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Solving the Toughest Change Management Challenges

2 minutes

Change management is often where projects break down. It is difficult, demanding, and frequently leads to failure, even for great ideas. Let’s take a closer look and see if we can find a conclusive solution.

When an organization resists adopting new processes, structure or technologies we need change management. We can use frameworks such as Kotter, ADKAR, McKinsey 7-S, Bridges.... etc. in order to enable coordination, capabilities, and incentives so that the organization can successfully adopt the new ideas. This is in theory but not always so simple.

Change Management on Hard Mode

For some organizations, change is nearly impossible because the culture rewards staying the course and avoiding disruption. Looking closer, the payoff for resisting change is higher than the reward for adopting it. Unless that balance shifts, new ideas will always struggle to take hold.

For organizations that have an extremely risk-averse culture adoption of any new idea is very difficult and often fails. If the leader of an organization wants to adopt a new idea, how can they guarantee employee adoption? The only real guarantee is if the employee payoff for adoption is higher than their payoff for resistance.

Ideally, adoption is expected as part of the job. In practice, employees often benefit from resisting and can easily use plausible excuses for non-adoption because the change only adds work without a clear upside.

Case one is not offering employees any compensation or bonus for adoption. Their only benefit is extra work. In this case using game theory, it is in their best interest to resist since this offers the highest payoff. Such an approach won't guarantee good results.

A common tactic is offering bonuses or promising major benefits upon successful adoption. However, when success depends on broad employee cooperation, resistance can still remain the preferred option.

Case two is to offer a bonus if the idea is successful. In this case, resistance or adoption both require employee coordination and for any bonus value, coordinated adoption is still not a dominant strategy.

Adoption only becomes dominant when it aligns with each employee’s self-interest. Suddenly systems are operational, resources are sufficient, and everyone knows what to do. The most effective approach is to provide immediate rewards, not necessarily financial, so adopting creates a greater payoff than resisting.

Case three offers immediate compensation for adoption to the employees and if this payoff is higher than that for resistance it becomes the dominant strategy for employees who will act in their own self-interest. This approach is the best strategy to ensure cooperation for adoption.

Embedding Change Management into Advanata

A key differentiator for Advanata is its ability to optimize across multiple goals, including change management factors such as process novelty and training requirements. It also easily accounts for additional adjustments to ensure solutions are both optimal and implementable.

Advanata only requires some small changes to how we structure the problem to support change management requirements. Resources must also allocate for adoption payoff. Options must account for adoption cost. Additional goals must be added for adoption risk. Configuration of problem parameters and problems solution remain the same with no changes needed.

Ensuring Solution Completeness

Like analytics, change management extends far beyond business. When people are asked to adopt a new idea, the most reliable approach is to provide an immediate payoff greater than the benefit of resistance. Advanata supports this with a framework designed to produce complete, optimal, and actionable solutions.

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