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Small Business Digest


Leading Change in Small Business: Five Tips to Play to Strengths

Leaders in large organizations don't like to admit it, but they often look to small business to learn best practices in organizational change. Most corporate CEOs would trade their annual bonus to have the agility of a small business. Why? Because small businesses are in many ways better equipped to respond to adaptive challenge.  When leaders of small business play to their inherent strengths, they can lead change with astonishing speed and effectiveness.

Change is an imperative in today's high-speed, ultra-competitive, global environment.  And leading change is the supreme test of a leader -- a test that leaders fail 70 percent of the time, says Timothy R. Clark, Ph.D., in his new book EPIC CHANGE:  How to Lead Change in the Global Age (Jossey-Bass, 2008).  For this book, he analyzed initiatives at 53 organizations -- including businesses, schools, health care facilities, government agencies, and non-profits -- to understand exactly what it takes to create effective, sustained, systemic change.  He also interviewed 300 executives who were either directly responsible for these efforts or were deeply involved in the process.

Clark discovered that all successful change efforts follow a sequence of four stages -- Evaluation, Preparation, Implementation, and Consolidation.  He determined that the secret to driving change forward always revolves around a leader's ability to engage and energize an organization's people during all four stages.  EPIC CHANGE lays out each of these stages, along with the steps leaders must take at each one, providing a blueprint showing where leaders' efforts must go and why, so they can win the battles with competitive forces that prey on every organization.

Clark offers these five essential tips for a business to play to their strengths:

First, let everybody weigh in.  Clark says, "In my first job out of college, I worked for a small business. After about a month on the job, I was both surprised and delighted to receive an invitation from the CEO to give input regarding the direction of the company. I was new and inexperienced, so I didn't have much of substance to say, but the mere invitation to participate bound me to the leader and the organization in a remarkable way." When it comes to inviting members of an organization to participate in change, the small organization has a distinct advantage based on size.

Small organizations can often achieve "enterprise participation" during the formulation stage of change, which means that everyone in the organization is invited to participate in providing input into what should change and how. Broad-based participation in the early stages builds commitment for the journey ahead.

If a small business is contemplating change, they should explain to their people that decision-making authority hasn't changed, that it's not necessarily one-person-one-vote, but that the company wants everyone to weigh in with input. The company will be surprised at the quality of the input they receive even from the most unlikely people and places and will have the opportunity to build commitment for change more deeply, more broadly, and more quickly than a large organization. The more people participate in the formulation of change, the more zealously they participate in the implementation of change. Find ways to let everyone weigh in at the beginning.

Second, cultivate thick trust. Many small business leaders don't think much of the water cooler discussions, greetings in the hallway, or the hundred other acts and gestures that they perform in their daily interactions. But this is the stuff of which trust is made. Why are smaller organizations more agile than bigger ones? Clark says, "it's not the fact of being small that makes it so; it's because of what smallness can do. Smallness gives you the opportunity to build "thick" trust, which is a strong emotional bond that forms from direct and frequent interaction. The advantage you have over a larger organization is precisely the fact that you are able to interact directly and frequently. That interaction produces a version of trust that is stronger than what leaders in large organization can create. "
The small organization has a massive advantage in trust creation. Take full advantage of the ability to get face to face. Create opportunities to let people talk to leaders informally. Don't hide behind a desk in an office somewhere and shoot off emails as a substitute for a presence. Leaders should make themselves visible and accessible, and make a conscious effort to cultivate thick trust.

Third, use the speed of a small business. Studies show that about half of all employees in large organizations don't understand their company's strategy. Small organizations are typically less complex in their internal communications efforts because they can be. The goal isn't complexity. There's no need to add communications channels and formality if you don't need them. The goal of communicating change is to align the organization behind a vision and plan for change. This creates coordinated action, which is what moves change forward.
Fourth, sprint to early results. The most demanding stage of change is implementation. Clark says that, "this is when you feel the strain and stretch of the challenge. In my research, I discovered that during the implementation stage, employees demonstrate different "spans of uncertainty." In other words, people have different capacities to support change until the effort produces tangible results. Some people can tolerate uncertainty for a long time. They have a type of emotional stamina to handle ambiguity in the future. Other people wither under the same conditions. The point is that in the average small organization, you will find people with short, medium, and long spans of uncertainty." 

If a change effort is long and difficult, people with short spans of uncertainty will disengage from the process prematurely. They will "quit" change before it's complete, putting the company's efforts at greater risk. Once the company begins implementation, they are in a race against the clock; the goal is to achieve early results to replenish energy before people's spans of uncertainty run out. Early results refresh a change effort with evidence of progress and a sense of forward motion. So along with your overall plans for change, specific goals should be set for early results. Make sure early results are truly achievable, outwardly visible, easy to measure, easy to communicate, and symbolically important.

The best way to manage the engagement level of people is to sprint to early results as soon as the company begins implementation. Remember, change is ultimately based on a willing offering of discretionary effort. It's the leader's job to help people see the evidence of that effort as soon as possible.

Fifth, don't take the leader's hands off the wheel. Many large organizations make it a practice to move managers to new positions every two or three years. The aim is to round out leaders for higher levels or responsibility through a tour of duty across different business units and functional areas. The natural advantage of a small organization is that leaders tend to keep long-term accountability for change. But in spite of this advantage, remember that change is not self-executing. After a leader achieves the hoped-for results, change remains fragile. It can still unravel if it is left unattended. Change has to sink into culture of the organization before it will stick. Don't make the common mistake of taking hands off the wheel just because results have occurred. Results are often a false positive that give the impression that leaders can safely walk away. Going the distance means giving the process constant attention until change is consolidated.

How does a company know when they've gone the distance and when change will stick? Look for key indicators such as people complaining less and asking fewer questions about the change. Leaders will see the comfort level gradually rise. Eventually, someone will ask, "How did we used to do that?" That's a sure sign that the company has gone the distance. 

Adapted from article by Timothy R Clark

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