Why do organisations fail
at attempts to change

The Secret- How To Build Exceptional Customers Loyalty

The executives who have the courage and foresight to lead the way will not have to worry about losing customers to their competition. Are you going to be one of them?

What if you didn't have to worry about losing your customers to the competition? What if you could increase your market share by 30%? Now, what if you had to radically change the way you do business in order to achieve those results?

Still with me?

Many companies are trying to reengineer and focus on customer satisfaction. In addition, these same companies have spent millions on new technology like Enterprise Resource Planning software (ERP) and Customer Management Systems (CRM). Yet many executives have a hard time explaining how this new technology will change their business and their relationship with the customer.

The top executives make sincere proclamations about being "a customer- oriented company" and repeatedly say, "our most valuable asset is our employees." They talk about the rising competition and the faster pace of change. They advocate listening to their customers - offering customer solutions. They describe how individuals can spot opportunities to make a difference. This makes the executives feel good, and often makes the employees feel good, too. The executives believe they are preaching a radical revolution. They believe they are implementing all the ideas in the latest management book.

The employees, on the other hand, are convinced that they know more about what's really going on than anyone at the top. And when it comes to implementing new technology and its true business purpose, they often do. They see lots of things that could be changed to improve and streamline the operation in ways that will increase customer satisfaction. This knowledge and the executives' invitation to use it give employees a strange combination of hope and fear. Somehow things will change. Someone will alleviate the tedium of their routine jobs, and one day the endless trivial company politics will cease. Best of all, they think they can enjoy all of these long-overdue changes without having to sacrifice their job security, pensions, and automatic pay rises.

Yes, employees want more say. Yes, they do have valuable input. But many don't want the responsibility of becoming more accountable. They don't want to endure the transitional aches and pains which are part of the significant change that implementing a new technology brings.
The truth is that in traditional companies, neither the executives nor the employees want real change. If they did they would already be working with the new technology in a new environment. Why? Simple. It's human nature. The great majority of people prefer the status quo.

Knowing human nature makes "The Secret" of change very simple and obvious. Most people will change when an emergency or a radical restructuring of their living or working circumstances forces them into it. In a crisis, everyday people become heroes, but only then. Most people resist change, period!

Even with the best of intentions, executives and employees never accomplish meaningful changes unless there is a crisis that threatens their very existence, or unless management makes a unilateral decision to radically change the structure of work and its rewards.

Merely talking about radical change while remaining in a traditional structure does little or no good. The system still rewards conformity, not risk. It supports the politics and selfish maneuvering, not the needs and priorities of the customers.

When every process is broken down into many specialized functions, coordinated by people who never see the customer, who knows who is responsible? Most employees just do as they're told. They play politics with the right people, and then blame another department or the management when something goes wrong. Is it possible, in this environment, to successfully implement a new technology? What do you think?

What I often observe is that management blames employees for not wanting to be responsible and accountable. Employees blame managers for not truly leading change, not meaning what they say, and not walking the talk. In most cases, they are both right, and this is the way they both avoid making genuine changes.

All the talk, all the workshops, all the training, all the profit sharing plans that give minor rewards across the board will never change the basic behaviour of most of the employees in such a system. People won't become decision-makers and hold themselves accountable for three reasons:

1. They would rather continue playing the old game and manipulate the old, familiar system than experiment with a new one that may sound good but is not proven.
2. Management does not understand how the new system will change the enterprise.
3. Management has asked for a behavioural change without changing the organisational structure. (What does that communicate to the employees?)

One thing I've learned in the 20 plus years I've been helping companies change is that structure determines behaviour. Changing the structure of an organisation, including rewards, is the only way to establish genuinely new behaviour.

One of the reasons that many organisations are having trouble implementing new technologies like SAP, PeopleSoft, etc. is that those companies are trying to attach a new technology to an old system. That's "The Secret" to organisational change. You must first replace the old system with a new structure.

Real structural change can be accomplished in a company only during a period of crisis. Whatever the crisis, urgency works to eliminate the natural human resistance to change. Crisis is actually a blessing for a leader trying to make genuine changes. Most people face reality more directly and react less selfishly when faced with a truly urgent situation. You can leverage such an urgent situation to make rapid changes within a matter of months; changes that might take years in a relatively successful and stable organisation.

When your company is not in a crisis, there is a better way to implement change: the pilot approach. Begin by introducing the new structure to a small group within the company - a project team or division that's ready to embrace change. Involve your best and most progressive customers, the ones demanding a higher level of service and response from your company. Work out the difficult bugs and chaotic experimentation with this prototype group.

Use their energy and ingenuity while protecting them from the rest of the organisation. Nurture their process of change where you can, and give them visible, tangible rewards and recognition for taking this risk. Then, when you can hold this successful prototype up as an example, implement the new structure in other areas of the organisation.

This will tend to eliminate much of the natural human resistance to change, because people largely fear the unknown, not the known. When they see that the new model is workable and attractive, they'll be more likely to give it a genuine try.

In either method, shaking up the whole company or just part of it, the only effective way to change basic behaviour is to create a new structure, a new system of accountability and rewards. "The Other Secret" of change is to start with the customer and redesign your company from the bottom up, the way your front line employees would. Ask yourself these questions:

• What does your company do better than anyone else for a certain segment of customers?
• How are the customers that you serve best, different from others?
• How can you create effective small teams comprised of individuals who have the cross-functional skills to meet the needs of each group of customers?
• How can you organize your company from the customer back, not from the top down?
• How do you eliminate or automate functions rather than streamline them?
• How can you transfer as much decision-making responsibility as possible to the front lines, where customers are?

These basic questions must be answered before companies can successfully move into the next century. But first, leaders and business owners have to become more sensitive to the shock many workers feel just facing the overwhelming changes that are already upon us. Employees are not only apprehensive of change in general, they simply don't understand the changes they see. They aren't in control of downsizing and reengineering. They just feel the effects.

My point is that employees should be the ones reengineering companies. To do that, they need support and coaching from the leaders. They need to form small business teams that understand the customers. They need to learn how to redesign the operation around customer needs. This won't occur in most companies unless the leaders are willing to radically change the structure of the organisation, employee accountability and the rewards.

Employees, for their part, must see that this revolution is ultimately a positive one that will both increase the competitiveness of the company and enrich their work environment.

If your company is just streamlining functions and departments, expecting people to perform the same jobs faster while working longer hours, or simply combining two jobs into one, then you are not reengineering your company. You are just adding stress to an already stressful situation. If, on the other hand, you are truly interested in adopting a new business model that will help your company be creative and competitive in the next decades, you must work towards making fundamental changes.

Transforming your company is an arduous and chaotic process. Sticking to simple fundamental principles helps you keep on the path. Communicating this simple vision will keep your employees and your industry allies clear about your direction, even during disruptive change.

The companies that adopt this new business focus today will be prepared to take advantage of the enormous technological changes that are underway in our society. So, "The Secret" is... don't waste time merely streamlining your company. These times demand revolutionary change.

Back to my first question: "Are you going to be one of them?"