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April 2008
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May 2008

Key to Change Management

"When you through changing … you’re through”

Wise words, and applicable to both people and organisations. Change is continuous and the challenge of modern life isn’t change itself but the pace of change. Managing change has always been a key activity for any organisation aiming to grow and prosper, yet it is only in the last couple of decades that the term 'change management' has come into general use and become the focus of management and forward thinking leaders.

Perhaps this is the result of the growing awareness of the fact that organisational change is dependent on people and the dawning realisation that the statement, “People who wait for changes to occur on the outside before they commit to making changes on the inside will never make any changes at all,” is just as applicable to organisational change as it is to personal change. In other words, to drive effective organisational change, management has to make the people want to change.

Follow this logic through to its ultimate conclusion and it is self-evident that the fortunes of the organisation and the people working in it are inextricably linked. Yet somehow this natural alliance has been eroded, as statistics of employee engagement hovering around 20% or less clearly indicate. No organisation can possibly be effective with such levels of disengagement.

It is therefore equally clear that organisations looking to compete in the 21st Century have to regenerate this natural strategic alignment between organisational objectives and personal ones. In order to both ensure proper change management and secure the people they need to win the ‘War of Talent’, business is going to have to change the way it manages people. Awareness and recognition of this fact is the driving force behind the whole movement for improved Human Capital Management.   

What has yet to be recognised, however, is the fact that management, people management and change management are simply interchangeable terms for the same thing. The longer management takes to recognise this fact, the deeper the trough of economic inefficiency is likely to be and the harder the journey will be. This is the ultimate distillation of Gary Hamel’s call for greater ‘management innovation’ and the Zealise proposition meets the challenge in spades. It provides the mechanism to:
• Build the required Strategic Alignment;
• Optimise People Management; and
• Effectively measure People Management.
But most of all it provides the catalyst for effective change management.

The Greatest Thing in the World

What would you say that was?

In the 16th century Michel de Montaigne wrote that “The greatest thing in the world is to know how to be yourself.” That is as efficient a summary of what matters in life as any, and perhaps a good pointer to what is wrong in the business world today. 

It would be interesting to conduct a poll of how well most people know themselves, but if the hopefuls auditioning for X Factor or Pop Idol and the like are anything to go by there are vast hordes who have no concept of themselves or the boundaries of their talents. The discrepancy between capability and aspiration is sometimes so vast one has to question whether people are totally delusional or have simply moved beyond “the lives of quiet desperation” that Thoreau described to the point they see themselves as prisoners in their own lives, and so are prepared to do anything to win the lottery that will deliver fame and fortune and hence ‘escape.’

Perhaps the disengaged employees of the modern workforce are a symptom of this. Why, when we in the western world live lives of greater prosperity than any generation in history, are we so dissatisfied? Maybe it is because in this whole struggle to get work-life balance we fail to recognise the vital and integral part work plays in our lives. Consequently we accept the need to spend the greater part of our lives at work, but only in order to earn enough to do what we really want to do. So we end up with a sort of schizophrenia, spending all our time at work wishing we were elsewhere, living another totally different life.    

The more I reflect on these issues the more respect I develop for Alex Kjerulf and his efforts to create happiness in the workplace. He is certainly attempting to solve a very real problem. However, this is a two way process, requiring both individual and organisational change. Nothing will happen if each waits for the other to take the initiative.

One way to break this stalemate is perhaps to ask what is the single most important change required in the workplace to make you feel better about going to work and what you do. From personal experience I think one of the greatest deficiencies in the modern workplace is the lack of appreciation. All too often we adopt an attitude of, 'That’s their job; they are paid to do it' and consequently we take them for granted, forgetting that “Appreciation can make a day, even change a life. Your willingness to put it into words is all that is necessary.”  Thus my own submission for what might be the greatest thing in the world is quite simply the words, “Thank you!”

What do you think it is? If we collate all answers, even if not enough to answer the question what is the greatest thing in the world, it may be enough to at least make a difference! 

Can't get no satisfaction?

“A job for life” - a “consummation devoutly to be wished” or the next closest thing to hell on earth? I guess the answer to that would depend on your culture, your personality and your experience – and not least your position at the time the question was posed. 

The fact is that, even if it really ever existed anywhere outside of Japan, globalisation and increasing competition have made the concept of a job for life, an anachronism: so much so that the very idea now seems laughable. In a world of incessant change where loyalty (on either side) has been sacrificed at the altar of self-interest, the concept is incongruous.

Regardless of any culpability for this, one significant outcome has been the increase in the number of people choosing to become self-employed and offering their services on a contractual basis. But how long can this trend continue? Forces that will pull the pendulum in the other direction are:
•    Downward pressure on incomes as the competition increases – especially if there is a downturn in the economy
•    The difficulty of providing a superior customer experience with external resources.

