Six Reasons Business Reforms Fail

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BY FAHRI AGAYEV

BUSINESS CONSULTANT

Why do we fail in introducing obviously useful changes to our companies? How should leaders of reform act to avoid failure?

In my over than 15 years of experience as a manager, I have implemented changes, reforms, and modern management systems in different companies and observed how my colleagues tackled these challenges. I have witnessed how changes that start at high speed often skid to a halt or roll back down to the starting point after their seemingly strong initiation. Combining my personal observations with information on the implementation of reforms in big Western companies, I have identified six main reasons why companies fail in their attempts to reform.

1. Poor communication and lack of information

Top-level management is well aware of the importance of how adhering to their company’s vision, strategic goals, operational plans, and values will move their company towards its goals. But do middle-level managers and ordinary employees know about this? One of the main tasks of upper management is the effective dissemination of complete and clear information about planned changes among their staff. If employees are not given clear explanations, they are left to interpret the events themselves. And often in such situations, messages from opponents of the reform come to the forefront. All kinds of provocateurs and informal leaders lead the turmoil, spreading their understanding of changes, frightening others with possibilities of dismissals and downsizing, and interpreting the fuzzy messages from leadership in their own way.

What happens when information is not delivered in full to middle-level management and ordinary personnel? Yes, you are right. Resistance to change begins.

What is it important to understand and do here?

• The introduction of changes is primarily an information war. Supporters of reforms should correctly, accurately and effectively convey information to people.

• No change can be successful without informing and communicating with everyone involved.

• Changes ​​will be implemented by those who work directly with clients. The people expected to implement changes are ordinary personnel and middle-level management, not the top management that developed the plans. It is necessary that these employees also feel the essence and importance of the changes.

• Employees have the right to receive information about any planned reforms. The responsibility of leadership is to convey this information in a clear and precise way.

• To communicate the correct information, you must use all possible means of communication. In one of the organizations I worked with, I created an internal development academy specially for this purpose. The explanatory process included the organization of seminars, trainings, brainstorming sessions involving middle and linear management.

• It is important to involve people at all levels in the discussion of real problems. The feeling of involvement is a very strong motivator, as it makes people understand that their opinions and thoughts are valued.

• It is important not to leave any questions or doubts from personnel or middle management unanswered or unclarified.

What is it important not to do here?

• Do not try to look cool by using incomprehensible terms. Middle management over the age of 40 cannot understand abstruse buzz words like ‘KPI’ or ‘Lean Production,’ etc. Communicate with employees in a language they understand. Before each meeting with staff, ask yourself the question: What do I want to do? Stun people with my knowledge or explain my ideas to them?

2. Inability to stand against resistance

In the case of expected, but ambiguous changes in a company, the staff moves from a familiar and comfortable state to an unaccustomed one. Employees have a feeling of discomfort and on this basis, resistance to change grows. It is at this point that people begin to listen to informal leaders and local “stars” who do not want reforms.

Here are some of the ways changes can be sabotaged that I have witnessed in my practice:

• Continued success, which can generate inertia in a company.

• The absence of an objective for regular changes and improvements in the corporate culture.

• An unhealthy aura, when anyone who supports changes is called a traitor and is badgered.

• Arrogance: we led the company to today’s success, and only we know how to conduct business further.

• Fear of losing your job or authority/power as a result of reforms.

• Fear of punishment for mistakes in implementing the new system.

• Understanding your own unpreparedness/inability to meet new requirements, fear of losing your job due to the lack of necessary knowledge and skills.

• Fear of not being able to adapt to the new system.

In principle, any changes can cause anxiety and stress among people. Therefore, by helping them to understand the essence of what is happening, you can ease the feeling of anxiety, reduce the craving for resistance and provide the opportunity to not only listen but also to hear.

Can resistance affect the course of changes? Yes, it can. Moreover, it may not just affect the speed or direction of the changes, but it may actually kill them off. In every company, you will meet people who have experienced many reforms and who say, “We have already seen your reforms! Look how many people prior to you tried to remake the system, and they failed. The leadership will just overturn everything you try to do. “

What is it important to understand and do here?

