Business Transformation initiatives are typically undertaken to solve a pressing issue, bring about improved performance, or to serve customers better.  A critical element of the success of such initiatives entails transforming the existing behaviors of the employees across the organization.  However, this isn’t a straightforward task.

Attitudes and practices get reinforced in people by following established routines day in and day out.  Such practices become a part of an Organizational Culture over time.  These ingrained behaviors and practices aren’t considered burdening until the organization’s performance keeps declining considerably over time.  That’s when the leaders think about changing these beliefs and habitual actions.

Psychology and Neuroscience can help enterprises change the deeply embedded attitudes and practices of people and replace those with new beliefs and practices.  Leading organizations are using psychology and brain research to induce successful Organizational Transformation.

The practices that these organizations employ to engender Transformation are based on the following 6 core Principles of Neuroscience:

1. The brain is hardwired to hold on to habits, making it difficult to change them.
2. Connections in the brain—even deeply embedded thoughts—are quite flexible to transform.
3. Concentrating on new ways of thinking can overhaul individuals thinking habits.
4. Don’t tell people what is wrong, just focus on drawing their attention to the positives.
5. Encourage the ability to reject negative cerebral impulses.
6. The competence to focus attention has to be created bit by bit.

Let’s dive deeper into these first 3 principles of Neuroscience.

Principle 1 – The brain is hardwired to hold on to habits, making it difficult to change them.

Our thinking patterns are stored in circuits by brain parts—including the habit center (basal ganglia), amygdala (emotion center), and hypothalamus (which manages hunger, thirst etc.).  These brain parts, especially the basal ganglia, process info unconsciously and the activity feels rewarding to the individual.  This activity makes stronger neuronal connections with other areas and gets the activity reinforced.

For the desired behaviors and practices to get embedded, the organization need to make stronger connections with the entire workforce’s’ basal ganglia to enable deep rooted neuronal circuits.  The practices ingrained this way are difficult to remove.

Principle 2 – Connections in the brain—even deeply embedded thoughts—are quite flexible to transform.

People with obsessive compulsive disorder keep deliberating on their impulse to wash hands to ensure cleanliness.  This fortifies brain circuits in the basal ganglia, which takes over their behaviors.  However, Neuroscience reveals that even the most well-established notions can be altered.  This can be done by making the individuals aware of what they are thinking and where their focus is in a given moment.

Training and directing people to think about their thoughts can make them conscious of their undesired behaviors, disengages brain areas notable for causing distraction, and adopt new behaviors.

Principle 3 – Concentrating on new ways of thinking can overhaul individuals thinking habits.

The 3^rd principle highlights that persistent focus on unfamiliar, desired thoughts and objectives activates the habit center of the brain, which turns these desired thoughts into habits.  The mechanism according to Neuroscience is such that basal ganglia’s caudate nucleus region processes…

Interested in learning more about the other principles of Behavioral Transformation?  You can download an editable PowerPoint on 6 Core Principles of Neuroscience here on the Flevy documents marketplace.

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– Roderick Cameron, Founding Partner at SGFE Ltd

With most Transformation initiatives people gradually revert back to their old habits of doing things.  Sustainable Change Management necessitates 4 key processes:

• Chartering—defining the scope, rationale, and team for the change initiative.
• Learning—testing and refining ideas before a full-blown execution of the initiative.
• Mobilizing—using symbols and metaphors to engage people and gain their buy-in for the change program.
• Realigning—redefining the roles and responsibilities and managing performance of the initiative and the people driving it.

These processes are critical to enable an Organizational Culture which encourages execution of lasting change.

In addition to these key processes, for the change to entrench into the organizational fabric, Leadership needs to put in place the environment necessary for the people to embrace and own the new processes, systems, and desired behaviors.

The 4 critical processes aid in creating the enabling conditions necessary for institutionalizing change in the organization.  These enabling conditions for sustainable Change take place in 3 settings:

1. Structural Context
2. Procedural Context
3. Emotional Context

The environment for sustainable change must be put in place way before the actual execution of the Transformation initiative.  These enabling conditions encompass making changes to the organization’s structure, procedures, and sentiments / behaviors.

Let’s dive deeper into the 3 conditions critical to enable sustainable change in the institution.

Structural Context

The first element of the enabling environment requires the change leadership to work on reshaping the organizational structure.  The 4 key processes have a direct bearing on the organization’s structure.  Their effect pervades over:

• The organization’s hierarchy and reporting lines.
• Compensations, benefits, and rewards systems.
• Monitoring and control systems.

The Structural Context significantly affects the way employees’ work and expend their time and their interest in certain types of projects.

The structural context is altered during the Realigning process of Transformation in the way new personnel practices are employed.  The Learning process informs the redefinition of linkage between the leadership and field staff.  The Mobilizing process informs the changes to be made in the roles and responsibilities of the management and front-line people—through storytelling and metaphors.  Whereas, the Chartering process helps instill a reformed, team-building culture in the organization.  Together, these changes in the structural context cascade down across the organization.

