Today’s CEOs Need a New Approach to Prepare the Hearts and Minds of Employees for Change

By Mostafa Sayyadi and Michael Provitera

This article proposes a range of ideas for successful organisational change in a world that has completely changed. The crucial drive for change for a new world is at the heart of business thinking today. A new definition of change is crucial for business success. The world that we once knew no longer exists. What does exist is you reading this article.

Introduction

Change has been posited as very important today by top journals such as California Management Review, Harvard Business Review, Stanford Social Innovation Review, and Rutgers Business Review, but what exactly does the change mean to you as a CEO? For example, the COVID-19 change is so broad that readers view it as changing everything from the price of food to the remote working environment. Many CEOs sanctify organisational change. But why? One reason is that organisational change is one of the most difficult management issues to grasp, and while executives are contemplating change they are being usurped by their boss or by the competition.^1,2,3 When managers decide to lead change, they face many problems, such as countless tensions or opposition from employees. Successful change requires leading the hearts and minds of employees. Only then will leaders get buy-in. In fact, if the employees do not buy into the change with their hearts and minds and do not accept it, real change will not happen. Today, we address the vital question: how can CEOs prepare the hearts and minds of employees for change? To answer this question, executives need to manage the soft side of change. This article reflects on the soft side of change as the most important factor in preparing the hearts and minds of employees. Managing the soft side of organisational change helps employees understand that change is mandatory in order to remain competitive and will not eliminate their jobs, and they will then buy into the change.

The problem is that people usually get used to what they have and what they do, and it is hard for them to change their habits. James G. Clawson, an expert in habitual leadership and human responsiveness, found that 95 per cent of leaders are creatures of habit.⁴ Life in villages is the best example of this inner tendency of humans. In villages, people usually inherit the habits of the past, get used to what their fathers and mothers did, and use them in their daily lives. One of the ways to change previous habits is by conducting a deep dive. A deep dive means that executives need to change how they think about change. CEOs need to be comfortable with change and get in touch with their unconscious biases and how to address their biases proactively. They must be aware that the new era of business has resulted in two kinds of corporate lives. In the first kind, corporations get ready to accept the change and move toward a bright future with continuous change. In the second, corporations refuse to accept change, and they are eventually banished, or even vanished, from the competitive scene. This new era of business states a clear message to all companies: either change and adopt new ways or die on the corporate life cycle.

The COVID-19 crisis made CEOs feel that organisations must be prepared for change in a continuous manner.^5,6,7,8 They changed the organisational risk management title to non-financial risk management, which we feel is more appropriate today. A successful organisational change requires focusing on both soft and hard aspects. The hard side of change refers to those factors that directly affect the success of organisational change projects. In particular, these factors are typical project elements, such as objectives, budget, schedule, etc. On the other side of the spectrum, the soft side of change refers to those factors that indirectly affect the success of organisational change projects. These factors include human or social factors of change, such as leadership, organisational culture, human capital, organisational capital, and social capital. This side of change is often hidden from the eyes of CEOs. The soft side of change is actually the missing link that can prepare the hearts and minds of employees to accept change.^9,10,11 Although this side of change indirectly affects the success of change projects, it is deeply rooted in people and organisations. In fact, ignoring non-financial risk management would lead organisations to fail. Psychological costs of individuals are a non-finance risk that organisations must not be willing to take.

Managing the Soft Side of Organisational Change in Four Steps

Many CEOs are concerned with the bottom-line financials (i.e., the hard side of change) and ignore non-financial risk management (i.e., the soft side of change). They should be aware that changes can create a cognitive and emotional load, and may also have psychological costs. This scepticism eventually leads to the resistance of the employees against the intangible issues because they are concerned about getting a pay cut or being terminated. In contrast, organisational change projects that also consider the soft side of change may be more competitive and attract better talent.^12,13,14 To more effectively manage the soft side of organisational change, we suggest CEOs consider the four steps below. These four steps can make organisational change more effective and improve the results of change for companies.

