CHAPTER 23
Change Management: Leading Through the Point of Inflection

Table represents the seven sub-playbooks.

The second component of the change management playbook gets at change management itself—after you've got your integration leadership in place.

At a high level, once those working for you have had their “What about me?” question answered, pivot to inspiring, enabling, and empowering them.

In change management A × B × C > D, in which

A: platform for change/reason for change

B: envision self in a brighter future/goals

C: call to action so they can be part of solution

D: inertia

Note the math on this. If you leave out any of the platform for change, vision, or call to action, you're left with zero chance of overcoming inertia.

Platform for Change

The platform for change is generally an external situational change or change in ambition. These get at why the changes need to be made. Note, using the merger or acquisition itself as the platform for change is a cop-out. Get at the external situational change or ambition change that led to the merger or acquisition. That's the platform for change.

The external piece is important. People respond better to being asked to change in response to a change in the world than they do to being told that something about themselves needs to change.

Picture of Success

Next, you need a picture of success in which others can envision themselves. The word is envision, not vision. No one cares about your vision. They care about how it's going to impact themselves or those they care about.

Call to Action

Give people a personal call to action so they know how to be part of the solution. It's the difference between doing things to people and doing things with people.

The combination of the platform for change, picture of success, and call to action must be strong enough to overcome inertia. They are also the raw data for your message.

Message

Once you've figured these out, pull them together into a message headline and key communication points. You and your leaders will use these over and over again to drive your message in sync to get and keep your followers engaged.

But engagement is too important and dynamic a metric to live with a binary distinction between the engaged and unengaged. Instead, think of engagement in terms of four levels: committed, contributors, watchers, and detractors.

  1. Committed: The committed are driven by the purpose, the cause, and doing good for others. They believe and will do whatever it takes to accomplish the desired results. Keep them committed with simple direct communication that touches their emotions and gets them to believe viscerally in the change you're trying to bring about together.
  2. Contributors: The contributors are good at what they do and it shows. They enjoy their work. Their output is positive and helps keep moving the ball down the field. They are important players, but not necessarily leaders. Communicate with them directly so they understand what is required of them.
  3. Watchers: The watchers are compliant and primarily driven by what is good for them and concerned about their basic needs. Compliant people aren't hurting the organization, but they are not primary drivers of change. They are doing what they are told and no more. The goal is to make them aware of what they need to do and make sure it gets done.
  4. Detractors: The detractors are disengaged and have checked out emotionally. They don't believe in the platform for change, the vision, or the call to action. They won't do what the organization needs them to do. Their complete disconnect qualifies them as detractors. If they don't immediately respond to the new messaging, move them out, quickly.

Change management is about changing balances—changing the balance of committed and detractors by changing the balance of consequences. You're not going to turn detractors into committed champions—at least you're not going to change them in one step. Instead, invest in the committed champions to get them to bring the contributors along with them and eventually start picking off the watchers.

Let's dive a little deeper into what good and less good looks like for each of these.

Direction

Empowering delegation starts with clarity around what you want done. Whether you call it objectives, desired results, or something else, this is isn't about labels. It's about people knowing what you're asking them to accomplish and the intent behind that request—what will happen next after they've completed the task.

This does not look unclear, overly vague, or changeable.

Resources

It's frightening how many people think they can subvert the laws of physics. Scope is a function of resources and time. You can't increase expectations of someone without giving them more resources or tools or more time or all three. Clarify the direction and then make sure you're giving people the resources, tools, and time they need.

Yet we keep hearing people say things like “We have to do more with less.” It won't work. You can do more with fewer people. But you have to compensate the lack of people resources with other resources. These could be operational, mechanical, or technological or other resources. But the basic equation always holds.

Bounded Authority

Strategos is the art of the general—arranging forces before the battle. Taktikos is about deploying forces in the battle. As the general, you cannot be everywhere during the battle. You can't make the tactical decisions. The analogy is clear. If you delegate direction and give people the resources and time they need, but do not give them the authority to make tactical decisions, you've given away your leverage.

