FEBRUARY 2006
LESSONS FROM DUBAI PORTS: THE IMPORTANCE OF SKILLFULLY LEADING CHANGE
By Tony Mulkern
Despite the controversy over federal approval of a United Arab Emirates company assuming responsibility for some U.S. port operations, there is widespread agreement over one thing. Communication on this issue has been a public relations disaster for the current administration.
My purpose is not to take sides on the issue here—conscientious and distinguished critics in both major parties have raised grave concerns, while a cool and reasoned defense has been stated by the editors of The Wall Street Journal among others.
There is a broader lesson to be gained, I believe, that is of value for CEOs and owners of entrepreneurial firms. Just because you and your “inner circle” are convinced that a specific change would be an extremely positive step in successfully implementing your strategy and advancing your vision, do not expect everyone to automatically fall in line behind you! Even if you have a record of making the right decisions—as the Bush administration has of being tough on national security—be prepared to have your decision questioned and for major resistance unless you carefully lead the change.
The concept of leading change is often associated with contraction, such as layoffs, plant closings, and other forms of retrenchment. But it applies just as much in the growing, successful firm undergoing positive changes.
What kind of changes are we talking about? What is it about change that requires special skills? Why do employees react to change in a way that requires special management attention?
Before addressing these questions, let’s lay aside one condescending, over-simplification promulgated by some change experts: “People dislike change and therefore resist it.” I have never seen a Power Ball Lottery winner resist his or her good fortune or anyone grow morose over a generous raise or promotion. Yet these are all represent potentially life-altering changes.
In fact, people are in general less emotional and more rational than is often supposed. They resist change which appears to threaten their well-being and welcome change which appears to enhance it. They may, however, be misinformed or have miscalculated, and that is where leadership comes in.
Another motto encouraged by some consultants that insults workers’ intelligence is that “change is good.” Well, some is and some is not. Tragedies, catastrophes, and disasters all represent change, and it is hard to see what is good about them.
If the changes you are championing for your firm truly are good, that is something which needs to be demonstrated and explained. Bromides or breezy slogans suggest employees are being treated as children and simply increase the suspicion and cynicism with which management pronouncements are often heard.
The first mistake executives and CEOs often make is not to recognize that an event they are planning will be seen as a significant change, just as those involved in approving the Dubai Ports Worldwide management deal seem to have been surprised by the ensuing furor. To busy executives, the event may appear as a normal and to be expected part of the business process and development. The following are some of the kinds of positive changes I have seen generate significant resistance in growing, client companies:
- Introduction of a new product or service
- Getting rid of an old product or service
- Creating a new level of management
- Introducing more systematic management systems, such as a compensation plan, departmental budgets, policy manuals
- Expanding the geographical market
- Moving to a new location
- Adding outsiders to the Board of Directors
- Formalizing compensation and bonus systems
- Introducing strategic planning
All of these actions are typically first met by some amount of skepticism, disagreement, and failure to conform. One common outcome is separation from the firm of those who cannot or will not part with the old way of doing things. While unfortunate, this can be less costly than the alternative: token compliance accompanied by long-term resistance.
How does a leader minimize the downside and maximize the upside of change?
- Recognize that any change, however positive, is likely to threaten somebody. You may not want to spend a great deal of time and effort on every person’s insecurity about the most minor issues, but at least you should not be taken by surprise.
- Recognize the difference between Changes and Transitions, a distinction owed to William Bridges, who has written extensively on the subject. Transitions are the emotional, psychological and cognitive states that people move through as a result of the external event or change, and not everyone moves at the same speed. Transitions include the shock, surprise, elation, fear, or hope that accompany the announcement of a change. This is typically followed by a state of great uncertainty and confusion regarding how the changes will play out. The final stage of transition, New Beginnings, requires clarity regarding roles, expectations, and a commitment to make the changes work. The more skillful the leadership, the faster the workforce moves through these stages.
- Be aware of your own progress through the stages of transition, and do not expect employees to be up with or ahead of you—or that the wisdom of your decision will be obvious. As the leader, you have had the time to process your own thoughts and feelings through these stages as you pondered and planned for the change and are probably at the stage of New Beginnings by the time you announce it.
- Explain the reason for the changes. Be candid about the costs or disadvantages as well as the advantages. Most changes will bring both.
- Give employees the chance to ask questions and to share their concerns about the changes.
- When you replace the familiar with the unfamiliar, make it clear what the expected roles and standards will be and what support you will provide for those struggling with the adjustments. Convey realistic timelines for implementation.
- Listen to employees’ opinions on how the changes are working and make appropriate adjustments.
- Take the offensive in communicating and educating, and err on the side of over-doing it. The rumor mill is the only thing in nature that seems to move faster than the speed of light! And what it produces is 50-75% fiction, accepted as reality.
Finally, play up the unchanging elements of the culture, such as its values, mission, and long-term commitments. Demonstrate how the change is consistent with these elements. If the mission or values are changing, then explain that as well and what they are being replaced by.
The alternative to skillful leading of change is to make yourself an easy target for your worst critics. Inevitably, this will mean a delay of successful implementation or even placing it in total jeopardy. And if the change was a good one to begin with, that can be a real tragedy.
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Copyright, Mulkern Associates, 2006
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