3 Levels of Change
Sometimes the most basic of questions can be the hardest. But in this case that doesn’t need to be true.
As a former leader of McKinsey’s organizational change practice, and now as a COO, “how to manage change” remains one of the most frequently asked questions. And, of course, hundreds of books and articles have been written on the subject.
Drawing on 30+ years of experience I’d like to offer a powerful and enduring way to frame your thinking and actions as a leader of change, drawing on some of the best thinking out there.
Note: These perspectives apply to “Behavior-dependent” change – where success requires lots of people to do things differently. (See “What mistake has create more ex-CEO’s?” for further discussion of this distinction.)
Answering the “how to” question starts with being clear on the scope of the change you are leading – individual, team, or larger organization (multiple teams, divisions, enterprise, etc.)
1. Individual change? Ultimately, all behavior-dependent change comes down to individuals so let’s start here. The obvious challenge is “what’s in it for me?” But let’s go a few steps deeper. If someone isn’t immediately onboard you will need to be clear is this “resistance” (i.e., do not like or understand the requirement?) or “reluctance” (looking for more information, or key questions answered.) So first tip, do not always assume resistance – probe further.
The best starting point for addressing individual change is the “change formula” – first conceived by Professor Mike Beer at Harvard Business School. The formula simply states that the probability of successful change increases when the collective impact of the below four levers exceeds the cost of change.
1-Dissatisfaction (with status quo) X 2- Vision (of future) X 3- Practical Steps (to begin the journey X 4- Support (resources, training, incentives) > Cost of Change (perceived risk, losses, etc.)
Simple, memorable – works in both the workplace and at home (with that rebellious adolescent.)
2. Team development? How do you get struggling teams moving and performing at a new and higher level? The classic definition of the challenge is the “forming, storming, norming, performing” framework by Bruce Tuckman. All teams will go through this cycle – and our jobs as leader is to coach them through the process.
The best way of thinking about team development comes from the “Wisdom of Teams” book by my old colleagues Jon Katzenbach and Doug Smith. They identified five characteristics of “real teams:” Common Performance Goal; Mutual Accountability; Complementary skills; Agreed working approach; and Shared and rotating leadership.
Whenever teams are stuck or underperforming look to these five areas for ways to unblock their progress.
3. Organization-wide transformation? How do you scale your efforts to hundreds or thousands of people? For this, turn to the “Transformational Triangle –first published by me and McKinsey colleagues in 1991 for guidance on leading and architecting large scale change efforts.
The transformational triangle gives guidance on the need to simultaneously work on three axes: Top-down (direction-setting and culture-shaping); Bottom-up (team-based performance improvement and problem-solving) and Cross-functional (redesigning core business processes.)
At some level this concept is blindly obvious – but if you work each axes rigorously with your leadership team you will have a much more robust effort.
And, by the way, this architecture also supports the development of agile organization. Agile teams are the “bottom-up/team-based” part of the framework. To be effective, they need the top-down direction (i.e., chartering and focusing the teams) and the cross-functional (making sure the teams are working across functional boundaries.)
For more information on the Transformational Triangle, see "Leading Organizational Transformations" on the McKinsey website.
Successfully leading change requires clear thinking and a robust but easily understood approach. Now you have it!