Lurking in the wings, if not center-stage, in almost everything we do in our work with clients–and I imagine something similar holds true in the work of many of you, invaluable readers–is the nebulous and unclear, but mostly ominous-sounding, notion of Change Management. I was at a large annual conference here in New York a few weeks ago and the CEO of one of the more prominent NewLaw companies remarked (I paraphrase) that “Change management is very to the nth power hard.” If he–the leader of what appears to be a thriving and rapidly expanding disruptive firm–believes that, then what’s a poor managing partner of a benighted old school law firm to think?
Well, at the very least you should know you’re not alone.
Indeed, one of the Greatest Hits of All Time on the often useful “strategy + business” publication is an article first published 15 years ago, and just updated, called “10 Principles of Change Management.” So, shall we? What might we learn from this?
For starters, does this sound like a fair description of recent history in Law Land?
Way back when (pick your date), senior executives in large companies had a simple goal for themselves and their organizations: stability. Shareholders [read: partners] wanted little more than predictable earnings growth. Because so many markets were either closed or undeveloped, leaders could deliver on those expectations through annual exercises that offered only modest modifications to the strategic plan. Prices stayed in check; people stayed in their jobs; life was good.
Market transparency, labor mobility, global capital flows, and instantaneous communications have blown that comfortable scenario to smithereens. In most industries — and in almost all companies, from giants on down — heightened global competition has concentrated management’s collective mind on something that, in the past, it happily avoided: change. Successful companies, as Harvard Business School professor Rosabeth Moss Kanter told s+b in 1999, develop “a culture that just keeps moving all the time.”
This presents most senior executives with an unfamiliar challenge.
As with much that goes into you and your team’s scorecard in leadership, the challenge is easy to state but devilishly difficult to succeed at:
In major transformations of large enterprises, [senior leaders] conventionally focus their attention on devising the best strategic and tactical plans. But to succeed, they also must have an intimate understanding of the human side of change management — the alignment of the company’s culture, values, people, and behaviors — to encourage the desired results. Plans themselves do not capture value; value is realized only through the sustained, collective actions of the thousands — perhaps the tens of thousands — of employees who are responsible for designing, executing, and living with the changed environment.
By way of definition, we’re not talking about mere operational course corrections or procedural refinements; we are by hypothesis addressing strategic initiatives such as redefined goals, major structural changes to practice area foci or office footprint, mergers or divestitures, material redesign of the compensation system (not because what any individual partner is paid precisely constitutes a strategic imperative but because the key elements, and their weights and mix, that determine compensation can influence behavior), and other major institutional reforms.
In other words, these are changes of large scale, depth, and duration. And you know they will fail unless individuals at every level of the firm adopt the changes and take them as their own. Here, then, are the Top 10.
1. Address the human side systematically. Jobs are going to change, new skills required and old competencies abandoned, new leaders will be appointed and some incumbents asked to stand down, and all of this creates uncertainty, doubt, and resistance. If you wait to address these reactively as they arise and case-by-case, it’s already too late; you’ve lost before you’ve begun. Instead, you need to start with the leadership team, expand it out to key stakeholders and perceived (if not formal) thought leaders within the firm.
2. Start at the top. If your firm’s leadership is shaky in its commitment to the new initiative, people will smell it a mile away. Your leaders–executive committee, office and practice group leaders, prominent rainmakers–all need to embrace it fully, speak with one voice, and behave as if they meant it. This is not a surrender of your autonomy, it’s ennobling service to a goal larger than your own ego.
3. Involve every layer. Just as it’s optimal in terms of client service, morale and professional development, efficiency, and cost-effectiveness to push legal work down to the lowest suitable level, so you need as a firm to push the change initiative down through every layer of the organization. The article offers as an example an (un-named) “multiline insurer” that started its program with 10 officers setting the strategy and vision, 60 in upper management designing the operating core of the initiative, and then 500 in the field pushing implementation. Two benefits, one economic and one for organizational strength: Profits doubled “far ahead of schedule,” and emerging leaders were identified. Who would argue with that?
4. Craft a formal case. (This part should come naturally!) Articulate the case for change:
- what about currently reality is unsustainable, sub-optimal, or even dangerous?
- show faith in the future and faith in leadership to deliver on that future for the firm;
- and tell people exactly what they need to do to get there and advance the cause of the necessary changes.
