Gartner for HR

Changing ChangeManagement
An open-source approach

By Marcus Chiu andHeather Salerno© 2019 Gartner, Inc. and/or its affiliates. All rights reserved. CM_698472

“The art of progress is to preserve order amid change and to preserve changeamid order,” wrote the famed British mathematician and philosopher Alfred
North Whitehead.1 This observation couldn’t be more applicable in today’s
world of constant change. The most successful organizations in the future willbe those that can effectively preserve order during major changes, whether
through merger or acquisition, leadership transition or even culture change.
Most organizations, however, struggle to adapt to this new environment; only
one-third of change initiatives succeed. At the same time, leaders expect
more changes to occur, and CEOs are pressuring CHROs to help implement
them faster. So what is wrong with current change management strategies?
And how can organizations evolve to not only survive but actually thrive in
the global economy?

Why change management is broken
More than 80% of organizations manage change from the top down.
This typically means that senior leaders exclusively make strategic
decisions, create implementation plans, and then roll out organizationwide
communication to gain workforce buy-in. This straightforward strategy
once enabled rapid change because organizations were largely vertical;
leaders held all the key information, and the workforce was structured
in clear, hierarchical reporting lines. In that environment, top-downchange strategies mirrored organizations’ structure and workflow.
Compare that to how things look today:
Organizations have more complex, matrixed reporting lines
and interdependencies.
Employees have more access to information about their jobs,business environment, and each other.
The upshot? Top-down change strategies are fundamentally
disconnected from today’s workflow, and they’re slowing organizations
down. Sixty-six percent of CHROs are dissatisfied with the speed ofchange implementation. Organizations need a better path forwardin this evolving change environment.

1

Alfred North Whitehead, “Process and Reality” (New York: The Free Press, 1978).

© 2019 Gartner, Inc. and/or its affiliates. All rights reserved. CM_698472

Making change management work
In our survey of more than 6,500 employees and over 100 CHROs aroundthe globe, we found that the best organizations rely on their workforce,
not just executives, to lead change. These organizations moved awayfrom top-down change management toward more inclusive strategies
by making three significant shifts:
Leaders engaged the workforce to co-create
strategic decisions.
Employees were responsible for planning how to
implement the change.
Communication encouraged open conversation
about the change.
These shifts are the key tenets of an open-source approach to change.
The term “open source” originated in the software industry in the ’90s,
but has since been applied to other fields. An open-source approach insoftware had two goals: Make software accessible for everyone, andimprove software by allowing anyone to quickly edit and fix bugs (e.g.,Wikipedia and Linux). But open source is not a free-for-all; Wikipedia, forexample, is governed by a vetted group of users who use a set of policies
and guidelines to determine when a change is right.
By applying open-source principles to change management, organizations
can increase their probability of change success from 34% to 58%.
Furthermore, with open-source change, companies can change more quickly,
the workforce is more engaged, and employees are more likely to stay.
This shouldn’t be surprising. After all, open-source change strategies are,by definition, more inclusive of expertise and different perspectives, closer
to the actual workflow and constantly evolving through collective action.

Evolving through open-source change
When top-down changes fail to work, leaders most often blame theworkforce. Yet 64% of employees already possess the skills required
to change successfully, and 74% say they are willing to support thechange. Despite this, only one-quarter of employees are able tochange the way they work when managed from the top down.

© 2019 Gartner, Inc. and/or its affiliates. All rights reserved. CM_698472

Open-source principles
can increase change
success from

34% to 58%

Implementation time
can decrease by

33%

Employee engagement
can increase by

38%

Intent to stay canincrease by46%

Heads of HR and their teams are uniquely positioned toengage the workforce using an open-source approach tochange. Here’s how you can do it, along with lessons fromthree organizations that have successfully done so.

1. Co-create change strategy.
Leaders recognize the value of employees’ input regarding customer needs
and how work is done on the ground. However, while 74% of leaders say they
involved employees in creating change strategy, only 42% of employees feelthey were truly included. Leaders fear being overwhelmed by opinions whendeadlines have to be met, so they typically set change strategies and solicit
employee feedback after decisions have been made. But solicitation is notco-creation.
So how do organizations include more employees in co-creating change
strategies without being paralyzed by opinion overload?
Faced with a rapidly changing organizational structure, a software company
needed a better decision-making process. The outcome was called the Open
Decision Framework, which all employees are introduced to on their firstday. The tool provides guidelines for leaders to think about who should beincluded when making decisions and how to include them. Rather than giving
individuals more say based on rank and tenure, the framework asks leadersto consider factors such as expertise, impact and customer-centricity.
The framework also ensures a level of transparency around how decisions
are made, not just who is involved. No one is surprised by a decision, andeverybody trusts it is the best option, even if it is not always liked. For thecompany, open decision making works because it’s a meritocracy, not ademocracy, and the best ideas always win, no matter where they come from.
This approach might slightly slow decision making, but more time spent
making better decisions upfront translates into greater time savings down
the road. Go slow to go fast — especially when the stakes are as high as
they are during change.

“[The company] strives for change
management to happen during thedesign process, not during execution.”
CEO, Software Company© 2019 Gartner, Inc. and/or its affiliates. All rights reserved. CM_698472

Key take-aways to co-createchange strategy
Early transparency: Don’t justshare your final change vision;
be open about how you will getthere, even before you know
where “there” is.
Selective participation: Don’t
include everyone, just those whoare most relevant to the issue.
Differentiated involvement:
Don’t use a uniform approachto gather input. Instead, usedifferent methods to involve
different people as needs change.

