Strategy: Dealing with change

For 35 years, Chicago, Illinois–based consultant Richard Axelrod pioneered and championed the use of employee engagement to effect large-scale organizational change. He believes that times are different now. To achieve change and to thrive in today’s marketplace requires maximizing employee engagement more than ever before. It’s a matter of survival.


In times past we’ve seen or heard about a government official, corporate president, war hero, John Wayne, Moses, or bold CEO who leads a turnaround. The story is always the same. The heroic figure, because of insight, charisma, and leadership skills, is able to persuade a reluctant group of people to do something they might otherwise not want to do. However, recessions leave no room for leadership and management prima donnas, expensive consultants, and diverse organizational efforts with global integration of outsourced multinational workforces.

In his latest book, Terms of Engagement, Richard Axelrod says that to survive and thrive in times of economic downturn, all energies must be applied to recognizing how to get the absolute maximum quality and productivity out of the people you have.

Firstly, employees at all levels can make enormous contributions toward improving organizations. Secondly, without the support and commitment of employees at all levels, significant organizational change is impossible.

He offers up a new paradigm in change management, one that calls for designing work with engagement built in.Axelrod boils it all down to four key activities:

1.                  Widen the circle of involvement. Include all the stakeholders from inside and outside the organization. Mere buy-in is no longer an acceptable goal. You must move toward deeply engaging people in the change process from the beginning, creating a critical mass of energetic participants who design and support the necessary changes. When you widen the circle of involvement, you go beyond the dozens who are typically involved in current change practices and instead involve hundreds, even thousands, of employees.

2.                  Connect people to each other.Use a variety of dialogue methods and techniques. When people connect with each other and to powerful ideas, they generate creativity and action. Barriers to the flow of information and new ideas crumble as people forge links with others. Work also flows more smoothly because people learn how what they do fits into the larger whole and how they can access needed resources.

3.                  Create communities for action.Create new forums for people to have a voice in change that impacts them. When we create community, we move beyond a group of people who may have personal connections with each other. We create a group of connected people who have both the will and the willingness to work together to accomplish a goal that has meaning for them.

4.                  Promote fairness throughout the process. Fairness provides an ethical foundation for change. It produces trust and confidence in both the change process and those leading it. It is a universal principle that speaks to the human spirit, the desire to have a say, and the desire to shape one’s own destiny.

These principles and the three key leadership practices of honesty, transparency and trust combine to form a new basis for a system that governs how all work is done in the organization.

Using this system can be very difficult for many managers who have been with the organization for a long period of time. It means making a change to how things have been done. It means committing to a process that puts an end to the few deciding for the many.

Axelrod finds considerable support for the engagement approach in the newest breakthroughs in neuroscience, which help explain how the old change management actually works against creative problem solving. Simply put, there are two human responses: we move away from threats and we move toward rewards. When the threat response in the brain kicks in, creativity and innovation decrease. When the reward response in the brain kicks in, creativity and innovation increase.

“Engagement sets the path for the future of the organization,” Axelrod says. “Companies have to involve more people and give them a voice in what's going on.” There are a variety of ways to increase engagement, including in-person meetings and Internet and social media technologies. You can hold large group conferences with workshop-type sessions. You can also carefully build and deploy Internet and social media systems that engage people in real time.

It is important to include people from all levels and functions and other people who are important to your business, such as customers and suppliers. Pay attention to what people are saying and be responsive to the ideas that come out of the dialogue and the feedback the company is receiving.

“One benefit of engagement is that if the leaders stick with the principles, they will be equipped to deal with changes they don't even know are coming,” Axelrod says. “What you're really doing is building the capacity for real change in the organization. The lasting benefit is that people at all levels are prepared to deal with change.”

The benefits of engagement are documented and significant. In an engaged organization:

•           People grasp the big picture, fully understanding the dangers and opportunities.

•           There is urgency and energy as people align around a common purpose and create new directions.

•           Accountability distributes throughout the organization as people come to understand the whole system.

•           Collaboration across organizational boundaries increases as people connect to the issues and to each other.

•           Broad participation quickly identifies performance gaps and their solutions, improving productivity and customer satisfaction.

•           Creativity is sparked when people from all levels and functions, along with customers, suppliers and important others, contribute their best ideas.

•           Capacity for future changes increases as people develop the skills and processes to meet not just the current challenges but future challenges as well.

“The bottom line for companies and organizations dealing with change and trying to survive is this: you have to engage your people, or die trying,” says Axelrod.

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TERMS OF ENGAGEMENT: New Ways of Leading and Changing Organizations, by Richard H. Axelrod, captures lessons learned during 35 years of helping management teams develop their business strategies.

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