“I'd love to delegate more. But I don't trust the people I would delegate to.” Whose fault is that? If you don't trust them, replace them with people you do trust. Leaders are defined by their followers. If you have bad followers. You're a bad leader.

Note this is not blanket authority. It's tactical authority to make decisions within the bounds of the general's strategic choices. When Neville Isdell was group president of Coca-Cola Europe, his strategies were crystal clear. At our meetings with him, he was always fully supportive of choices we made within those strategies. And he was equally clear about redirecting us when we tried to move outside the strategic boundaries.

Accountability

The last piece of delegating and trusting is clarifying the accountability—what you're going to measure with what standards of performance and when. Couple that with clarity around consequences—both positive and negative—and making them real, and you're off to the races.

Another way to think about this is that a big part of change management is removing barriers to change, including:

  • Unhelpful policies, procedures, or systems
  • Filling tool and resource gaps
  • Getting intractable detractors out of the way

Change Management at Albertsons

Jim Donald joined Albertsons as chief executive officer (CEO) in 2018 with a goal of fixing revenue and margin, updating technology, and taking the company public.1

To accomplish that, he'd have to make some changes.

His first priority was to get the frontline workforce—which made up 98 percent of their 275,000-strong workforce—aligned and onboard with the changes ahead.

“I learned that communicating a message consistently to the frontline solves the riddle of getting everybody moving at the same pace and in the same direction,” says Donald.

“I began doing 45-second videos, three times a week, posted on the company portal for all to see, showing me doing various things like driving a semi across the country with groceries to a store. Frying chicken at a deli. Cutting meat in a cutting room with a bunch of meat cutters around me, or simply working with the overnight crew, unloading a truck.”

The results were impressive.

“It flipped our culture. It spiked our revenue and it allowed us to go public (July 2021). Why did that happen? These videos created an environment where I spoke the language of all my employees from age 16 to 80.”

It wasn't just about keeping employees in the loop. It was about showing frontline employees they were a valued part of the business, and their work was important to the company's success.

“By doing what I've asked others to do, I spoke the second language of the frontline. That's called communicating to the heart. That causes action. It also creates engagement. When people become engaged, they are emotionally connected to the business, and things happen very fast. Revenues grow; profits improve.”

This sense of engagement was also critical to ensuring that the changes the company was going through were understood, adopted, and executed by the people on the frontlines.

“The best-laid plans don't work once they're launched if you don't have the understanding of those users that interface with the customer. It's not easy. The word change management is key here, because getting your associates at every level to understand that we're doing things differently is so critical to the success of this,” says Donald. “If it's told in a way that they're always going to remember, if it's told in a way that engages them emotionally, they'll get it, and they'll execute on it.”

Generate Early Wins

Early wins fuel team momentum and confidence. To that end, its essential to clearly identify and jump-start potential early wins early. Once they are widely understood, the team should overinvest to deliver them as soon as practical. In general, early wins are not synonymous with big wins. They are the early, sometimes small, yet meaningful wins that start the momentum of a winning team. They are the blasting caps, not the dynamite. They are the opening singles, not the grand-slam home run. They are the first successful test market, not the global expansion. They may be found by accelerating something that is already in progress instead of starting something new.

