"The HBR post cites several case studies illustrating why many transformations fizzle, then two examples for how to turn it around."
The cautionary tales, names removed, are listed first. Then the positive stories follow. ~ Deb
But they're not failing fast to learn. They're just failing more. It's definitely not a learning organization.
A health insurer demonstrates a repeated pattern of 3- to 5-year cycles where it launches a change program, takes awhile for managers to get behind it, and then more time to get it funded. A program gets funded for a year but then everyone loses interest, and it gets defunded and dies.
Recently they're failing faster; the three- to five-year cycle is moving to two to three years. But they're not failing fast to learn. They're just failing more. It's definitely not a learning organization.
Just about everyone in the company agrees the culture is dysfunctional:
- Some point to politics - competition between the COO and CFO blocking each other's progress.
- The CEO also had a way of questioning and stress-testing people that discouraged risk-taking => a "play it safe" mentality.
- Executives who want quick wins scope projects to be done in a year. Most change programs there needed multiple years, so by the time a program extends beyond year one, executives move onto a new initiative.
What countermeasures are there to break a tragic change cycle like this?
Adopting improvement methods such as "agile" or "lean" can change the culture so that results and trust are prized over process and contracts.
Successful efforts at health insurance companies Aetna and Blue Cross Blue Shield of Michigan offer insights:
Organizational realignment — The structure of an organization determines the incentives that drive identity, behavior, and employee understanding of roles and responsibilities and priorities, as well as a sense of ownership and accountability.
Blue Cross Blue Shield of Michigan's tried a more traditional functional management structure but then found it lost customer focus.
- It appointed leaders to run market segments with profit and loss responsibility with the focus of changing the product mix and improve profitability.
- By organizing by customer, cross-functional changes became much easier to implement, and there was a dramatic turnaround in business results.
Improvement methods — a platform for doing work nimbly and at low cost included:
- Adopting improvement methods such as "agile" or "lean" can change the culture as employees are empowered so that results and trust are prized over process and contracts.
- Tactics such as daily huddles drove immediate wins and helped entrench a culture of empowerment.
Employee engagement — Employees fundamentally want themselves and the company to be successful, so successful change agents listen to their needs and help them transition.
Aetna describes how new CEO John Rowe and the senior team "sought out employees at all levels — those who were well connected, sensitive to the company culture, and widely respected — to get their input on the strategy, design and execution of intended process changes."
Executives at Blue Cross Blue Shield of Michigan went into the field to gather input and communicate their commitment to change. Employees were trained in improvement methods ("Lean"), with every employee going through two sessions in accountability training.
Curator: Enrich your perspective on change planning, facilitating, organizing, implementing or sustaining especially when dealing with demanding deadlines and short staffing.
Contact Deb Nystrom here for an initial consultation, without obligation.