1. Dividing A Change Project Into Several Smaller Steps

CEOs can effectively link the hard and soft aspects of organisational change. As an example of this debate, one factor of the hard side of change is the timeline determined for the project. Too much focus on this factor can actually prevent innovation and does not usually bring optimal results. Quotas are important to meet and, in some cases, exceed. The key point is that budgets need to be adhered to but there has to be a place for keeping employees skilled, continuously learning, and improving. To do this, we suggest that executives divide an organisational change project into several smaller steps which, at first, make the project appear longer but, in actuality, eventually create more innovation. This can also develop a culture of sharing in the success of the project and subsequently strengthen the soft side of organisational change. This culture of sharing in the success of the project is the glue that keeps the organisational members together and develops their participation through cohesive collaboration in which the entire project is rowing in the same direction. As a result, this also leads to more acceptance from the employees and also provides better results for the organisation. Therefore, the first step is to divide an organisational change project into several smaller steps so as to provide more detailed information about each step (development of a culture of sharing in the success of the project).

2. Building Teams Made Up Of The Organisation’s Best Talent For A Change Project

The next key step is building teams made up of the organisation’s best talent to implement change projects. CEOs should develop effective teams to create a set of the best skills, achievements, experience, and the kind of persons that are aligned with the culture to enhance the effectiveness of the soft side of change. Like football coaches, many CEOs have looked at organisational change projects as preliminary games. In fact, they do not want to use their stars in these projects, because they have designated other high-end tasks for them. This is one of the main reasons for the failure of change projects. They should value the effectiveness of change projects as much as their employees’ high-end tasks. In doing this, our suggestion for CEOs to improve the effectiveness of change projects is that they use their best talent in organisational activities to tap into their innovation ability. Prioritisation of a mix of highly talented employees coupled with young, up-and-coming professionals makes the best team and also prepares their minds and hearts (i.e., the soft side of change) to accept change. This type of team leads to successful organisational change projects, which strongly depend on intellectual capital.

3. Supporting From The Top

The third step is that senior executives’ support for innovation in organisational change projects is crucial. While working at Salomon Brothers Inc., senior leaders wanted to develop a teamwork platform for operations in Tampa. The project was successful until some senior leaders did not buy into the team concept and wanted people to be accountable at the individual level. Senior executives across the globe should be aware that, without approval from above, nothing will change and resistance will set in. At Salomon Brothers Inc., senior leadership designed a structure of teams to run the operations for each division. Over time, senior managers could not effectively develop teamwork, and the incentive lost faith, placing a limit on innovation and creativity. Salomon Brothers Inc. was eventually taken over. At Salomon in Tampa, employees complained that the senior executives did not support their innovative initiatives. Senior executives in different companies often underestimate the crucial role they can play as inspiring leaders. The lack of inspiring leadership from these senior executives often leads to more costs and errors in organisational change. At Salomon Brothers Inc., senior leaders attempted to correct this common mistake and adopt an inspiring approach that ultimately reduced costs and greatly improved the overall performance of employees. However, it was too late; the company was already on the chopping block.

4. Developing A Unique Vision And Mission For A Change Project

Finally, when evaluating organisational change projects (both the hard and soft sides) and analysing the results with the aim of correcting mistakes and moving forward, some organisational change projects do not achieve the expected results. To solve this problem, executives should develop a unique vision and mission for a project of importance. This way, each organisation can implement its organisational change projects with the aim of achieving its mission and vision.

Figure 1 Four Steps for Managing the Soft Side of Organisational Change

Conclusions

By addressing both the hard and soft sides of change, CEOs can reap buy-in from followers who need to focus on change efforts and be successful. Too many employees simply rely on their leaders to implement change and focus on their unique jobs instead of focusing on the entire system and improving it. The key is for executives to prepare the hearts and minds of employees to embrace and accept change. The hearts and minds of the employees are what we call in this article the soft side of change. Executives can break down each category of change and address each component as an improved ingredient in a recipe for success. For example, they can focus on financial resources or financial risk factors to improve the hard side of change. They can also improve the effectiveness of corporate leadership and organisational culture to address the soft side of change.

About the Authors

Mostafa Sayyadi works with senior business leaders to effectively develop innovation in companies, and helps companies from start-ups to the Fortune 100 succeed by improving the effectiveness of their leaders. He is a business book author and a long-time contributor to top management journals and his work has been featured in top-flight publications.

Michael J. Provitera is an associate professor of organisational behaviour at Barry University, Miami, FL. He received a BS with a major in Marketing and a minor in Economics at the City University of New York in 1985. In 1989, while concurrently working on Wall Street as a junior executive, Dr Provitera earned his MBA in Finance from St John’s University in Jamaica, Queens, New York. He obtained his DBA from Nova Southeastern University. Michael J. Provitera is quoted frequently in the national media.

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