The psychology of change in organizationsIndividual behavior change drives organizational change

Individual behavior change drives organizational change

Leaders today must understand and apply the knowledge of behavioral psychology and the lessons from brain science to manage organizational change successfully. In the past, efforts at organizational change which has focused on the structural aspects of organizations have systematically failed because they have neglected the reality that change doesn't happen without individual people changing their thinking, beliefs and behavior.

In an article in the McKinsey Quarterly, Emily Lawson and Colin Price argue that change success in large organizations depends on persuading hundreds or thousands of groups and individuals to change the way they work, a transformation people will accept only if they can be persuaded to think differently about their jobs. In effect, CEOs must alter the mind-sets of their employees—no easy task.

I would add to their conclusion that individuals in organizations, to embrace change, must also engage in a process that changes how they think about themselves, not just their job.

Lawson and Price ask what if the only way a business can reach its higher performance goals is to change the way its people behave across the board? Suppose that it can become more competitive only by changing its culture fundamentally—from being reactive to proactive, hierarchical to collegial, or introspective to externally focused, for instance. Since the collective culture of an organization, strictly speaking, is an aggregate of what is common to all of its group and individual mind-sets, such a transformation entails changing the minds of hundreds or thousands of people. Although breakthroughs have been made in explaining why people think and behave as they do, these insights have in general been applied to business only piecemeal and haven’t had a widespread effect, Lawson and Price contend.

Lawson and Price identify four conditions for changing employee mind-sets: Employees will alter their mind-sets only if they see the point of the change and agree with it—at least enough to give it a try; the surrounding structures (reward and recognition systems, for example) must be in tune with the new behavior; employees must have the skills to do what it requires; and finally, they must see people they respect modeling it actively. Each of these conditions is realized independently; together they add up to a way of changing the behavior of people in organizations by changing attitudes about what can and should happen at work.

It's been well established in psychological research that a distressing mental state arises when people find that their beliefs are inconsistent with their actions--something called cognitive dissonance. The implication for this finding for organizations is that if people believe in its overall purpose and it's in alignment with their own life purposes, they will be more inclined to change their individual behaviors. People must also understand the role of their actions in the unfolding drama of the company’s fortunes and believe that it is worthwhile for them to play a part. It isn’t enough to tell employees that they will have to do things differently. Anyone leading a major change program must take the time to think through its "story"—what makes it worth undertaking—and to explain that story to all of the people involved in making change happen, so that their contributions make sense to them as individuals.

Organizational designers broadly agree that reporting structures, management and operational processes, and measurement procedures—setting targets, measuring performance, and granting financial and nonfinancial rewards—must be consistent with the behavior that people are asked to embrace. When a company’s goals for new behavior are not reinforced, employees are less likely to adopt it consistently; if managers are urged to spend more time coaching junior staff, for instance, but coaching doesn’t figure in the performance scorecards of managers, they are not likely to bother.

Much of the research in management sciences and organizational behavior from the past has been criticized for lacking in relevance and meaning, and focusing too much on the technical aspects of organizations, akin to "rearranging deck chairs." Researchers Thomas and Vincent Wright, writing in the Academy of Management Journal argue that the reason for the apparent lack of relevance and negative focus on the workplace has been the failure of much organizational research to focus anything other than cost-benefit analysis or efficiency, epitomized by the committed-to-management (CMR) perspective. This perspective has emphasized the excessive focus on shareholder value as the only measure of organizational performance.

Thomas Wright in his article in the Journal of Organizational Behavior, argues that management and organizational studies should focus on cost-benefit analysis from a human asset perspective, on issues such as positive emotional states of employees, and on employee strengths rather than weaknesses.

Psychologist Barbara Frederickson's "broaden-and-build" theory of positive emotions is relevant here. She states that a number of positive emotions, such as joy, contentment and happiness all share the ability to broaden individuals’ thinking and action. In addition, these positive emotions assist in building the individual’s enduring personal resources. This expanded capacity is central to an individual's ability to grow and prosper, and add value to an organization.

Aubrey C. Daniels, one of the world's foremost authorities on management and human performance, outlines management practices that are destructive to organizations during boom or bust times, in his outstanding book, Oops! 13 Management Practices That Waste Time and Money (and what to do instead). Daniels points out that few managers look for behavioral data to affect employee performance because most manager know very little about the science of behavior and recent brain science or neuroscience, and very few business programs in universities teach it. He says another reason why organizations are fundamentally flawed from a behavioral perspective is that they were designed by people--those with financial expertise--who have only one purpose in mind, to make money. He says that "how employees are paid, appraised, rewarded, and recognized have financial implications," but when designed without an understanding of human behavior, the results can be destructive. For example, there is a mountain of research to show that employees are not primarily motivated by financial rewards over the long term, yet we continue to use that as a management motivational strategy.

Some valuable insights come from John Medina, a molecular biologist, published in the Harvard Business Review in May 2008. Medina is an author of Brain Rules: 12 Principles For Surviving and Thriving at Work, Home and School. Medina says "the brain is so sensitive to external experiences that you can literally rewire it through exposure to environmental influences." For example, we know that stress hurts the brain and that has a huge impact on productivity. Medina says that enduring continuing stress is like trying to fly an airplane under water.

"Neuroleadership,” is a term coined by David Rock, a leadership consultant and author of Quiet Leadership: Six Steps to Transforming Leadership At Work. Rock and Jeffrey Schwartz, a research scientist at UCLA, are applying neuroscience concepts to leadership. For example, by emphasizing mindful, focused attention on new management practices, rather than fixing old habits that don't work, leaders can actually rewire their brains. McKinsey and Company is now incorporating their ideas into client workshops. An article by Rock and Schwartz published in Strategy and Business Journal, was the publication’s most downloaded article in 2006.

Improvements in brain analysis technology has allowed researchers to track the energy of a thought coursing through the brain in the same way they can track blood flowing through the circulatory system. Change lights up the prefrontalal cortex, which is fast and agile. Overloading the prefrontal cortex can generate fatigue, fear and anger, because of the cortex's connection to the emotion center of the brain, the amygdala.

Rock and Schwartz state:

"The traditional command-and-control style of management doesn't lead to permanent changes in behavior. Ordering people to change and them telling them how to do it fires the prefrontal cortex’s hair trigger connection to the amygdala. The more you try to convince people that you’re right and they're wrong, the more they push back. The brain will try to defend itself from threats. Our brains are so complex that it is rare for us to be able to see any situation in exactly the same way as someone else. The way to get past the prefrontal cortex’s defenses is to help people come to their own resolution regarding the concepts causing through their prefrontal cortex to bristle."

Dr. Robert Cooper, of Stanford Business School writing in Strategy and Leadership Journal, points out that we actually have three brains--the one in our head, the one in our gut and the one in our heart, all of which have massive number of neurons. He claims that the highest reasoning involves all three brains working together.

What does all this add up to? This: Traditional change in management tactics in organizations are based more on animal training than on human psychology and neuroscience. Leaders promise bonuses and promotions (the carrot) for those who go along with the changes, and punish those (the stick) who don't with less important jobs or even job loss. This kind of managerial behavior flies in the face of evidence that shows that people's primary motivation in the workplace is neither money or advancement but rather a personal interest in their jobs, a good environment to work in and fulfilling relationships with their boss and colleagues.