Procedural Context

The Procedural context pertains to a feeling of objectivity and authenticity of new processes and systems.  The Procedural environment involves the perception of people that their views are taken seriously and acted upon while designing and implementing a new initiative.

Procedural authenticity is critical in gaining commitment from the employees on initiatives that were not validated by them earlier.   It involves belief of the people that the change initiative integrates well with the philosophies of the organization and the way business should be done.  It makes the people feel heard, ensures trustworthiness of the change leadership through positive track records and effective decision making abilities, and alignment of the change initiative with the core values of the organization.

Interested in learning more about the other enabling conditions mandatory for institutionalizing change?  You can download an editable PowerPoint on Conditions for Sustainable Change here on the Flevy documents marketplace.

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You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.  Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market.  They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.  I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.  In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

Product managers, marketers, and designers are often confused as to what they should do to increase the chances of customers’ engagement and uptake of their offering.  Changing individuals’ behavior to enhance engagement, productivity, innovation, and happiness isn’t straightforward.

It takes a lot of effort, time, and resources to execute initiatives aimed at transforming behaviors and Organizational Culture.  However, most people aren’t interested in changing and like the status quo to prevail.  This is where Behavioral Economics can help to know how customers behave, interpret their decision-making methods, and create solutions targeting those behaviors.

Product designers and marketers aspiring to drive acceptance of their products can make use of the 3 Bs of Behavioral Change to change understand consumer behavior. The 3 Bs of Behavioral Change classify the 3 elements essential to change behaviors, i.e.:

1. Behavior
2. Barriers
3. Benefits

Understanding and employing these 3 Bs helps the designers and product managers instill change, inspire design and strategy-related decisions, increase the acceptance of new products / features and product engagement levels, and build new behaviors in people.

Let’s discuss the first 2 elements in detail.

Behavior

People have an inherent tendency to maintain the status quo.  Behavioral change necessitates:

• Identifying individuals’ existing attitudes.
• Assessing and tackling psychological biases affecting individuals’ decisions.
• Carefully tracking behaviors that need to be changed.
• Ascertaining the most important desired behavior and exact action that is imperative to drive results.
• Getting the buy-in from all stakeholders on the key behavior.
• Deciding if the behavior should be permanent or transient.

Examples of key actions to change behaviors include spending 30 minutes thrice weekly doing cardio exercises and consuming salad at lunch daily to stay healthy.

Barriers

Understanding the barriers in behavior adoption assists in creating effective solutions to improve uptake of key behavior.  The second step to induce behavioral change is to reduce barriers in its adoption.

• Every decision that a product user has to make, no matter how negligible, increases resistance in the likelihood of completing a specific behavior.
• These actions and decisions, that an individual has to take in order to achieve the desired behavior, create points of friction in embracing key behaviors.  For instance, people often find it difficult to decide when presented with complex choices. They tend to procrastinate or become a victim of decision paralysis.
• Removing the points of friction and resistance from any key behavior necessitates documenting and streamlining all decisions. The path of least resistance leads to desired key behaviors.

Examples of barriers include the thought process involved in the decision to select where to have dinner.  This thought process is, in fact, a psychological barrier in actually going out and having dinner.  Likewise, the decision to walk or drive to a restaurant is a logistical barrier and a point of friction that warrants making a decision.

To eliminate these barriers, we can either remove barriers entirely or just simplify the decision.  For instance, elimination of a non-critical, open text field from a sign-up form—that probed the users about their business, which requires significant time to think and answer—can increase page-over-page conversion.  In case choices are helpful for the users and cannot be eliminated, then it is best to simplify the decision process by giving fewer options instead of many, or by suggesting “recommended option” to the users.

Interested in learning more about the details of the 3 Bs of Behavioral Change?  You can download an editable PowerPoint presentation on 3 Bs of Behavioral Change here on the Flevy documents marketplace.

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Business environment has transformed drastically from what it was a century ago.  It has become immensely challenging due to competition, disruptive technologies, laws, and globalization.  These challenges warrant better performance to address customer needs and to survive—and outpace—intense competition.  Consequently, organizations have become complex.

The work that individuals perform in an organization has also shifted from manual labor and clerical jobs to knowledge-based experiential tasks.  Traditional workforce was required to adhere to commands and stick to routines, whereas today’s workforce needs to be more empowered, innovative, able to adapt to varying circumstances, and render sound judgment.

Adapting with the constantly changing business environment is essential for organizations aspiring to succeed in today’s competitive markets.  In order to stay competitive, more and more organizations across the globe are undertaking Business Transformation programs to reorganize their businesses.  However, a large percentage of such programs fail to achieve the desired outcomes.

For the Organizational Design to be successful, leaders need to be mindful of the revolutionized work settings and business environment of this age.  One of the major factors attributed to these failure rates is utilizing traditional approaches to reorganization, which are proving ineffective in this digital age.  These traditional approaches appreciate “level of control” and power, and underestimate the significance of employee autonomy and innovation.

