Brimeyer LLC - The Column

Leading Change During a Recession

Published February 2009

A recession provides a unique opportunity to produce cultural change within your organization to make it stronger. During good times, complacency and some bad habits have almost assuredly seeped into the organization.

As hard as it is to change people’s habits, it’s almost impossible when things are going well. A recession, with its almost certain negative impact on business results, provides leaders with an environment for leading change. Fortunately, although this would appear to be a tremendously ambiguous task, John P. Kotter does an excellent job of explaining the critical components for transforming an organization in Leading Change (Harvard Business School Press, 1996). Kotter identifies eight components to successful change efforts, paraphrased below as:

Create a compelling case for change - Change is almost never easy (even changes for the better). It almost always involves short term sacrifices, at least during the transition period. As such, the leader must provide individuals with solid reasons to endure the discomfort and sacrifices ahead. The goal is to move the organization from a state of complacency to one of vigilance.
Establish a core team of trusted allies - Upon using your head and your heart to build a case for change, it’s time to use that case to recruit a core team of trusted allies. Changing behaviors and attitudes of a large group of people is a monumental task. You are faced with a battle of the minds – one you don’t want to fight on your own.
Develop the vision and high level strategy - One of the first tasks for the core team to undertake is to create a shared vision of the future state that will help guide the multitude of decisions made daily within the organization. An effective vision statement is clear and simple, is inspiring, and allows all stakeholders (customers, employees, and shareholders) to see themselves benefitting from its attainment.
Constantly communicate the vision - Kotter argues that most change messages are under-communicated by a factor of ten times or more. As the change effort gains traction, the vision must become a component of virtually all communications by the leader and the core team. This includes both formal (company newsletters, announcements, all-employee meetings) and informal (e-mails, hallway conversations). The consistent reinforcement of the vision continues to attack complacency for the status quo.
Enable people to do the right thing - The workforce’s early adaptors have bought into the need for change and have become excited with the vision for an improved future state. What’s next? We must ensure that conditions within the organization allow them to do the right things and to be successful while doing them. This means removing barriers that discourage the right actions and ensuring people are trained for the required skills and attitudes.
Generate and recognize short term wins - Change is hard, especially in the early going. Carefully chosen projects with a high potential for success are required to reinforce that we’re doing the right things. These wins must be clearly tied to the change effort and positively impact the bottom line. The goal is to convince fence-sitters to join the effort.
Produce more gains - Following early victories, great care must be taken to avoid declaring “mission accomplished.” Instead, use the newly recruited fence-sitters to accelerate change. It’s all about maintaining, and even gaining, momentum.
Ground everything in the new culture - Even after 2-3 years of successful change, the culture can revert back if it hasn’t been ingrained into everything. Ensure that the organizational structure, policies and procedures, and criteria for hiring and promotions reflect the new desired behaviors.

The percent of organizations that successfully complete and sustain lasting organizational change is a small fraction of those that set out to do so. If your organization is successful, however, it will have truly found the silver lining in the current recession.

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Leading Change During a Recession