How to lead effective change management for the service industry - Insights
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How to lead effective change management for the service industry

change managementUnderstandably, with change management being as broad and diverse a field as the industries in which change is sought, best practices differ from viewpoint to viewpoint. What is your perspective? Are you at the helm of a business in the service industry? Are you attempting to implement organizational change? What do you focus on to ensure your company embraces strategic change? EHL Insights makes the case that effective change management in the service industry should do what the service industry does best – put people first.

As Forbes would have you know, people, in this case your employees, are invaluable assets. As human capital, they are a substantial resource. As homegrown brand ambassadors, they shape the reputation of your company. Against the backdrop of the fourth industrial revolution, people-centric leadership has taken on renewed importance. Arguably, this holds true in any industry. It is, however, of particular relevance in the service industry: If the success of service provision lies in the hands of those providing the service, so too does the success of change management.

The two pillars of effective change management

Effective change management requires managers to stare the glaring reality straight in the eye: 70% of all change efforts fail. Why? Among the prime pitfalls are employee resistance, communication issues and the implementation of new technologies. Two of these three issues are people issues. Clearly, to make a change process stick, people issues must be carefully managed.

Prof. Janet Shaner, who teaches Managing Organizational Change & Transformation as part of EHL’s EMBA program, encourages us to see change management as two pillars: Defining the change process on one hand, and managing people issues on the other.

Defining the change process

A discipline unto itself, defining the change process may include:

    • Assessing the current state of your organization
  • Benchmarking against best-in-class
  • Drafting a timeline and planning roll-out phases
  • Clearly defining your end goal
  • Remaining abreast of the DICE factors: project duration, performance integrity, management and staff commitment and additional required effort.

Managing people issues

In an effort to overcome people issues, effective change management requires that managers first recognize the heterogeneity of their target audience – not all employees are created equal. The Five Types of People in Organizational Change™ model may be a good place to start, according to which people fall into five categories:

  1. Pioneers who embrace change
  2. “Yes” people who feel obligated to accommodate change
  3. Crowd followers who wait and see whether the change gains popularity
  4. Skeptics who trust data and need to come to their own conclusions before getting on board
  5. “CAVE” people (Citizens Against Virtually Everything) who don’t care and won’t join in

Choosing whom to start with when implementing change therefore carries great weight. As does understanding how to leverage the involvement of different staff to different ends. This brings us to the need for tangible advice on what makes a good change plan and, in turn, a good leader.

An effective change management plan

Prof. Janet Shaner teaches us that a good change plan needs to understand and consider the following points:

How forces for change must be greater than resistance to change

Your reasons for pursuing change will need to be robust to hold up against any potential resistance. Be sure you have clarity on why exactly you need change and why it has to happen now. Consider both the bottom line and any undesirable tradeoffs.

Resistance may manifest itself in a variety of ways, ranging from an incremental reduction in output or low-key squabbles and disgruntlement to more full-on displays of displeasure, such as strikes. It has become apparent that, often, what employees resist has less to do with the technicalities of the change you have in mind and more to do with what this will mean to them socially. Organizational change often impacts the way employees are able to interact with one another, which may alter the groundwork upon which working relationships and friendships are built. Having employees participate in the change process can help to counteract some of the arising hostility. However, for this to be effective, it must go farther than simply handing off a task list. It must involve an openness to discussion and work with any established networks within the company, rather than against them.

How organizational networks work

While official organizational charts, job titles and role descriptions offer an indication of who does what in a company, the reality is often far more nuanced. If we consider both formal and informal relationships, as is done in Organizational Network Analysis (ONA), we see that people form natural networks, seeking out co-workers who help them do their job. Whether this be by providing the right information at the right time or simply by assisting in keeping productivity high by making coffee breaks all the more restorative.

Be mindful of these formal and informal ties and attempt to identify those individuals who serve as crucial conduits for the exchange of ideas and information (known as “nodes”) as well as those who build bridges between different groups of employees (“knowledge brokers”). Using people analytics to leverage their natural role in your company can accelerate change adoption and limit costly disruption.

How to plan effective communication

Clear communication is essential to any effective change management process. This means providing sufficient information on what you hope to achieve by implementing the change. This is best done in terms of desirable outcomes. Breaking the overall goal down into deliverables for middle management rather than predefined tasks enables those with the information about how things work on a day-to-basis to take initiative and think for themselves. Those in the know can often come up with better, smarter and cheaper ways to deliver in practice what you are aiming for in theory.

Do not be tempted to conceal the extent of the change you are striving towards. This will only lead to more difficult discussions and resentment down the line. Also bear in mind that communication is much more than press releases and internal memos. Your actions as a leader send signals to your employees too. Demonstrate the importance of the change management plan by allocating sufficient time and other resources to any emergent complications. Make it a priority to deal with any shortcomings or conflicts that can be overcome. Model the behaviors you are asking for and adjust the agenda at any senior team meetings or board discussions to reflect your new priorities. Finally, be sure to measure progress in such a way that employees can tell which results matter most.

How the change process can be like the grief cycle

Expect your team to react to change with certain emotions. While it is by no means our intention to minimize the powerful and, frankly, incomparable impact real grief has on people, it is worth noting that organizational change can cause significant upheaval in people’s lives, requiring them to let go of the old and embrace the new. The stages of grief:

  1. Denial: Your team may presume your drive for change will blow over or be done with after a few pro-forma tweaks here and there. Apply increasing pressure and drill down on deliverables to overcome this stage.
  2. Anger: Meet anger with increased emphasis on rationale.
  3. Bargaining: Employees may seek a compromise. Steadily raise your standards by means of targeted measures and accept incremental progress.
  4. Depression: When employees struggle with the realities of the change, exercise empathy and celebrate any interim successes. Some employees may choose not to complete the journey with you, in which case letting them go may be a necessary evil.
  5. Acceptance: As your change efforts bear fruit, acceptance may start to flourish. This is not, however, the end of the road. Stay on top of your indicators to make sure the change is having the desired effect.

How you personally respond to change

Cultivate an awareness of what you are expecting from your employees and reflect on the impact change has on you. Use this unique opportunity to reinforce what kind of leader you are. You are a leader who values people. Because effective change management in the service industry lies in their hands.

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