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The broking industry (like others in financial services) is entering a phase of unprecedented change and upheaval requiring participants to either adapt or die. Iain Hopkins gets some pointers from experts on how to managing change effectively.

Di Worrall, author of A Climate for Change, and principal of Worrall & Associates, believes there are interesting parallels to be drawn from change on a much larger scale: global warming. Worrall notes that climate change and global warming is the number one example of change that everyone knows about.

She believes it provides some important lessons that can address everything that does and doesn’t work about change.

“As an example, the first area where we fall over is in the mindset of leaders who are leading change – they are not quickly enough adopting the new paradigm of sustainable leader that’s going to work in this day and age. The second stumbling block is in the systems we use. We’re caught up using Industrial Age systems that have been out of date for at least 30 years. We’re struggling with what makes for a sustainable business system,” she explains.

The third area, which Worrall maintains is where most of the change will come from, is what’s going on around us. For example, the major issue of environmental sustainability, which in turn leads to significant cultural issues like the expectations of the world now in the way businesses are run.

“What’s going to sustain our businesses in the future? We need to look carefully at things like accountability, about trust, about the environment around us and how we make our relationships and our environment and our businesses more sustainable,” she says.

“These are massive areas with one common link, and that is we need a new model of sustainability if our change programs are going to work.”

Sustainable change

Dr Tim Baker, managing director of local consultancy WINNERS-AT-WORK and author of The 8 Values of Highly Productive Companies, says it is tantalising for new managers to look for instant gratification or point scoring. He adds that managers need to be “hard on the change and soft on the people”. This means that they must demonstrate long term, unwavering commitment to the change process but empathise with their staff in the adaptation needed for the change. “Unfortunately it’s often the other way round,” he says. “That is, managers are soft on the change and hard on the people. This means that they can be flimsy on the change project and too tough on people not committing to the process.”

Leadership expert, Dave Ulrich, say that in order to achieve sustainable change it is useful to separate events from patterns.

“Change is too often an event, not a pattern. People go on diets, but don’t change lifestyle. Changing patterns requires stable and sustainable actions that are woven into daily actions of employees and organisational practices – for example, staffing, compensation, communication, training. Sustainability comes when there are new routines in the company,” he says.

From controller to enabler

Worrall advocates a new model of sustainable leadership that moves away from the need to control everything. “We’ve always been told the leader is the one who is supposed to have the vision and who will control processes and handle the tough decisions. It’s very much a top-down bureaucratic approach,” she says.

The new model involves a paradigm shift from the controller to enabler. If a leader is not controlling, what does he/she do? They enable things to happen, and they tap into the creativity of the workforce. They also remove obstacles. “By removing obstacles you allow counter-intuitive change to start to take hold within the people. A key to sustainable change is that it sustains itself,” says Worrall.

Businesses that adopt these new ‘enabler’ leadership models are shifting from the need of the leader to have to have the vision to something that’s actually shared and, according to Worrall, deconstructing the hierarchical structures to allow the creativity, innovation and ideas from within the company to emerge.

Manager as coach or enabler asks employees: what is your vision, what is your answer to the problem and, possibly the biggest shock, asks whether the employee can actually manage themselves? Can they set their own targets?

Indeed, many change programs fail because they are so dependent on the leader – to the point where if the leader takes a leave of absence the whole program comes crashing down. Why? They have tried to control it, rather than spending the time upfront to give people the opportunity to connect with it themselves, and find their own meaning and importance.

Leaders without followers
Organisations often revert to old habits because employees do not understand why change is needed, or they lack the tools and training required to sustain the new approach. Leaders may be effective at identifying what is wrong and how to fix it but less effective at the ‘soft side’ of change management – that is, capturing people intellectually as well as emotionally.

“When people know the ‘why’ they accept the ‘what’ and ‘how’,” says Ulrich.
“However, many leaders focus on what to do and how to do it, not why to do it. The ‘why’ or rationale for a change requires both cognitive and emotive cases for change. The intellectual comes from data and showing what is wrong or could be better. The emotive agenda comes from capturing feelings through experiences or stories.”  

Dr Baker adds that managing change is as much about managing the emotional stages of change as it is about the change process itself. Leaders must acknowledge and appreciate that their staff go through four emotional stages of change – denial, resistance, exploration and commitment. Therefore, leaders must design their change management around these four emotions. “One of the challenges for managers is that they do not readily recognise and empathise with their staff and put in strategies to help employees move through these four emotional survival instincts,” he says.

Vision and values
Worrall notes that a significant error of judgment made by many leaders is to assume that everyone is somehow aligned to their vision and values. They aren’t – the only vision and values they are aligned to will be their own.

“Everybody has the capacity to have a vision. Industrial age structures told us that there were only a few people specially ordained to have vision. It’s not true. If we go the counter intuitive 21st century way of thinking, if I’m actually doing something that’s aligned to my personal vision, I’m 100% into it. All those lovely things we want from change, like discretionary effort and the cultural volunteerism, actually happen if what I do every day is aligned with what I actually want to be doing – however I define that,” she says.

“Step number one, in terms of the leader trying to get everyone heading in the same direction, is to step back and say, ‘here are the facts and figures, here’s where we’d like to go, where do you sit with that and is it something you can connect with?’ Together you develop a common vision. Creating the opportunity to get that buy-in process is the first step in any change program. Let people connect with the change on their own terms,” she adds.

Tips for better change
Many change programs also fail because ownership of the change program rests with an external team of consultants (or business coach), rather than the leaders responsible for running the business. Consultants are effective when they are not in front of the change, but behind the change, coaching and advising leaders to make the changes happen.”

Ulrich has identified three levers of change: information, behaviour, and reinforcement. 

• Information: surround people with information about the rational for the change from legitimate and credible sources.
• Behaviour: get people to behave as if they are committed to the change in a public way.
• Reinforcement: when people make the changes, reward them publicly for what they have done. 

Open communication is crucial. Basic psychology reveals that people comprehend information in different ways. Some people like facts and figures; some like stories; others prefer the person speaking to them to really know their subject; someone else likes to know the other person cares about them. Some people need to blurt out their opinion without thinking about it, other people need to digest the information and perhaps share their opinion anonymously later on.

“These are basics that if you construct every piece of communication this way when you’re trying to communicate to large numbers, then you’ll hit most of your population – or at least most of the population will have the opportunity to connect with the information in the way they know and can hear,” says Worrall.

At the same time, leaders must accept that there will always be people who will never be onboard. The role of a leader or change agent is to decide early on who’s in their environment. Worrall suggests doing a stakeholder analysis test: who’s with you; who’s not, who’s on the fence. She goes further – who are the people who are really well connected, who are the people that people listen to, and who’s likely to be a saboteur.

“As a leader, it’s getting back to removing obstacles. A naysayer might just snipe – that could be because you’ve annoyed them somehow. That’s repairable. But active saboteurs can cause actual or potential damage to programs, processes, or releasing information that shouldn’t be released. You don’t need that,” she says.

How have you handled change? Ross Miller, general manager, human resources, St.George
Change point: Westpac/St.George merger

“One of the keys has been good communication through the business. The St.George communications team is part of my unit and we ensure our communications are consistent right across the Westpac group and within St.George. We provide employees with good up-to-date information about what’s impacting them. Another important thing is, for a large number of employees at St.George, we wanted business as usual during the merger. We gave them the confidence to be able to talk to their customers but at the same time not get distracted by the merger.”