Leading Change
"Change is the only constant in life. One’s ability to adapt to those changes will determine your success in life." - Benjamin Franklin
Well before Benjamin Franklin walked the Earth, the ancient Greek philosopher Heraclitus observed that everything was in a state of flux. In other words, the only constant is change. We are not static, but growing, changing or declining. Businesses and organisations are constantly dealing with change – in the NDIS, Practice Standards are changed or new ones released and the price guide changes regularly. In the VET sector, the training qualification is regularly updated. In construction, the building codes have been recently updated again. Interest rates keep changing. Staff resign, and new staff commence; or businesses grow and new staff must be onboarded, inducted and trained. Workplace laws recently changed, and businesses must adapt. Our political system changes regularly; and even the change we think we are getting is not the change that is made (hello superannuation changes!)
Are you convinced that change is constant?
Despite this truth, change can be one of the most challenging things to successfully implement in an organization. In this blog, we will explore why change is difficult, how to lead change effectively, and how to overcome resistance to change. After all, As Benjamin Franklin said, the ability to adapt to change is key to success in life.
Why is change so difficult?
Change can be difficult for several reasons. Change disrupts the status quo, and humans are mostly creatures of habit. We are wired to seek comfort and stability, and change can be uncomfortable and destabilizing. Additionally, people may fear the unknown or be skeptical about the benefits of the proposed change.
Fundamentally, our brains work to adapt to change and automatise processes, to reduce energy expenditure. When we have to learn new ways of doing things, our brains move from automatic mode to active mode and create neural pathways that make it easier to repeat that behaviour. More energy is burned learning the new than maintaining the old, which can be mentally exhausting! This is why it can be difficult to sustain new habits or behaviours in the short term. However, with practice and repetition, these new pathways become stronger, and the new habit becomes easier to sustain. These neural pathways become stronger over time, becoming the new normal.
People may resist change because they perceive it as a threat to their power, status, or security. When a person’s identity is tied up in what they do, or the position they hold, anything external that is perceived as a threat to their identity will be met with resistance. This can be particularly true in organizations where there is a hierarchy or where people have invested a lot of time and effort in their current roles. They may feel that their contributions or expertise will no longer be valued, and they may fear losing their position or influence within the organization. Similarly, if someone perceives that the change may threaten their job security, they may resist the change because they fear losing their job or not being able to perform the new roles and responsibilities required by the change. The more they feel they have to lose, the more they may resist the change!
This fear can be particularly strong if the change involves new technology, new processes, or new roles that require new skills or knowledge. It can put people back in the position of being a novice, not knowing or understanding much.
Leading Change
Resistance to change is a natural response, but it can be overcome. The leader must be out in front to encourage the desired change and growth and to show the way to bring it about. To do so, they must understand two key pre-requisites to change:
Understand how things will change – i.e. know the technical aspects of the change.
Understand why things need to change – i.e. understand the attitude and motivational demands needed to bring about the change.
One note of caution – don’t lead change unless the change is necessary and beneficial.
One effective way to overcome resistance is to involve people in the change process. If staff feel safe to own and contribute to the change, the result is likely to be more robust, effective and supported. The leader can also address concerns and fears about the change directly and provide reassurance about the benefits of the change. If people understand why the change is necessary and the consequences of inaction, they are more likely to support it. The leader can provide training and support to help people adjust. Finally, the leader must model the change positively, and lead by example.
Overcoming resistance to change
To overcome this resistance, it's important to address these concerns directly and to provide reassurance that the change will not negatively impact their power, status, or security in the long term. It is important to approach change with a growth mindset and be patient with the process. Change is not always easy, but it is possible with persistence and effort.
The following are some specific strategies to respond to each area of resistance to change:
Finally, realise that constant change can lead to change fatigue, where the resources people have at their disposal to respond and adapt to change are diminished to the point of exhaustion. When you develop a change management plan, consider the timing of the change, and what other changes are happening across your organisation. Also, allow enough time for people to consider the change, discuss the changes and raise questions and concerns, then learn and implement the new. Training in the new should coincide with the implementation, so it is relevant and timely and respects the person as an adult learner.