2. Shift implementation planning to employees.
To create consistent and fast change, leaders typically decide how to
implement changes and then communicate directions to the workforce.
But this method no longer works in the current change environment.
Seventy-two percent of leaders we surveyed admit they do not knowwhat employees must do differently during change because they are
too disconnected from the work, and priorities change too quickly forleaders to catch up.
Shifting implementation planning to employees can boost probability ofchange success by 12%. Successful organizations empower employees toexperiment with solutions and new ideas but also set guardrails to prevent
actions from derailing the change.
Another software company’s goal setting takes its vision and values fromthe CEO, and employees at every level can use that foundation to set theirown vision along with what they will do to get there, the obstacles they may
face, and the success metrics they will be measured against. Employees canalso see their colleagues’ goals to make sure everyone is aligned and to holdeach other accountable.
With this freedom to work within guardrails, employees can more quickly
execute change, spot the barriers slowing implementation, and share bestpractices throughout the company. This gives leaders and managers moretime to support employees by removing obstacles and ensuring alignment
on strategic issues. With this system, it only takes six weeks for the workforceof more than 20,000 to realign priorities when major changes occur.
You don’t need to replicate this system to be just as agile. Shift
implementation planning to employees, and set the right guardrails
to hold them accountable, and your employees will be able tosuccessfully execute change on their own.

“One of the side effects … is that there is
newfound employee freedom. ... The
manager can then say, ‘Fantastic — let meknow how I can help,’ and the employee
can go off and execute it.”
EVP of Employee Success, Software Company© 2019 Gartner, Inc. and/or its affiliates. All rights reserved. CM_698472

Key take-aways to shiftownership of implementation
planning to employees
Set guardrails and provide
support: Have leaders definestrategic goals and establish
degrees of employee ownership.
Let employees lead change
implementation: Allow
employees to define successmetrics, obstacles, tasks andhow they collaborate.

Top-Down Change Strategies Reduce Understandingof Change in the Workforce
Percentage of Respondents Understanding Change by Seniority
80%

63%

60%

51%
40%

20%

0%
Functional
HeadGeneralManager

Executive/Senior/Vice President

Open-Source Strategy

Department
Head/DirectorTop-Down Strategy

n = 6,686
Source: Gartner 2016 Workforce Change Survey© 2019 Gartner, Inc. and/or its affiliates. All rights reserved. CM_698472

MidlevelManagerMidlevel
Nonmanager

Entry-Level
Manager

Entry-Level
Nonmanager

3. Focus communication on “talking,” not “telling.”
Most organizations communicate change from the top down. Leaders framechange as a positive story to get employee buy-in, and they tell it frequently
to drive understanding. But telling — or, at times, commanding — employees
does not drive understanding or commitment to change. Instead, we foundthat top-down communication actually reduces employees’ understanding ofchange down the line and increases employee anger, anxiety and resistancetoward the change.
A healthcare insurance company discovered, as it prepared for a majorchange, that top-down communication made its employees feel like thechange was happening to them. In response, the company empowered its
workforce to start authentic conversations that personalized the change andgave them a sense of ownership for it.
The company held change-management workshops for employees and,rather than discouraging employees from sharing any negative feelings about
the change, encouraged them to express their anxieties as a group. By firstacknowledging their negative emotions, employees were able to move on
and begin exploring rational responses to change.
The workshops didn’t stop there. To really drive its employees to change, thecompany provided question-based action plans that encouraged employees
to take control. Questions included, “What changes could result from thisinitiative?”; “How will my peers be impacted?”; and “What new skills will Ineed?” If employees did not know the answer, they could plan how to findit and set a deadline.
By using the questions to initiate two-way conversations with peers,managers, and leaders throughout the organization, employees became
seekers — not just receivers — of change information. Doing so allowed
the entire workforce to quickly address resistance, move forward anddrive change.

“It’s this idea of empowering individuals —to say, ‘It’s OK. We’re giving you permissionto goout and get answers for yourself.’”
VP, Organizational Effectiveness and Strategic Project Management,
Healthcare Insurance Company© 2019 Gartner, Inc. and/or its affiliates. All rights reserved. CM_698472

Key take-aways to focus
communication on “talking”
Address negative emotions
openly: Allow employees toshare negative reactions toimprove feelings of control.
Support peer-to-peer
interactions: Encourage
employees to share change
insights with the rest of theworkforce.
Build dialogue: Give
employees questions todrive open conversations
and action plans for change.

Top-down communication actually reduces
employees’ understanding of change down the line.
What should CHROs be doing now?
In today’s world of constant change, success requires engaging the entire
workforce, not just a handful of leaders. Heads of HR are in the uniqueposition to adopt open source change management by shifting to:
1. Co-created change strategy
2. Employee-owned implementation planning
3. Communication focused on “talking”
These shifts will engage employees throughout the change process andlead to better, faster and more sustained outcomes.
Still, as with all change management, CHROs can’t do it alone. Discuss thesethree action steps at your next HR leadership meeting to prepare to makeyour organization’s next change open source:
1. Build a business case for senior leaders to adopt open-source approaches
by discussing how they could improve and why it matters.
2. Engage the workforce to gather feedback on why change initiatives are
moving too slowly and how to address those challenges.
3. Pilot an initiative to improve your change management in any one of thethree key shifts for open-source change.

© 2019 Gartner, Inc. and/or its affiliates. All rights reserved. CM_698472

Are you ready for thenext change?
For a change to succeed, makesure you engage the workforce with
an open-source change approach.