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April 6 was the date chosen for "Leading strategic change", the Refresher Programme talk by Professor Pedro Parada (PhD 03) and academic collaborator Ignasi Ferrer (Lic&MBA 92 / VV 04 / GEMBA 09).
Changes are necessary for business survival but they are fraught with difficulties and often fail to achieve their goals – mainly because people resist change and are reluctant to step outside their comfort zone.
According to Ignasi Ferrer, since 2008 we have been immersed in constant change involving a great deal of unknown territory. In this instance, many people regard change as negative, but change is positive for people who see it as a process that generates opportunities. Either way, professor Pedro Parada believes that the important thing is to remember that "everyone has different circumstances and views a single stimulus in different ways".
According to a survey by Fortune, only 20% of change processes are deemed successful. Between 66% and 80% of change initiatives fail to meet their goals (according to McKinsey only 20% did not manage to create one third of the value envisaged for the company), even though more than 95% had reasonable solutions. This shows, according Parada, that the difficulty lies not in how the strategy is formulated but in how it is implemented. "The basic elements for success are the leader’s credibility and appeal", he said.
How can this contradiction be remedied?
Professor Parada mentioned several well-known change models including the classic Kotter model, ADKAR, change acceleration, Lewin, Bridge transition model and Switch and then explained his basic seven-step model (understand, enlist, envisage, motivate, communicate, act and consolidate), five of which are based on preparing for change. "The process does not have to be linear but certain steps must be completed before carrying on. Therefore, a continuous improvement process is better than a radical change. All these models have a common denominator", added Ferrer, "they change people, not organisations".
In this respect, the vision must be stimulating, credible and inclusive (i.e. people must feel they are part of the project) and must be conveyed by formal and informal channels. Many change processes fail due to lack of communication, not only at the outset but also during the process and at the end, so it is essential to communicate and listen constantly, taking care not to rely too heavily on written communications (emails) that can be misinterpreted and fail to convey much of the information about how the message is received. "One good practice is to walk around and listen and talk to people in different areas. This will give us an insight into the origins of problems, although if resistance to change is detected and cannot be remedied, decisions must be taken", said Ferrer.
It is also important to pinpoint informal leaders who influence their surroundings: they are sometimes the best people to promote change. The speakers recommended seeking out such leaders in companies and listening to them.
Types of change
Professor Parada explained that there are forward-looking changes (further away in time, more available resources, less obviously needed), reactive changes, and crisis changes (little time, few resources, very obviously needed). "To get people out of their comfort zone, we must create an impression of crisis and need for change", he commented, "but without going over the top to avoid making people frustrated".
"Goals should be achievable with small, short-term milestones to avoid motivation fizzling out, because one of the main causes of resistance to change is a lack of tangible results", said professor Ferrer.
"We must, however, tread carefully because the vision and how it is conveyed, and the resistance found along the way are not well-defined stages but a continuous, circular process. In any case, this process requires a great deal of energy, so we must try to make it fun and easy to assimilate. It helps maintain the impression that changes are constantly happening around the company, and this helps create a culture of change inside the company", concluded the speaker.
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