• To understand that everything begins in the minds of your people –both doubts and confidence.

• Changes and reforms are not carried out only administratively.

• It is necessary to understand people`s fears, anxieties and doubts.

• It is important to identify positive and negative-minded informal leaders.

• The basic skill required to implement changes is communication. It is necessary to patiently allow people to explain their position and to strive to understand their real fears.

• After determining the main reasons for resistance, a plan of action should be drawn up and acted upon.

• Not enough knowledge and understanding? Hold seminars, trainings, personal or group meetings and consultations.

• Do people have doubts about the appropriateness of the changes? Meet with them to clarify and share your experience.

• Are people afraid of the intensity and speed of changes? Give them information about the situation of the market to explain why it is dangerous to delay. Ask staff for guidance so that they themselves realize the importance of reform.

• Are people afraid of making mistakes? Create an atmosphere of trust. Talk about your own mistakes and do not punish anyone for their mistakes.

• It is important to anticipate the hidden thoughts and fears that no one will ever voice and to provide answers to them.

3. Inability to neutralize saboteurs

In order to properly distribute one’s energy in the fight against opponents of reforms, it is necessary to know in advance which groups of people might resist, what power they have and the degree of influence they have on the team. In my experience, there are two types of influential opponents to reforms in companies:

Senior management or influential coalitions/groups. Basically, these are groups, united by principle or common interests. It is most difficult to find agreement with these groups because they already have their own vision, goals and plans, and anyone who does not fit into their established world is an enemy. Possessing formal power, they can cause quite a lot of headaches. For them, the presence of a reformer in an organization is a potential threat. Take, for example, the following case. A company has a top manager or a group of people who are corrupt and have their own financial interests. They will sabotage the creation of transparent financial statements because these may reduce their illegal incomes.

Informal leaders. Who is the informal leader of the organization? A person without any managerial positions, with a complete lack of formal power, may still have real power in an organization which can seriously impact people’s opinions on almost all issues. Having made a career from scratch and gone through all the steps of the career ladder, I have seen what a powerful influence some ‘Uncle Vasily’ may have. What forms of influence do informal leaders have in companies?

• Expressing doubts about the appropriateness of changes and the favorability of their outcome.

• Strong negative feedback towards those who join the reformers. Spreading the message: ‘whoever is with them is against us.’

• Hiding important information.

• Superficial execution of new processes.

• Demonstrating an apathetic or disparaging attitude towards the management’s words.

• Open or hidden sabotage.

• Mobbing or harassing supporters of reforms within their rank or socially isolating them.

There is an important layer in each of these groups: the old guard. These are the ones who actually built the company from scratch and whose qualities and skills were extremely important in the previous stages. With the old guard, though it may be difficult, you can find agreement, because they are mostly honest, hard workers who gave the company their best years. Each member of the old guard has a lot of stories about how they spent many a sleepless day shipping carriages, carrying on with the production. They must be respected. They must be understood. You can and need to negotiate with them. One of the main fears of the old guard, which they will never admit to, is the fear that they may not fit into the new management system due to the lack of modern knowledge or ignorance about new technology. The old guard will conspire with the first group of opponents and informal leaders, but only if they feel their jobs are endangered or do not understand the purpose of the reforms.

Both major groups of saboteurs will try to use veterans in the information war. People from the first group, because of their position within the company, will officially support the changes, but at the same time they will stir up the fears of the old guard in order to influence the mentality of the staff and reduce the speed and efficiency of innovations. What do I advise in such cases? Conduct serious educational work with the old guard, involve veterans in discussions and meetings, and bring their successes forward as a positive example for employees. At the same time, with the help of the old guard, pressure should be put on informal leaders to get in line with the changes.