Case Study
In a previous senior leadership role, one of the businesses in my portfolio was an Allied Health clinic that was struggling to transition into a productive and profitable service under the National Disability Insurance Scheme (NDIS) in early 2018. When I took charge of the service, staff productivity was around 20% of paid time, and gross profit was negative 3-5% month on month. Clearly, the situation had to change!
Over a three-year period, Covid shutdown included, I worked with my staff to turn the clinic around, and it became profitable, with a good reputation, and an increased client base. We tripled turnover, and gross profit ran consistently around 40% of turnover.
The process to turn this around was as follows:
Identify the need for change – this was pretty straightforward, as the figures were stark!
Qualify what needed to change – this required a little more investigation. It became evident that we had issues around the quality and consistency of the service being delivered, billing issues, and systems that limited staff productivity.
Plan for change – in a series of conversations with staff, and key influencers, I mapped out a plan with them. Priorities identified were: invest in staff training, develop internal templates and ways of working to raise the service standards, offload administration from therapists to dedicated administration staff, streamline our systems and automate as much as possible, and fix our billing system. The key motivating factor for therapy staff was that they would have less administrivia, and more time with their customers! They were freed up to make a meaningful impact on the lives of the people they worked with.
Implement change – given the changes were multifaceted and some required continuous improvement, changes were staged and done in the order of improve quality of service, reduce admininstrivia, invest in staff development, improve billing systems and processes (and shift the back end of process to administration staff), and ongoing efforts to streamline and automate processes. We also conducted some strategic marketing around 18 months in.
Review change – we went through a few rounds of improvement and adjustment in procedures, and progressively adjusted the administration load on therapy staff, recruited new administration staff and therapy staff, and trained them in the new systems.
Outcomes:
Initially, I lost three staff (around 1.8 FTE) – two therapists and one admin staff. The initial changes to improve quality and reduce administrivia for therapy staff, and setting productivity targets to work towards, meant that we moved quickly to a breakeven position.
Across the 2019 FY, quality and productivity continued to improve, and 80% of our billing issues were resolved. The second half of the 2019 FY focussed on streamlining systems and fixing the remaining 20% of billing practices with collaboration from the finance department. A lot of the issues there were technical, but solvable by improving the human element of the system, especially the communication between departments. Gross profit was in the double digits.
Within approximately 18 months of commencing the program of change, the reputation of the clinic was significantly improved, and we engaged in strategic advertising. Referrals started to flow strongly, and by the end of the 2019 calendar year, waitlists were growing rapidly. I was able to write a business case for expanding the clinic, and we ended up adding nearly 50% more therapy staff at the start of 2020…just in time for Covid to hit!
Covid shutdowns caused growth to be delayed for around 4 months; however, there was only one month in the 2020 FY that had negative gross profit, and the overall result fell only a few % short of target profit. Once we reopened, we strongly grew month on month, and never looked back.
The 2021 FY ended with strong growth, a much larger team and significantly improved turnover, and gross profit in the low 30% range. Streamlined systems meant I didn’t need to replace an administrative staff member who resigned to take a promotional role elsewhere. I was also able to justify putting on a clinical manager, who took the team from strength to strength, with gross profit running at 40% month on month on increased productivity and turnover.
Conclusion
In summary, leading change is not easy, but it is necessary for growth and progress and to adapt to new realities. By having a clear vision, involving key stakeholders, modelling the desired behaviour, and overcoming resistance, change can be successfully implemented in an organization. As the Greek philosopher Heraclitus noted, change is the only constant in life, so it is essential to embrace and lead change effectively.
Contact me if you need assistance developing a change management plan for your organisation.
David Reeson, Managing Director - Upvisory Pty Ltd
M: 0423 657 968 | E: david@upvisory.com.au