Putting People First
by Neil Farmer
"You can manage change only if you have the right people in place" Neil Farmer, co-founder of Informal Networks Limited
The reshaping of financial services and the economy brought about by the financial crisis (among other factors) has pulled the rug from under the feet of many law firms and in-house legal departments. Now that the comparatively easy years of growth and income are over, managing partners and legal heads are having to re-examine their previous management approaches, tailoring them to better fit the current climate.
Restructuring, cost cutting, redundancies, outsourcing, businesses first entering and now leaving markets around the world, the need for profound culture change, cross-selling, radical government initiatives, even the traditional partnership model are all under scrutiny. But it's important to remember that such changes provide opportunities as well as risks.
However, the current opportunities and threats have one thing in common: they all involve change and, in particular, they all impact on how people work and behave. The ways in which managing partners and legal heads deal with change in the near future will largely determine success or failure over the next decade and beyond. But, in a profession renowned for high-powered, very logical, left-brained leaders, managing people-intensive change may not come naturally be warned, the odds are against you.
A logical place to look for guidance on effective change is the combined wisdom of other business sectors that have experienced extensive change in recent decades such as financial services, government or retail.
Unfortunately, a huge shadow of failure has hung over almost all major business change programmes up until very recently. Even with mature, logical programme and project management methods, failure rates for major internal business change are still stubbornly average at about 70% when assessed against initial business objectives.
Although poor business visions, patchy programme management and genuine technological difficulties are sometimes the causes of failure, the overwhelming reasons for this failure rate are factors involving people.
In response, a small number of innovative management consultants have developed and tested new approaches to business change that have focused on the people in the business, and their informal networks of influence, communication, knowledge and innovation.
In the last decade, this has led to the use of informal personal networks as effective, practical tools for change management.
Over a period of seven years from about 2000 onwards, a small group of colleagues and I led the people side of change for five very successful major change programmes back to back at Nationwide, National Savings, Liverpool City Council, Lloyds of London and Friends Provident.
By stringing together five consecutive, successful major change programmes, we defied the 70% odds of failure.
These change programmes were not trivial: for example, in one organisation total productivity increased by 100%, while in another the changes resulted in a prestigious 'best place to work award' for the first time in the organisation's history.
Although it would be nice to think that these successes were down to our own skills and personalities, the truth is much simpler the rules of change management have been transformed.
In essence, the new informal networks approach to change management recognises that the solution lies in engaging natural leaders who are both highly influential with colleagues and also change-positive (or at least open-minded) by nature.
These 'change agents' can evolve day-to-day company behaviours and deliver surprisingly quickly fundamental culture change in the workplace. Peer pressure delivered by real change agents not management favourites, those with impressive job titles, or self-appointed change junkies is the key ingredient in programme and project management methods.
At this point, it may be worth asking yourself the fundamental question: how many of our natural leaders can we identify today?
Unless your organisation is very unusual, it's highly likely that more than 75% of your natural leaders are not in the formal hierarchy at all even if you picked up the phone right now and asked all your local managers' who the natural leaders are, only a small percentage of the combined answers you receive would be right!
Real change agents cannot be identified accurately through any form of 100% or representative sampling.
Only biased sampling through the informal networks linked to known change-positive individuals across the organisation gives highly accurate results when you work day to day with chosen change agents, you know if you have got the selection wrong.
Identifying the real change agents is a key milestone towards successful change management, but it is only the tip of the iceberg. These key individuals can guide you through how work really gets done in your organisation warts and all.
Managing effective change is just one example of one type of problem that cannot be resolved simply through logical application of time, effort and money.
Without thinking too hard, you can probably identify up to a half-dozen business problems that have defied solution over the years all difficult, intractable, with one partial solution only leading to another different type of problem.
Problems such as these can be resolved only by building employee trust, and that should naturally develop as they explore for themselves the reality of informal human and knowledge networks.
Consider the following questions: How many natural leaders will be lost through proposed redundancies (voluntary or compulsory) in this time of recession and cutbacks? How many effective collaborative informal networks will be fractured or destroyed as key individuals leave? Did I hear you whisper that you don't know?
Finally, one extra item of good news: many of your competitors are likely to get their change approaches wrong, with serious results for them and that could mean there's a new business opportunity for you. Informal Networks Limited
(This article first appeared in Legal Strategy Review, Issue 5 - reprinted courtesy of the author)
For more on this see: Dealing with resistance to change - via informal networks