I was in Florida recently, working with the senior leadership team of a service provider that competes in a cost-sensitive services industry. They face a difficult decision: Keep playing musical chairs with a handful of competitors for the same customers or make a strategic gambit to try and grow more aggressively.
There is no simple answer. The status quo is easy to maintain but its upside is small and finite. If they decide to reposition, these executives must lead their company through a seismic cultural change without sacrificing their traditionally strong service levels.
The firm is nearly flawless at what they do; their brand is highly-respected for service excellence. Consequently they have a service-oriented culture, a fixed compensation structure, and suitably constructed talent roster. On the surface, that’s good. Subsurface, not so good. In sales terminology they are an organization of expert farmers who must become skilled hunters.
Looming ahead rises a huge infrastructure investment that must be made in order to maintain their strong market position. Today’s run-rate of revenues and profits won’t cover it. They need more; and in order to get more, they must attack the market differently. My role was to help them figure out how.
Organizations that tend to operate pretty much the same way all the time work on a reflexive loop of predictable behaviors and those habits create comfort. Breaking habits is disruptive.
At the end of the day this leadership team had pretty much drawn what I believe is the right conclusion: Since change is inevitable, the time to start is right away.
In order to sell more, reps must be incented to earn more. This means the company must introduce — for the first time in its history– variable compensation. Those who sell a lot will make a lot. Their top performers will soon earn more than ever before. Those who don’t reach their goals will earn less.
This is great news for good salespeople, who love to be rewarded for bringing in the business. It is not-so-good news for clock-punchers who have chugged along trading years of loyalty for the comfort of a guaranteed salary under a structure where quotas were nice but not necessary.
This transition, I warned, requires managing two things very well: a cultural shift and change. The company recognizes the importance of both.
“Leaders don’t control change,” I said. “They guide, shape, and influence it — but don’t control it. Size and complexity impact how it’s received. This is big. You cannot over-communicate. Answer questions, squash rumors, say it loud and often. The better they understand what’s going on, the better off you’ll be.”
People don’t resist change as much as they resent being changed. And since we cannot change anyone but ourselves, what good leaders do is help others choose to change on their own.
“Your message,” I said, “is that change is inevitable but growth is optional. This is the choice you hope they make.”
A manager said, “A lot of people are going to be upset.”
“Expect it,” I replied. “Most people like predictability. Your company has always operated based on it. Now you are moving them out of their comfort zones. You must manage through both the macro change of the organization and the micro changes of each individual. People will respond to the news differently, based on their personalities, histories, personal visions and values, and perceptions.”
I then shared six reasons why resistance to change surfaces in the workplace:
- Inadequate communication. The bigger the change, the more important the communication.
- Mistrust of motives. Workers always think there’s a “hidden agenda.” Strive for transparency.
- The loss of something of value. These things can be tangible (ex., money) and/or intangible (ex., prestige).
- Anxiety about an uncertain future. The fear reflex: “What’s next that we don’t know about?”
- Disagreements over the design of change. You can’t and won’t please all the people all the time.
- Temperament of the recipient. People tend to be change-averse or change-embracing. Everyone’s different.
“By understanding the specific origin of someone’s stress,” I explained, “you can work to eliminate it.”
For many inside that company’s walls, change is long overdue and they know it. Others will soon come to realize it.
These days many of us are learning to be more resilient, and that’s a very good thing. Resilience enables people to thrive during a change, so resilience matters. So does self-assurance, having a clear vision, being flexible, being proactive, having interpersonal effectiveness, remaining socially connected, and utilizing good problem-solving skills.
Today companies know they need to change. Do it right and they will beat competitors who do not. The sooner we embrace, not fear, change, the quicker we will reap its rewards.
Great organizations are comprised of teams that adapt well. And great teams require great teammates. Be one.