This latter point is the one likely to have the greatest influence, because it is compelling management to rethink the way it regards its workforce. There is no way, particularly in an increasingly competitive market, that they can claim people are their most important asset while giving lie to this by depending on external resources.

Of course this does not mean reverting back to jobs for life, but it does mean doing more to hold on to people. The war for talent and the costs associated with employee turnover make this inevitable. Yet, as Einstein said, “You cannot solve a problem from the same level of consciousness that created it.” Clearly, a new approach is needed.

For me this begins with looking beyond the concept of ‘jobs.’ For too long we have defined people by their jobs and the competencies required to fit the job description. This belittles people and is ultimately demeaning. It is no wonder that lack of employee engagement is such a challenge. Such thinking inevitably either stimulates staff turnover, or results in uncompetitive performance detrimental to individual and organisation alike. In such an environment no manager would dream of offering a job for life while, equally, no self-respecting person would look to accept one.

Yet this tendency for human churn does not appear to be satisfying either side. There is no doubt that businesses would be better off if they could keep their people longer, while more recognition would unquestionably encourage people to stick around. I recently came across someone who turned down a new job offering a 15% increase in earnings, despite the opportunity it provided to get out of one of the worst working environments I have ever encountered. Why? There is no doubt the increased earnings would have made a huge difference to his standard of living and there were certainly things about his work that he disliked, but he felt challenged where he was and considered that he was making a difference, which would ultimately offer greater rewards in the longer-term.

It is a choice that I am sure most people would make in that situation. The known, with its apparent potential will nearly always outweigh the unknown when the individual feels satisfied with what they are doing and is being recognised for their effort. The key is satisfaction: satisfaction is essential for longevity – in any situation.

So the challenge is to stimulate satisfaction. And, you will hardly be surprised to learn, that I am convinced that a move towards accounting for people as assets offers the best way of spreading satisfaction. It will immediately engender a new attitude that, rather than focusing just on the immediately required competencies, looks at the total person and enables us to break this vicious cycle. Both individual and company will be better off – without either ever being shackled by the concept of jobs for life. Who says we “can’t get no satisfaction”?   

People Assets - So What?

It started so well. There I was, explaining the thinking behind Human Assets and the Chief Executive I was talking to was not only agreeing with me, but informed me that everything I was telling him was “all motherhood and apple-pie.” Boy, I was excited! Here was someone who understood – who really understood and so would not need much convincing.

Unfortunately, I was wrong; even for the converted the proposition seems to be hard to follow and the benefits unclear. So let me take a few minutes here to explain the benefits and why it is vital for management to embrace the concept.

Before a business buys any equipment, whether a machine to improve production or a computer to improve service, it assesses its requirements. It identifies what is available in the marketplace and evaluates the best option according to the relationship between cost and benefits in each instance. The ongoing nature of the contribution that such equipment will make to the business and hence the long-term implications of the decision ensure that care is taken to make the best decision possible. Furthermore, the importance of this relationship is underlined, once the decision is made, by recording the equipment as an asset in the books. 

But it does not end there: a business investing in a new multi-million pound computer, for example, does not just install the computer in the computer centre and leave it there. It continually enhances the computer’s capabilities, by:
•    Developing or acquiring new applications software, or upgrading existing programs.
•    Acquiring new components to increase its performance capability.
Management is able to do this because it effectively continues to validate the original cost-benefit analysis, and hence the investment decision, by measuring the ‘return’ that the asset delivers i.e. the contribution it makes.

There is however, no equivalent for measuring people performance.

It is all very well to say that talking about people as assets is motherhood, but the fact is from time immemorial they have generally been easily replaceable and thus treated as consumables rather than as assets. For this reason, they have never been accounted for as assets. Consequently the statement that people are assets has profound implications for the management of a business and the way in which people need to be accounted for.

The duration of the relationship between a company and its employee is just as long as the relationship between the company and its fixed assets, and potentially even longer. Yet nothing like the same care is given to the ‘buying decision’ and even less to the ongoing investment to maintain or enhance the relationship. Yet, if people are the assets that they are increasingly recognised as being, this has to change.

Even more important, management needs to be able to assess its own performance in overseeing this vital asset. If, as increasingly recognised, it is people that give a company its competitive advantage, management can no longer afford to operate in a vacuum with regard to the way it manages them and it is absolutely imperative to find a way to measure their contribution in the same way as for any other asset.

This is the solution that Zealise offers! It provides an empirical, structured and consistent platform for valuing people assets, and the tool for management to measure people performance and – equally important – their own effectiveness in overseeing them.