Ep 1: Why Do You Wanna Change?

Welcome to the first episode of “Harmonious Workplaces,” a podcast where independent consultants Rich Cruz and Ben Kleinman explore, challenge, and build on organizational culture and change management concepts, blending theory with their professional experiences. In this inaugural discussion, Rich and Ben tackle a fundamental question: Why do organizations want or need to change?. This isn’t just for business owners or team leaders; anyone interested in making work more enjoyable will find valuable insights here.

Understanding the Landscape of Change Models

To frame the conversation, Rich and Ben introduce several prominent change models that underpin successful organizational transformations. While different in their terminology, they all emphasize the crucial need to establish a clear reason for change.

• ADKAR Model: This popular model, developed by Prosci after studying over 700 organizations, stands for Awareness, Desire, Knowledge, Ability, and Reinforcement. In this episode, the focus is particularly on the “Awareness” and “Desire” outcomes, highlighting the initial recognition and willingness for change.
• Kotter’s 8-Step Model: Rich, who was introduced to this model in his MBA days, mentions key steps like establishing a sense of urgency and developing a vision. The full eight steps include creating urgency, building a guiding coalition, forming a strategic vision, enlisting a volunteer army, enabling action by removing barriers, generating short-term wins, sustaining acceleration, and instituting change.
• Transtheoretical Model (Stages of Change): Ben highlights this model, which uses terms like pre-contemplation, contemplation, preparation, action, maintenance, and termination. Like the others, it centers on the idea of recognizing that something needs to change and understanding why that change is necessary.

The Driving Forces Behind Organizational Change

So, what specifically triggers these organizational shifts? Harvard Business School points to several common causes:

• New Leadership: A change at the top often brings new strategies and directions.
• Shifts in Team or Work Group Structure: Reorganizing how teams operate can necessitate broader change.
• Implementation of New Technology: This is a frequent driver, especially for Rich given his background, as new tech demands new processes and behaviors.
• Adoption of New Business Models: This can arise from mergers and acquisitions, or external forces like PESTEL factors (Political, Economic, Societal, Technological, Legal, Environmental).

Beyond these, the hosts discuss other significant influences:

• Market Evolution: Markets are constantly evolving, often at an accelerated pace, with competitors innovating and new entrants emerging.
• Customer Preferences: Customer desires are not static and frequently change, requiring businesses to adapt.
• Regulations: Heavily regulated industries like healthcare and finance must quickly adopt changes in rules or risk severe consequences.
• Societal and Technological Changes: These broader shifts, including major events like the post-COVID move to remote work and its subsequent return-to-office discussions, significantly impact how organizations operate.
• Downsizing: When staff reductions occur, remaining employees often bear increased workloads, necessitating internal adjustments.

A common thread through all these factors is that people generally do not like change; they get comfortable, and change is expensive, especially for larger organizations that have “systematized” their operations.

Two Theories of Change: Theory E vs. Theory O

The discussion pivots to a 2000 Harvard Business Review article, “Cracking the Code of Change,” which presents two distinct perspectives on why a business might change:

• Theory E (Economic Value): This approach focuses on shareholders and maximizing financial return. It’s often associated with “hard” outcomes and industrial psychology, emphasizing tasks, performance, and actions like layoffs, restructuring, or divestitures to boost shareholder value. From a business perspective, it largely boils down to increasing revenue and decreasing costs to improve profit. These changes tend to be more top-down and less collaborative.
• Theory O (Organizational Capability): This is a “softer” approach that emphasizes developing corporate culture and human capability through individual and organizational learning. It aligns more with organizational psychology, focusing on group dynamics, motivations, and how people work together to achieve goals. While termed “soft,” it’s not necessarily cheaper or easier; it involves significant time and financial investment in people and culture to foster engagement and commitment. This approach is often more collaborative, aiming to build something through collective effort.

Ultimately, for non-profits, the goal is similar: to generate funds and operate without deficit. Regardless of the specific theory, change efforts aim to provide value for both external stakeholders and the organization itself.

The “Why” is Different for Different People

A crucial insight is that the “why” behind change is not universal; it differs significantly across various roles and levels within an organization.

• Leadership’s “Why”: A CEO or C-suite executive might be driven by industry shifts, market opportunities, or the urgent need to stop financial losses (e.g., “We’re hemorrhaging money”). Their primary focus is often on reducing costs or increasing profits.
• Average Worker’s “Why”: An average worker, while equally responsible for outcomes, might have different priorities. Their “why” could revolve around job stability, increased overtime, or even reducing daily frustrations like a faulty coffee machine. They may not be as aware of the company’s financial struggles or broader market pressures.

The challenge lies in finding common ground, recognizing these different perspectives, and ensuring the “why” resonates with everyone to reach overall strategic objectives.

Leadership Can Come from Anywhere

While top-down leadership has significant “heft” in driving change, the podcast highlights that a spark for change doesn’t always originate from the top. Front-line workers often have intimate knowledge of business intricacies and can identify areas for improvement or new ideas that abstract executives might miss. Leaders can emerge from anywhere in the organization, wielding formal power or acquired/referent power through social connections and influence. The critical step is to source these ideas and empower these individuals to become champions of better processes, products, or services.

Key Takeaways

The Harmonious Workplaces hosts wrap up by emphasizing a few core takeaways from their discussion:

• There are many different change models, but they all highlight the importance of early identification and clarification of the “why” for change.
• Ultimately, for most organizations, change boils down to increasing profit (by increasing revenue or decreasing costs) or, for non-profits, providing more services and delivering more goods. The change must provide value for both external stakeholders and the organization itself.
• The “why” needs to be super crisp and well-communicated, even though what resonates with top leadership may not directly resonate with front-line workers. Finding that common ground is essential for achieving lasting change that becomes ingrained in the organizational culture.

This insightful first episode sets the stage for deeper dives into organizational change, culture, and workplace behavior, reminding us that understanding the fundamental “why” is the cornerstone of any successful transformation.