4. Inconsistency of words and actions

Nothing harms transformations like when the actions of a leader disagree with his/her words. People immediately get an important message: you can talk beautifully, and make demands, but this means nothing if you fail to act or act superficially. I witnessed a situation in a large company in which a dress code was introduced. New rules were written out, their need was explained, and management held meetings with top and middle management. Everyone listened attentively and asked questions. The staff was involved. On the appointed day, everyone was dressed according to the dress code, in suits and ties. The general aura in the company changed immediately; everyone became more focused and serious; and the style of communication perceptibly changed. Of course, there were discontent employees, but their voice was not audible. However, a week later the leader appeared in the office without a tie, in a couple of days – without a suit. A week later everyone else relaxed the tie policy, and a couple of employees did not wear a tie at all. After a while everyone returned to the old way of dressing.

What is it important to do here?

• Do not forget the priceless adage: “Your actions are so loud that I cannot hear your words.”

5. Unpreparedness for long-term work

Whatever changes we talk about –whether they be technological, in business processes, in the rules of the workplace – we are in fact talking about making changes in people`s habits. And, it’s not just about making changes, it’s about replacing old habits that have been formed over years with new ones. This kind of process takes time. You must know your people, leadership, middle management; identify formal and informal leaders, conservatives, opponents, and dissenters; understand and feel people`s fears; form a vision and values ​​and bring them to your employees; change habits; fix them; and fight resistance.

I have often noticed one common feature among reformers: after achieving their first success, they relax and let themselves fall into their comfort zone, or they forget that the fears and doubts of their subordinates remain. Processes and habits are not fixed, and some remain dissatisfied that their demands were not met. As a result, after the first leap forward, the changes start to drift backwards. From this moment the recession begins. Thus, victory in the first battle turns into a defeat in the war.

What is it important to understand and do here?

• Remember that change is a long road.

• Understand that change is not just a strategy or a set of new techniques or tools, but a process that requires working with people who will implement the strategy by applying the new techniques and tools.

• Pay attention to the fact that it is most difficult to change people’s consciousness. A person (especially over the age of 50) who is used to an old procedure may have difficulties changing in a day or a week. Change takes time.

6. Lack of persistence and perseverance

Persistence in conducting reforms means not only the ability to take blows, but the willingness to explain day after day the goals and vision behind them to people of different ages, sex, and views on life, who are nevertheless united by the fear of change. It is important not to be afraid to argue with them. Find the strength to discuss the situation over and over again, letting each group of opponents present their arguments. In response, the dissatisfied and dissenters will continue to show discontent, attack both openly or slyly, and arrange provocations. Nevertheless, the reformer should not retreat.

What is it important to understand and do here?

• We need to focus on the main areas of reform. Since time and energy are very limited, they need to be spent effectively.

• It is important to avoid open confrontation. Conflict will take away energy and strength, leading you away from solving more important tasks. Three months later the same people who involved you in the original conflict will ask: what has been done?

• It is necessary to distinguish the most important task, correctly formulate primary goals, and boldly cut off secondary ones.

• It is important not to lose heart, taking one small step every day in each of the selected priority areas.

• It is important to understand that the introduction of changes is also a struggle of patience. The more patient and persistent one will win.

All the links in the chain are important

The introduction of changes in a company is a complex task that must be conducted on all fronts and in all directions. I advise treating this activity like a chain, each link of which should be sufficiently strong. Weakness in any of one of the links will lead to a common failure.

Imagine a situation where changes are planned in the company. The leadership has a vision, plans, and strong communication; their actions completely coincide with their words; they are prepared for long-term work; and they are trying to consolidate the changes in the corporate culture. However, weak communication alone can destroy all these efforts. The same rule applies to each of the above items.

No matter how beautiful the words, mottos, slogans, terms, goals and intentions of leadership, theymust remember one single rule: changeis done by the people who work for them. For this reason, the cornerstone of all change should be competent and effective work with the people that make up their company.

Fahri Agayev is a business consultant, career coach, and motivational speaker with over 15 years of managerial experience. He has authored two books on time management and sports.