The Smart Design Approach to Organization Design

Today’s Knowledge Economy necessitates the employees to be more empowered to decide on their own than merely following commands.  People act in ways that are best for their own interests.  The new approach to reorganization—termed Smart Organizational Design—aligns the workforce’s best interests with the organizational mission rather than seeking control over the employees.  The focus is on changing the environment (context) and mindsets of employees willingly and instilling team work and cooperation, thereby enhancing organizational performance considerably.

The Smart Organizational Design approach entails classifying the existing workforce behaviors, ascertaining the desired behaviors critical to improve performance, and providing environment (context) favorable to develop new behaviors.  The approach encompasses 3 main steps:

1. Define why reorganization is necessary (objective)
2. Determine the behaviors critical to support reorganization
3. How to execute the Smart Organizational Design

Let’s dig deeper into the second step.

Determine the behaviors critical to support reorganization

The next step involves the leadership to determine the “what” element of the Smart Organizational Design approach—i.e., definition of certain behaviors critical to achieve the transformation purpose.  Determining the desired behaviors necessitates thinking through the following 4 critical Smart Organizational Design aspects.  These 4 design aspects work in tandem to shift the environment (context) for the workforce and motivate them to embrace the new behaviors crucial for improved performance:

• The Organizational Structure aspect—pertains to management reporting lines, spans of control, and layers of hierarchy.
• The Roles and Responsibilities aspect interprets individual and shared accountabilities to cultivate teamwork and cooperation.
• The Individual Talent aspect specifies the right skill set and motivation to perform responsibilities of each role effectively.
• The Organizational Enablers aspect outlines the elements necessary for creating the right context (environment) for embracing the desired behaviors, i.e., decision processes, performance management, and talent management.

Interested in learning more about the other step of the Smart Organizational Design approach and the factors critical for its success?  You can download an editable PowerPoint on Smart Organizational Design here on the Flevy documents marketplace.

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Most Transformation initiatives fail to achieve their anticipated objectives.

Change Management is all about engaging and rallying people — at all levels in the organization — to make the transition and sustain that change. It is critical to ensure that the entire workforce is eager and ready to embrace the required new behaviors. More often than not, the technical side of a change initiative is well planned, but it’s the implementation part that fails — particularly, changing the mindsets and behaviors of the entire workforce to enable change to stick.

Managing change is not an occasional affair; it is an iterative process that works on motivating human behavior to accept and adjust to a desired state of mind. The process is naturally evolving as it adapts in accordance with the feedback from the people.

Change Management demands a thorough yet organized approach to enable the “people side” of change to work — essential for accommodating and sustaining Business Transformations. This entails assisting people incorporate new mindsets, processes, policies, practices, and behaviors.

A methodical approach to make the entire workforce accept and support change constitutes 8 critical levers:

1. Defining the Change
2. Creating a Shared Need
3. Developing a Shared Vision
4. Leading the Change
5. Engaging and Mobilizing Stakeholders
6. Creating Accountability
7. Aligning Systems and Structures
8. Sustaining the Change

Now, let’s discuss the first 4 levers in detail.

1. Defining the Change

The first step entails outlining the rationale, scope, and results of the change initiative for the enterprise, key departments, and roles. There is a need to define critical elements, including the requirements from the initiative, the execution planning, and the adjustments needed to encourage people to work better.

The project sponsors need to clearly outline the essence of the proposed Transformation initiative, to realistically embed Change Management into the design of the program, and develop effective Change Management plans. An initial baseline of the expected effect of the program on people should be performed. The baseline also helps analyze the impact of the change program — in terms of skills inventory, head-count indications, adjustments in accountabilities and relationships, shifts in incentives and pay structures, and future learning needs.

2. Creating a Shared Need

Once the change and its impact has been delineated, the next thing to do is to create a shared understanding of the rationale for Transformation across the organization. To create a shared need for the Transformation endeavor, the change sponsor needs to build awareness of the necessity for change amongst the senior team, key stakeholders, and the entire organization; demonstrate to the people the benefits of change; and set up a feedback mechanism across the organization. The alignment afforded by developing a shared need for change helps build a strong footing for Transformation.

3. Developing a Shared Vision

An essential element of implementing transformation entails delineating a clear vision that outlines critical actions and the anticipated outcomes. It helps in encouraging and involving the workforce in the Transformation initiative, giving them a sense of purpose by becoming a part of something bigger. The vision of the organization after Transformation should be coherent with the company values and mission.

4. Leading the Change

This lever entails developing change leadership and implementation skills needed to drive and enable sustainable change. Engagement and commitment of senior leaders is essential for leading change. They are responsible for planning their and the entire workforce’s actions, demonstrating or role modeling the new mindsets and actions, designating program sponsors — e.g., business unit leaders who are enthusiastic about the Transformation initiative and also act as change agents — motivating others to support transformation, and setting up a road map for the change leaders to steer the organization to achieve the anticipated performance milestones.

Interested in learning more about these levers to Change Management? You can download an editable PowerPoint on 8 Levers to Change Management here on the Flevy documents marketplace.

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