The early win prescription is relatively simple:

  1. Select one or two early wins from your milestones list:
    1. Choose early wins that will make a meaningful external impact.
    2. Select early wins that your boss will want to talk about.
    3. Pick early wins that you are sure you can deliver.
    4. Choose early wins that will model important behaviors.
    5. Pick early wins that would not have happened if the merger or acquisition had not occurred.
  2. Jump-start early wins and deliver as soon as practical:
    1. Early means early. Select them early. Communicate them early. Deliver them early.
    2. Make sure that the team understands the early wins and has bought into delivering them on time.
    3. This will give your bosses or owners the concrete results they need when someone asks how you are doing.
  3. Overinvest resources to ensure that early wins are achieved on time:
    1. Do not skimp on your early wins. Allocate resources in a manner that will ensure timely delivery. Put more resources than you think you should need against these early opportunities so that your team is certain to deliver them better and faster than anyone thought was possible.
    2. Stay alert. Adjust quickly. As the leader, stay close, stay involved in the progress of your early wins, and react immediately if they start to fall even slightly off-track or behind schedule.
  4. Celebrate and communicate early wins:
    1. As your early wins are achieved, celebrate the accomplishments with the entire team. This is important and should not be overlooked.
    2. Make sure that your early wins are communicated to the team and beyond as appropriate.

Early wins are sure to generate credibility, confidence, momentum, and excitement. Remember the watchers? The people who have not shown themselves to be detractors, yet, have also not stood up as strong contributors. Once early wins begin, some of the watchers will edge closer, and eventually will jump in as contributors. After all, everybody wants to be part of the winning team, right?

Manage Through the Dips

In her book The Change Monster: The Human Forces That Fuel or Foil Corporate Transformation, Jeanie Daniel Duck outlines five stages of change that organizations need to be prepared to manage as they embark on a change initiative. Duck refers to the change monster “as a catch-all phrase for the complex, sometimes scary, human emotions and social dynamics that usually emerge during a change effort.”2

  1. Stagnation
  2. Preparation
  3. Implementation
  4. Determination
  5. Fruition

Applying these to mergers and acquisitions:

Stagnation: Born of outdated strategy, lack of leadership, market shifts, too few products or resources, outdated technology, and so forth, this phase ends when someone in a position of power recognizes the problem, envisions a new approach, and demands change (like a merger or acquisition).

Preparation: This involves all the things we've talked about to this point from the investment case through team role sort. As we've said, expect people to be anxious, hopeful, threatened, excited, distracted, and betrayed, wondering first and foremost, “What does this mean for me.” Duck makes the point that moving forward without alignment is the major cause of failure of change initiatives. Move this stage along as quickly as possible, but make sure it is complete before proceeding.

Implementation: This is the phase you're starting now. As change plans are initiated and work is beginning, be prepared for the change monster to get things fired up. To the emotions already experienced in the preparation stage will be added feelings of confusion, apathy, resentment, inadequacy, and volatility, along with relief, exhilaration, excitement and recognition. Everything is changing, but at the same time, nothing has changed yet. Communications—frequent and sent through multiple mediums—are critical during this stage.

Determination: Expect this later, when all your efforts are becoming evident at the same time the organization may be feeling change fatigue. It takes a lot of energy for people to rethink how they do their work and change their ways. If they see signs of success, they'll be energized and keep up their momentum and contributions, even in the face of fatigue.

However, if they sense an attitude of doubt, they will switch gears, go back to watching, and dispassionately go through the change motions without expectations for the desired results.

Again, the wrath of the change monster is stirring. Leaders must be careful to manage the expectations, energy, and experiences of their employees. Not all the early wins will work. Not everything is going to be a success. Where negative events occur, acknowledge and learn from them. When employees come together to confront and conquer the change monster, they are usually rewarded with the path to fruition.

Fruition: Eventually, all the hard work will pay off. It's a time to celebrate and acknowledge the transformed organization, highlighting the big and small wins, as well as lessons learned. However, “the success of fruition brings the organization full circle, because the territory on the far side of fruition is a new period of stagnation.”

Institutionalize the changes and your new culture, base systems, and processes. And start preparing for the next step change.

Notes

  1. 1   Axonify, “‘The Turnaround King' on Why Frontline Employee Engagement Is a Business Imperative” (June 4).
  2. 2   Duck, Jeanie Daniel, 2001, The Change Monster (New York: Random House).
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