An important thing in any kind of business transformation is to keep people as people in the front of your mind. We have a tendency during business transformation to think of people as “resources” rather than individual human beings. But people are not machines, they are individual humans with motivation and free will.
Real business transformation comes when we change people’s mindset. That means changing what is going on inside someone’s mind. You do not do that by telling them, exhorting them, or yelling at them. People change their mindset because it is in their own best interest to do so.
Look around your organization. You probably see some behaviors that do not make sense to you. Since people act in their own best interest, you can be sure there is a rational reason for how they are behaving. You just need to discover it.
Let me share a typical story about a Program Manager named Susan (this is a composite from many, many companies where I have worked over the years). Susan works for a very large company and is responsible for 50 people. She is typically overseeing 7 projects at a time. Susan regularly assigns each of her people to work on 3-5 projects at the same time.
Susan’s company is in the midst of “process improvement to be more efficient”, and so I met with Susan to work out together how her teams could be more efficient. I know that well-respected studies show that having a person on that many projects at once is very inefficient, so I was puzzled by how Susan was assigning people to projects.
As we chatted, Susan told me she is rewarded for filling up her people’s time 100%, she is rewarded for spending 100% of the budget, but she is not rewarded in any way for being more efficient. No matter what the executives said about efficiency, it was clear to Susan that they did not mean it because they continued to reward for inefficient behavior.
When what you say is opposite of how you reward, people will behave according to how you reward them. Your words mean nothing if the culture and environment do not support them.
If you want to change how people behave you have to change the environment they work in so that the desired behavior is something they see as in their own best interest. This may mean making change to any or all of the physical environment, business processes, metrics, rewards of all kinds including social, and practices. But how do you know what that change needs to be?
You start by identifying the behaviors that you want to change. Let us assume that the executives at Susan’s company are really serious about being more efficient and they select one behavior to change: we want the Program Managers to assign people to 1 or at most 2 projects at the same time.
Now we have to find out all the things that drive Susan to assign people to 3-5 projects. We know a couple of the reasons – fill up their time 100% and spend 100% of the budget. But what else? Why is Susan managing so many projects at the same time? Susan is rewarded by her boss for having a lot of projects in flight. The more she can prove she can handle at once, the more likely she will be promoted. George, the executive in charge of Susan’s division, says she shows she is a good person to promote by taking on every project requested and getting started working on it at once. Hard work, and even heroic efforts, are the things that are rewarded.
On the customer side, Susan’s peer Jeff is also rewarded for spending money as fast as he can. If he spends all his budget, he can ask for more, and so he is incentivized to start a lot of projects at once. He is also pressured by his boss to show he is “doing something” which is interpreted as running a lot of projects at once.
In this kind of environment there is no reason for Susan to change her behavior. Just asking her to do so will not help. Getting her training or a coach will not help. Putting up posters will not help. Changing the environment is the only thing that will allow Susan to make the change that the executives want.
So what needs to change? One change is to stop rewarding people for spending 100% of their budget. In many companies this is very hard to do because the rewards (and punishments) are coming out of the corporate portfolio and funding process. If George’s division saves money he will find his budget cut the following year because “you obviously don’t need all that money”. Or perhaps if George’s division saves money it will be taken away and given to another division that is running over budget.
In George’s company, people running the divisions with the biggest budgets are the most likely to be promoted to the C-suite and so having less money in his division is not in George’s best interests. He works hard to be sure all the money his division is allocated is spent every year, and even tries to ask for a little more at the end of the year to justify a larger budget the following year.
So even a “simple change” such as stop rewarding people for spending 100% of their budget is very hard to do. It requires strong support from the C-level executives and possibly the Board of Directors. This change has to start all the way at the top of the company with an overhaul of the corporate portfolio and funding process, and very likely with changes to how executives are rewarded (remember the bigger the budget the more likely someone is to be promoted).
Maybe a simpler change is to stop rewarding people for filling up 100% of their employee’s time. This practice came from a mistaken idea that busy is the same thing as productive. Instead of using hours worked as a measure of productivity, perhaps we could change to measuring cycle time – how long does it take from request to delivery of solution?
This change also has to go all the way to the top. The Board of Directors has decades of productivity numbers based on hours worked and if the metric changes, then they cannot compare the previous years to work going forward. They will have to work this out with the accountants and the legal department. Various US corporate laws make some kinds of changes very difficult to make due to having tax implications and possibly legal implications.
That was just two things that need to change before Susan will be motivated to assign people to only 1 or at most 2 projects at a time. Both of these “simple” changes require support from the top of the company as well as significant changes to how the company is run. And we still have not addressed all of the things impacting that one behavior!
Changing the environment also means the executives all have to model the desired behavior from the top down. Just as children imitate their parents (whether we like it or not), so employees take their cues from those in positions above them. After all, if you were successful behaving the way you do, then obviously the way for someone else to be successful is to model your behavior. The higher you are in the organization, the greater your impact on everyone in the company.
Back to Susan’s example. If Susan works for me and I want her to assign people to one or two projects at a time, then I have to assign Susan to one or two projects at a time, and I myself have to work on one or two projects at a time.
What does that mean assign Susan to one project at a time? Does that mean she has only one project for all her teams? No. Susan is a Program Manager, so she is not working in the projects. The Project Managers directly manage the projects. Her “project” is to oversee the set of projects her teams are implementing (which should be a number that is small enough she can actually oversee all of them). At the same time, I do not want to ask Susan to take on planning the organizational fall fest, and run the company’s Toastmaster’s club, and do that research project and special report I need for the CTO, and, and, and.
I also have to work on my own time management, focusing on one or two things at a time and getting them done before moving on. My personal example will demonstrate to Susan that this really is important to do. It will be far more effective than talking about it.
In addition to the other changes, one of the most powerful things you can do is regularly measure the behavioral change and publicly track progress. This provides a social motivator where people start to compete to do the right behavior.
Determining what to measure can be tricky because numbers are easy to game. For example, if we check the time tracking system to verify that each person is working on no more than two projects, we may very well find that line workers are being directed to only record their hours to two projects when they are actually working on several.
To overcome this problem, you may need to measure two or three different things and cross check them. In Susan’s case, the average project needs a team of 15 -20 people. Since 50 people work for her, if everyone is on one project at a time, she should be running 3 projects at a time. We can verify in the time tracking system that only 3 projects are being reported for her group. We can also estimate how much work 15-20 people can do in a month full-time on one project, then check with each project to see if it has progressed that far in a month.
These are not perfect measures either. At some point we have to spend time on the floor with Susan and her teams to know what is really happening. We cannot rely on metrics and statistics to know what real people are doing day-in and day-out.
To summarize: When doing a business transformation of any size, keep in mind that your people are human beings who will act in their own best interest. To change behavior, you have to find out what in the environment is encouraging the current behavior, and then change the environment to support the new behavior. Sometimes seemingly simple changes have to be made at the very top of the company. One powerful motivator is for executives to model the behavior in their own work that they want others to follow. Another is to use appropriate frequent measures of behavior change and post the information publicly.
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