Four principles of organizational change

Four principles of organizational change

Change is an absolutely critical part of business. And yes, your company does need to change, preferably now and not later, when you have no other choice.

People love familiarity and patterns. They cling to them. The phenomenon is so entrenched it can only be chalked up to human nature. But while managing change can sometimes feel like moving a mountain, it can also be incredibly rewarding, particularly when you start seeing results. Ultimately, implementing change comes down to embracing the following four practices:

1. Attach every change initiative to a clear purpose or goal. Change for change’s sake is stupid and enervating.

Change should be a relatively orderly process, but for that to occur, people have to understand why change is necessary and how changes will affect them. This is easier, of course, when the problems are obvious—earnings are collapsing or a competitor has dropped prices 20%.

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But sometimes the need for change isn’t immediately apparent. Competitive threats seem to be emerging, but you don’t know for certain, and still, you have to respond. In those cases, relentless communication about the business rationale for change, reinforced with lots of data, is the best ammunition you have.

The larger your firm, the more challenging it will be to communicate the need for change. In big firms, calls for change are often greeted non-committally. After all, if the firm has been through enough change programmes, employees will assume you’ll go away if they just wait long enough.

Stick to your guns—your solid, persuasive business case. Over time, logic will win out.

2. Hire and promote only true believers and get-on-with-it types.

Everyone in business claims to like change. To say otherwise would be career suicide. But by my estimate, at least 10% of all business people are true change agents. Once the next group—around 70-80% of people working in business—is convinced that change is necessary, they’ll say, “OK already, get on with it." The rest are resisters.

To make change happen, companies must actively hire and promote only true believers and get-on-with-its. But with everyone claiming to like change, how can you tell who is for real?

Luckily, change agents usually make themselves known. They’re typically brash, high-energy and more than a little paranoid about the future. They often invent change initiatives on their own or ask to lead them. Invariably, they are curious and forward-looking.

These people have a certain fearlessness about the unknown. If they fail, they know they can pick themselves up, dust themselves off and move on. They’re thick-skinned about risk, which allows them to make bold decisions without a lot of data.

3. Ferret out and remove the resisters, even if their performance is satisfactory.

This is the hardest of the four practices to implement. It’s tough to let anyone go, but it’s particularly difficult to fire people who are not actually screwing up and may in fact be doing quite well. But in any organization, there are people who will not accept change, no matter how sound your case is. They are so invested—emotionally, intellectually, or politically—in the status quo that they cannot see a way to improve anything. These people usually have to go.

That may sound harsh, but you’re not doing anyone a favour by keeping resisters in your organization. They foster an underground resistance and lower the morale of the people who support change. They’re wasting their own time: they’re working at a company where they don’t agree with or share in the vision, and they should be encouraged to find one where they do.

4. Look at car wrecks.

Most companies capitalize on obvious opportunities. When a competitor fails, they move in on their customers. When a new technology emerges, they invest in it and create product line extensions.

But to be a real change organization, you also have to look at bolder, scarier, more unpredictable events, assess the opportunities they present and make the most of them. Fostering this capability takes a certain determination, but the rewards can be huge.

Take the 1997 Asian financial crisis. Currency traders certainly capitalized on this awful event; they live on exploiting change. But they’re not the only ones who should do this.

General Electric Co. had real success buying undervalued Thai auto loans in this period. Others prospered by buying real estate at fire sale prices. Bankruptcies are another type of calamity that reveal all kinds of opportunities. Of course, they’re tragic to the employees. Jobs are lost, and pensions disappear into thin air. But jobs and futures can also be created from the cinders.

With all the noise out there about change, it’s easy to get overwhelmed and confused. But these are the only four practices that matter. That’s it. There’s nothing to be afraid of.


Write to Jack & Suzy

Jack and Suzy are eager to hear about your career dilemmas and challenges at work, and look forward to answering some of your questions in future columns. Jack and Suzy Welch are the authors of the international best-seller, Winning. Their latest book is Winning: The Answers: Confronting 74 of the Toughest Questions in Business Today. Mint readers can email them questions at Please include your name, occupation and city. Only select questions will be answered.


Adapted from Winning (HarperBusiness Publishers, 2005) by Jack Welch with Suzy Welch