This part (we speak from experience) requires a delicate blend of sounding the alarm in order to convince people change is essential and providing reassurance and optimism about the bright future the firm has consistent with making the requisite changes. You can’t scare people to death or demoralize them by emphasizing the daunting task ahead, but you do need to instill a sense of urgency and commitment. You also want to inspire them to be a part of something new, bolder, and more vibrant.
Here’s how that can work out in the best of worlds:
By confronting reality and helping employees understand the necessity for change, leaders were able to motivate the organization to follow the new direction in the midst of the largest downsizing in the company’s history. Instead of being shell-shocked and demoralized, those who stayed felt a renewed resolve to help the enterprise advance.
5. Own it yourself. No, this is not some new-agey counsel, it’s a realistic and pragmatic recognition of the organizational truism that if leadership is seen as unwilling or reluctant to embrace a serious new initiative and live it themselves, everyone will cotton to the game and abandon it themselves.
“Owning it” for you as a leader is more than acceptance; it’s becoming a “zealot” for the change and “over-performing” during the critical transition period. Frankly, if–as happened with one of the unidentified companies the article discusses–that means the leadership team needs to go back and work through the premises behind the change in order to convince themselves how critical it is–then invest the time to do that. Unspoken reservations can be as or more powerful as articulated ones, and people have acutely sensitive antennae for hypocrisy or grudging acceptance.
6. Communicate. And communicate and communicate some more. You as a leader may feel you’ve focused so much energy on the initiative and become so immersed in it that you can’t conceive how anyone else in the firm could feel otherwise, but they will and they do. How to communicate the imperative for change and its benefits?
Basically, any way you can: Through any and all media and venues: Email, voicemails, webpage links, one-on-one’s, town halls, videos, newsletters, “swag” (yes, even cheap but tangible things can reinforce the cumulative message–custom post-it notes?). You’ll know you’re done when others throughout the firm, from top to bottom, start spontaneously paraphrasing what you’ve said.
7. Know your culture. You may think you do, but if asked to describe your firm’s culture precisely, getting past the stale and bromidic usual suspects of strong, collaborative, and collegial, what would you really say? Is it aspirational and ambitious or cautious and deliberative? Demanding and high-performance or tolerant and accommodating? Oriented towards long-term investment or short-term consumption? Above all, is it ready to change?
8. Take culture on directly. Be explicit about which of your firm’s cultural characteristics will work in support of the change initiative and which will frankly be at cross-purposes with it. Name them and discuss them; have forums for middle and junior-level people to describe how they experience the culture and how they need it to change to support and not impede the transition.
The alternatives to address your (not always helpful) firm’s culture are to pretend it’s wonderful, perfect, and will flexibly and supply accommodate any change you propose–which is almost always delusional–or simply ignoring it and assuming by force of will and reason you can ride roughshod over it. In the history of strategic planning, that has never happened.
9. Expect rude surprises. Or, to be more diplomatic about it, unexpected developments. Peopled–trust them!–will react in ways you didn’t foresee. Competitors will, well, compete. Exogenous events will continue to crop up: Lore has it that Harold Macmillan was once asked what a prime minister’s greatest fear was and he responded, “Events, dear boy, events.”
10. Never forget that it comes down to individuals.
You, and we all, know this, but too many of us don’t always live it. I can leave you in no better position to prepare for leading change at your firm than to quote the final section of this article at some length:
Change is both an institutional journey and a very personal one. People spend many hours each week at work; many think of their colleagues as a second family. Individuals (or teams of individuals) need to know how their work will change, what is expected of them during and after the change program, how they will be measured, and what success or failure will mean for them and those around them. Team leaders should be as honest and explicit as possible. People will react to what they see and hear around them, and need to be involved in the change process. Highly visible rewards, such as promotion, recognition, and bonuses, should be provided as dramatic reinforcement for embracing change. Sanction or removal of people standing in the way of change will reinforce the institution’s commitment.
Most leaders contemplating change know that people matter. It is all too tempting, however, to dwell on the plans and processes, which don’t talk back and don’t respond emotionally, rather than face up to the more difficult and more critical human issues. But mastering the “soft” side of change management needn’t be a mystery.
Time to get to it!