Leadership

Change Management: Theory vs. the Real World

By Steve Tobak

Updated on: July 14, 2009 / 5:50 PM EDT / MoneyWatch

A McKinsey Quarterly article entitled "The irrational side of change management" really floored me. If you're a regular reader of The Corner Office blog, you know I'm big on management experience and common sense and not-so-big on management theory. Here's why. The story's hook is:

Most change programs fail, but the odds of success can be greatly improved by taking into account these counterintuitive insights about how employees interpret their environment and choose to act.

The article sites another McKinsey article "The psychology of change management," that provides four basic conditions for employee behavioral change:

a) a compelling story, because employees must see the point of the change and agree with it; b) role modeling, because they must also see the CEO and colleagues they admire behaving in the new way; c) reinforcing mechanisms, because systems, processes, and incentives must be in line with the new behavior; and d) capability building, because employees must have the skills required to make the desired changes.

As the title suggests, the article goes on to provide, at great length, nine "irrational" or "counterintuitive" elements of human nature to explain why, in spite of the above wisdom, two thirds of change programs still fail. The first two go like this:

What motivates management doesn't necessarily motivate employees.
People like to write their own story instead of simply following the one you tell them.

The other seven are similar and, to me, seem to have one thing in common: they all seem entirely rational. The only thing I find irrational is that anyone would expect employees to change their behavior when their own wants and needs haven't been taken into account and they haven't been involved directly in the process.

You know what else I think is irrational? That a management team would bet the company on a process with four basic conditions that fail to take into account that they're trying to change the behavior of individual humans who aren't likely to act like the behavioral mean or median of a study of a thousand programs.

The article concludes with this:

In the same way that the field of economics has been transformed by an understanding of uniquely human social, cognitive, and emotional biases, so too is the practice of change management in need of a transformation through an improved understanding of how humans interpret their environment and choose to act.

I couldn't agree more. Before I was an executive who sought to understand management behavior, I was a student of physics and engineering. That's where I learned that humans attempt to comprehend our environment by starting with simple models that become ever more sophisticated as we learn. Children do the same thing.

Having led several change management programs in companies big and small, here's my advice: Bet the company on intelligent and savvy senior-level executives led by one who has actually done this sort of thing once or twice in the real world, rather than on management consultants that are still figuring out that their models are gross oversimplifications of the real world and, more importantly, consider that to be irrational.