The science of change management
Credit to Author: REYNALDO C. LUGTU, JR.| Date: Thu, 02 May 2019 16:18:18 +0000
Change has never been as fast and as pronounced as it is now. Organizations are struggling to figure out what, when and how to digitally transform to innovate products and business models, and better engage with customers. The 4th Industrial Revolution technologies, such as cloud, artificial intelligence and modern business applications are sweeping across industries and organization.
In fact, we observed in our consulting work more than half of the projects in medium to large companies in the countries involved the acquisition and implementation of new technologies, such as a new human capital management system or a new customer relationship management system. Corollarily, more than half of the outcomes expected by project proponents involved behaviour change among employees, such as technology adoption, employee engagement or increase in productivity.
The challenge is that, apart from the rapidity of technology change, today’s workplace has never witnessed a most diverse workforce until now. It’s only this time when we see convergence of four generations in the workplace – Generation Z, Millennials, Generation X, and Baby Boomers – all having differences in how they learn, adopt technology and respond to change.
As an example, many technology projects are considered a failure by senior executives due to the spike in the adoption by Generation Z and the younger Millennial employees, Because they are digital natives, they become engaged and active in using such technologies in the first few weeks, but are also quick to discard and stop usage. Adoption tapers off to 10 percent after a few months, and lasts several months to years until Generation X and Baby Boomer, with their slow cognitive pace, start to fully adopt the new technology.
The root cause of this is the traditional approach to change management, which is usually led by a project manager from the company’s technology group, who conducts the functional features training of the target users. Then human resource professionals engage in an occasional follow up communication to employees to remind them of using the new technology. We have seen this one-size-fits-all approach fail time and again, because it does not change the behavior of employees, more so multigenerational ones.
Thus, there’s a need for a methodical approach that changes the behavior of employees in an optimal period of time, by considering nuances in generational behaviors and cognitive styles.
Two new concepts emerge as the bases of behavior change. One is from the book ‘The Power of Habit’ by Charles Duhigg, and another from the book ‘Nudge’ by Thaler and Sunstein.
Duhigg posited that for a new behavior in a person to become a habit, there has to be some cues that remind and urge the person to display the required behavior. This new behavior is then reinforced through rewards, which in turn becomes input to the repeated cues that further reinforce the new behavior. This cycle forms a habit loop that when repeated in a methodical way, reinforces the new habit into a sustained behavior.
On the other hand, Thaler and Sunstein postulated that people have two systems of thinking. One is automatic system which requires minimal or no external intervention such as automatically smiling upon seeing a puppy. The other is reflective system which requires some external intervention or cues, such as deciding where to go on trips.
When faced with changes in the workplace, Generation Z and Millennials display automatic system thinking by saying “This is too easy”, “I’ll try this new system” and “I’ll try the other tools available”. In contrast, Generation X and Baby Boomers exhibit automatic system thinking by saying “This is difficult to learn”, “The old system is better”, “I’m getting used to this new tool” and “It’s not that difficult after some time”.
These show how different the generations are in the way they think and respond when faced with organization changes, which are manifested by the display of old habits. But regardless of generations, everyone is capable of reflective system thinking and learn from it through external interventions we call cues, in the forms of coaching, feedback and other communication media.
These two powerful concepts from part of our new approach in changing behaviors in particular, and change management in general. Therefore, to change behavior in the workplace, we need two components of interventions – cues and rewards.
To effect cues when implementing change management, we employ three approaches, namely:
High velocity observation, feedback and coaching. Taken from agile method, this involves an internal or external consultant observing the on-the-job performance of the employee who is the target of the behavior change, taking notes of the behavior during observation, then giving feedback and coaching to praise desired behavior and adjust undesired behavior.
Team learning. This involves a facilitator convening the target employees in an informal setting, asking them how the change program is coming through, what went well and what learnings they can share. This approach facilitates reflective thinking, as well as praising good behavior in a group to reinforce the right behavior.
Employee communication and engagement. This is a supplemental approach to the foregoing two approaches. It involves providing regular cues in the forms of communications from the superior or HR, providing tips on how to use a new system or reminding employees of a deadline. This can be done most effectively with the use of digital employee engagement platforms that allow employees to receive communication from others and engage with colleagues.
With these approaches, when done repeatedly and methodically, the desired behavior among employees will be achieved in an optimal period of time. This then necessitates using rewards and recognition approaches to reinforce the desired new behavior.
Rewards system can be implemented digitally, such as the use of electronic badges when finishing an online training, or in a traditional way, like giving tokens during a townhall meeting. Recognition, on the other hand, can be given copiously during the high velocity observation and team learning sessions, for observed desired behavior, which completes the habit loop of reinforcing the new behavior.
We have employed this new method of change management for companies implementing a new system. In one instance, we saw an improvement of technology adoption rates by more than 50 percent in a shorter span of time, resulting in faster payback period for the technology investment.
Organization can now approach change management in a methodical way.
The author is President & CEO of Hungry Workhorse Consulting, a digital and culture transformation firm. He is the Chairman of the Information and Communications Technology Committee of the Financial Executives Institute of the Philippines. He teaches strategic management in the MBA Program of De La Salle University. The author may be emailed at rey.lugtu@hungryworkhorse.com
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