sense of purpose within the organization around the change. People are more likely to change their individual behaviors if they believe in the purpose (especially when change might cause some people to loose power / benefits).
  2. Reinforcement systems: We have talked about this previously.  Metrics and rewards needs to be aligned to make change stick.  However, psychological research shows that people get bored of rewards.  Rewards alone are not enough to change behavior over the long-term.  Hence, the other four conditions have to be satisfied.
  3. Skills required for change: Changes do not happen because many people do not know how to change.  We have seen research suggesting extended involvement of mentors (such as six sigma black belts) to make sure change happens and sticks.  This will only work if the organization launches a few, highly visible change programs, with a clear purpose. 
  4. Consistent role models: I have seen many change management projects fail because the senior managers did not actually change their behavior.  Their words were different from their actions.  People can easily see the difference between a real change and one in name only.  Again, we have seen research that shows that managers need to stay involved in the change for a long time to make results stick.
Overall a great article and worth reading….

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