Unlocking the X Factor to deliver organisational change

The 2015 CIPD Learning and Development Survey[i] found that a top priority for leadership development was to equip leaders to drive culture change in organisations. Since the survey was published this has become an even more pressing issue as digitalisation takes hold.


Changes still fail to deliver anticipated benefits

Much money has been spent over the years in training leaders to deliver organisational change. Yet delivering, sustaining and embedding change in our organisations can often feel like chasing after the proverbial pot of gold at the end of the rainbow. According to the authors of another survey conducted by the CIPD in 2015[ii]: ‘Change remains a constant for senior executives in organisations. Furthermore the complexities and difficulties of delivering change are well established, with failure rates frequently cited as high as 70%. These difficulties are compounded in cases in which senior executives wish to deliver new strategies to retain and regain competitiveness that require a transformation of their organization. Transformation involves large scale change affecting behaviours and more fundamentally the culture of the organization.’

This statement is akin to a belief in the ‘triumph of hope over experience’. Although we believe this is a far too pessimistic view of change management within organisations we cannot ignore that many transformational change projects simply do not deliver. Why is this? Recent reports suggest that fault lies in the design, techniques and management of the change. Commentators often remind us that change management is not a tick box exercise but rather an exercise in communication. Whilst communication and engagement are critical ingredients for effective change management a reliance on communications alone cannot be the full story.

How we go about deciding whether to embrace change is the X FACTOR that will determine the outcome

At the heart of transformational change sits a tangle of individual decisions. Whether each person decides to back a proposed change will determine its outcome. How we each go about making those decisions becomes the X FACTOR, or hidden risk, that will ultimately determine the fate of our proposed changes. However entertaining and engaging our communications activities are we cannot make people decide to change. These decisions are very personal and research has shown that a number of unconscious thinking errors creep in at this point and distort our decisions.

Here are three important lessons from this research:

  1. What is already in people’s mind will determine how they judge a situation and how they judge a situation will ultimately determine the actions they take;
  2. Much of our decision making takes place in what Daniel Kahneman[iii] calls SYSTEM 1 mode – fast, spontaneous, intuitive;
  3. The more we operate in SYSTEM 1 mode the more likely unconscious thinking errors will distort our decisions.

The X FACTOR, or hidden risk, in delivering organisational change is therefore for change leaders to understand how people make choices and to tailor interventions around what is already in a person’s mind. But how do we know what is in a person’s mind?

Using this research into unconscious thinking errors is the key to engaging people

The key to unlocking this is through tapping into the extensive research on unconscious thinking errors. Understanding how our decisions are distorted enables us to take actions to mitigate these distortions. The scary news is that scientists have identified over 150 of this unconscious thinking errors that can derail effective decision-making. It casts an important light on why making the case for change in purely rational terms often does not work.

Understanding the X FACTOR

The Mightywaters Hidden R-I-S-K™ framework has synthesised this body of research on unconscious thinking errors and has embodied major thinking errors into eight easily remembered characters[iv]. Three of these characters are particularly relevant when it comes to leading change and they help us to understand what’s already in a person’s mind.


Character: The Gambler

The Gambler in us does not understand the odds. When leaders initiate change they often have unrealistic expectations of what can be achieved. This is particularly true when personal reputations are staked on the outcome of a change initiative. The Gambler in us accentuates the positives and fails to assess correctly the downsides of a choice. In a change context leaders often fall foul of three facets of the Gambler that others in the organisation can see:

  1. Leaders think that change can be achieved more quickly than is realistically and reasonably possible;
  2. Leaders overestimate the benefits to the business that will accrue through change;
  3. Leaders underestimate the cost to the business in terms of outlay and disruption

In our work we often come across these deceptions. What’s already in people’s heads is a more accurate understanding of what it will take to deliver change. Their reluctance isn’t necessarily an objection to change. It’s a disbelief in the deal being proposed.

Character: The Knight

The Knight in us embodies our powerful emotional reactions to loss of something we are attached to. People are not afraid of change per se. Human beings are, after all, extremely adaptive. However people are afraid of loss. The Knight’s response to loss can take many forms of defence. The three most common are:

  1. Holding on to what we have even when the alternative may be as or more appealing;
  2. Increasing our investment in what we are attached to;
  3. Attacking the perceived threat.

The mistake often made is to see the work of the Knight in terms of resistance to change rather than in terms of aversion to loss. There are good change models available that help us understand the stages of the change process but few of them talk much about alleviating the fear of loss that a change can create.[v] The next time you are considering any kind of change, take some time to put yourself in the shoes of the people involved in the change. Imagine what they may think they will lose – and ask them. You need to find out where the fear comes from and help them to differentiate what they are actually losing from perceived loss.

Character: The Archivist

What has gone before will determine how people will evaluate future initiatives irrespective how wonderful the current proposals are. This is the work of a cluster of decision-making errors we have embodied in the character of the Archivist. The Archivist leads us to understand a situation through the lens of past experience. The Archivist in us assumes that just because a current situation looks similar to something experienced in the past, the outcome will be also similar. Because of The Archivist at work in us, it is simply unrealistic to assume that people will cooperate unreservedly with a new change initiative if they have experienced a series of botched change initiatives in the past (even if with a different employer).

Discussing openly their experience of past change initiatives will help people to deal with past experiences and understand what is and could be different this time around. A challenge for leaders is that this means a more inclusive approach to change to gives space to employees to engage with and shape how change is done.


Dealing with these hidden risks is the X FACTOR leaders must develop. To effect sustainable change leaders must look beyond simply running communication and engagement sessions and do two things:

  1. Understand that the willingness of people to embrace change is a decision point that can be distorted by unconscious thinking errors;
  2. Take actions that mitigate these unconscious thinking errors.

The Hidden R-I-S-K™ framework equips leaders to do both of these things and unlock the X Factor that will deliver sustainable organisational change.

 

For more information about the Hidden R-I-S-K™ framework:

Click here to view a 150sec animation about the Hidden R-I-S-K™ framework

Click here to download a 1-page infographic explaining the eight characters in the Hidden R-I-S-K™ framework

Click here to buy the book Risky Business which unpacks the Hidden R-I-S-K™ framework

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[i] Chartered Institute of Personnel and Development (CIPD): Learning and Development Annual Survey Report 2015
[ii] CIPD, (2015): Landing Transformational Change: Closing the gap between theory and practice
[iii] Nobel Laureate Daniel Kahneman sets out his research on System 1 and 2 thinking in his book Thinking, Fast and Slow, Penguin Group 2011
[iv] The Hidden R-I-S-K™ framework is unpacked in the book Risky Business: Unlocking Unconscious Bias in Decisions written by Anna Withers and Mark Withers, 2016 Libri Publishing Oxford
[v] We are big fans of the work of William Bridges who sees the psychological journey we go through in response to change as transition and the process of transition starting with an understanding of Endings (loss).