Herding Cats

Employees are our most important asset – Really?

This is a valuable read if you have not read it before. It’s titled “Human Change Management – Herding Cats” (link) by Mark Dawson and Mark Jones of PWC (I refer to them as “the Marks”). They tell an old but pertinent story – one that has been around for so long, but sadly is still as (or maybe more) pertinent today. Essentially too many companies give lip-service to this mantra but seldom back it up.  “The Marks” describe what is now an old and sad tale – while organizational change becomes the norm, most change efforts fail or under-deliver. And evidence continues to show that much of the reason is that companies simply do not place adequate effort or investment in changing hearts and minds of their people.

Organizations don’t adapt to change; their people do. Implementing the right technology infrastructure and streamlining the business processes that flow through it are essential ingredients for effective organizational change. These components are well studied, mechanized and reasonably standardized. Methodologies, measurements and best-practice guidelines are available to optimize their implementation. But the human element that needs to make use of these systems in order to supply the leadership, judgment, flexibility and innovation needed to achieve business success is the most critical ingredient – and least understood… Most companies say their most important assets are their people, but few behave as if this were true.

I share this view and this experience. In a recent project with an international company, I witnessed this in blatant fashion. While developing a new corporate culture based on a winning attitude and employee engagement, they were simultaneously “cutting heads” to reduce cost. Sitting in meetings where head-count reduction numbers were being decided, any proposals from me on an approach to cost reduction that engaged employees was dismissed outright. At the same time the notion that employees were at the center of the organization was emblazoned on the walls to the entrance of their corporate headquarters.

Research that I personally managed in the mid 1990’s mirrors a 2002 Watson Wyatt study referenced by “the Marks” in which “three-year total returns to shareholders are three times higher at companies where employees understand corporate objectives and the ways in which their jobs contribute to achieving them. In a study of change management strategies by McKinsey & Company, the 11 most successful companies gained an average of 143% of the returns they expected. In these, effective change management clicked at every level: Senior and middle managers and front-line employees were all involved, responsibilities were clear, and the reasons for the change were understood throughout the   organization. Conversely, companies that had problems at all three levels captured, on average, only 35% of the value they expected”.

But most companies don’t measure metrics such as these. It is a cancer that is invisible. But they do wonder why Employee Engagement numbers are poor and why (during economic upswings) it is difficult to attract and retain top talent.

In 1973 I read a profound book by Studs Terkel called “Working”. He is famous for the quote (amongst many others)…"Work is about a search for daily meaning as well as daily bread, for recognition as well as cash, for astonishment rather than torpor; in short, for a sort of life rather than a Monday through Friday sort of dying“. His work affected me deeply and impacted the course of my career in managing change – people change. And in 2011 things do not appear to have changed much. What do you think? Share your experiences in your company with us (confidentially if you prefer) whether you are at executive level or “simply” an “ordinary worker” as Studs Terkel put it (a term he disliked because he saw so many “ordinary” workers doing extra-ordinary things). Equally importantly, let us know what should be done differently. What should companies be doing to manage change more effectively and make employees more engaged and more satisfied with their work and more productive (which I believe go hand in hand).

Send an email to meritocm@merithr.com