A client who is a very successful financial advisor once shared with me this phrase and mentioned it was used by a CEO client of hers when things got bogged down in his company. I’d like to briefly explore the implications of this powerful insight in relation to how high performing companies handle change.
When a change occurs, William Bridges, Ph.D., the internationally known author of Managing Transitions who has written extensively about today’s frequent and disruptive changes, states that there are three key questions that need to be asked:
- What is changing?
- What will actually be different because of the change?
- Who’s going to lose what?
In business, the success of a change effort can be directly correlated to the level of candor and thoroughness engaged in their analysis of these questions. As we discussed in a previous post, there are often elephants in the room that are difficult or tougher to discuss, but for any complete review of the three questions, all the issues must be addressed.
An example, based upon the experience of a client, the leader of a national sales force responsible for almost $500 million in revenues, who recently decided to adjust their compensation plan for the advisors. This was a change that was meant to increase revenues for the firm, encourage certain behaviors on the part of the advisors and be fair to the clients. So the constituents were the firm, the advisors and clients. There will always be certain levels of resistance to any change, but in this case, here are some the answers to the three questions for this change in sales compensation:
1. What is changing?
This was made very clear to all: Fees on certain transactions were going to increase after several years of holding them steady. Plenty of “what if” scenarios were played out and before it was announced, a huge amount of analysis was engaged in. What had happened that increased the costs to the firm? Were additional benefits going to accrue to the clients? What was the competition doing?
2. What will actually be different because of the change?
This was actually more complex because different advisors operated under different investment models and the impact on each varied. What will be different in the plan was very clear, but the leaders allotted time for various advisors or teams to absorb how the new policy would impact them and their clients. Again, various “what if” scenarios were played out with the impacts on all constituencies.
3. Who’s going to lose what?
Just adjusting to a changed model can be considered a loss for many because it requires folks to adapt to new things. Oftentimes this concern is avoided and not discussed because it’s uncomfortable but until people can see a change as a gain, they will resist. In this case the losses are that some clients would have to pay more for some services / advice and the advisors would have to inform or “sell” the increase to their clients. Some advisors may also make a little less on some transactions but more on others. It may require some advisors to rethink elements of their business model. Unfortunately, some will focus on potential losses, however remote, tiny or even non-existent until the benefits can come into view.
By taking great care to not only anticipate and plan for this change but to manage the communication process well, this client was able to implement this plan shift with minimal push-back. The potential “losses” were all held up to the light of day and dealt with. The anticipated benefits have occurred for the firm, the advisors and without any major resistance by the clients.
When you, as a leader feel like NOTHING is happening, use the 3 questions above to help you in your analysis of what the SOMETHING might be that’s causing it.