Making change work.

Re-engineering lately has taken its share of abuse in the popular business press. Many organizations, after having gone through elaborate re-engineering programs and having spent countless dollars, report little return on their investments. Even two major proponents of the re-engineering movement, Mike Hammer and James Champy, have admitted that 50 to 70 percent of all re-engineering efforts will fail to achieve their desired results.

For those who have worked with organizations facing major change, the importance of communication is hardly new. More than 50 years ago, in "The Function of the Executive," former AT&T executive Chester Barnard wrote, "In any exhaustive theory of organization, communication would occupy a central place." Taking it a step further, Barnard is said to have advocated that the executive's first function is to communicate. Given the amount of time, effort and resources spent on re-engineering efforts, it would be counter-productive for those in charge to abdicate this important strategic imperative.

Still excuses abound: "They won't understand."

"We don't have enough budget to worry about communication."

"People might be threatened if we tell them too much too soon."

Others in charge offer a different kind of rationale: "We sent a memo. We sent a video. We gave them T-shirts, coffee mugs, etc. What else do we need to do?"

While such rationalizations may appear to some to be valid reasons for not developing a comprehensive communication strategy as part of a re-engineering effort, experience suggests that without direct, frequent and face-to-face communication with all affected stakeholders, individuals will develop their own perceptions - often misperceptions - of the effort.

For communication to effectively benefit a re-engineering effort, four critical issues must be shared among key stakeholders within the organization:

* Communicating the process for change

* Communicating the need for change

* Communicating the business case for change

* Communicating the plan for change.

Communicating the process for change

The startup of a re-engineering effort is often a particularly confusing time for an organization. Individuals often central to the day-to-day operations are pulled off their normal job responsibilities and asked to focus their attention on a new project. It is very common for employees to question the effort, asking:

"What is re-engineering?"

"How is re-engineering different from other efforts going on within the organization?"

"How is this going to affect me and my job?"

Further, the presence of outside facilitators and consultants often heightens organizational anxiety.

During the startup phase, the project sponsor, the project leader and other senior managers should be visible, vocal and up-front. Specifically, they should communicate the purpose of the re-engineering effort, the areas to be examined during the effort, the members of the re-engineering team, and the expected time frame of the project. Employees should be provided the opportunity to ask questions about the process and offered a variety of methods to give feedback to the re-engineering team and senior management.

At the early stages of the project, senior managers may not have all the answers. Therefore, they need to be candid about the fact that although the future is not clearly defined, employees will be continually informed throughout the progress of the effort.

To kick off its re-engineering effort, one organization we worked with prepared a series of written communications, followed shortly there-after by a "re-engineering road show" that visited each of the company's manufacturing sites. Each session, which lasted for approximately two hours, was run by a member of the steering committee, the leader of the re-engineering effort, and several members of the re-engineering team. Each member gave a short presentation and then spent the rest of the time answering questions from the audience. Face-to-face communication allowed some initial concerns to be raised in a forum where they could be addressed publicly. Clearly, memos and articles in the company newspaper, while valuable, could not have accomplished this. Further, these sessions served as building blocks in developing trust among employees and made it easier for the re-engineering teams to collect data during the early stages of the effort.

Communicating the need for change

Perhaps the single most important goal of effective communication during the early stages of re-engineering is to create a sense of urgency, or what we call a "burning platform": a clearly defined set of propositions that state that the organization can no longer continue to conduct its business in its current manner. For people to be willing to change their modus operandi (and, particularly, their attitudes, beliefs and behaviors), they must clearly understand and internalize why the organization needs to change and what the ramifications would be if the status quo were maintained.

Customer data often can be used to highlight the need for change. In one manufacturing organization undergoing the re-engineering of its order fulfillment process, videotapes were made of customer focus groups. These videos were edited and then shared with members of the re-engineering team and with groups affected by the re-engineering process. When faced with customers who were willing to switch to a competing company because of problems with order entry, packaging and shipping, employees took a much more active role in the re-engineering process and became more receptive to recommendations made by the re-engineering team. They were able to see the direct connection between the business need for change within the organization and the need to protect their own livelihood.

Another company invited a marketing research firm to speak to 500 of its top managers regarding their customer performance. When presented with the facts that not only was the company underperforming within its own industry, but also that competing technologies were further eroding its market share, both operating and staff personnel were clearly motivated to change the status quo. By openly and clearly reinforcing the need for change, the organization was able to solidify its case for how it was going to recapture this market share.

Communicating the business case for change

After the re-engineering teams have studied the current processes and work environment and have begun to spell out directions for redesign, communication is vital to establish credibility for the change. Re-engineering teams must share with senior management and key functional managers how the current processes are affecting business performance and how the proposed changes will improve the present situation. Throughout the process, the steering committee should be constantly reminded to focus on the future rather than dwelling on the organization's current state.

Unfortunately, these meetings often are difficult for both re-engineering team members and their audiences. The results of a detailed assessment might provoke a great deal of consternation among leaders within the organization. When faced with often unpleasant facts regarding performance within their own realms of control, senior managers may attempt, for example, to publicly discredit the data being presented or to quietly influence re-engineering team members to suppress relevant data.

In one organization we worked with, the CEO and those who reported directly to him felt threatened by the results presented by a re-engineering team. During the presentation, these individuals made every attempt to invalidate the findings and question the ability of the working team. Although just months before they had instructed this team to "think outside the box," their lack of support sent a clear message to the re-engineering team and organization as a whole: "Questioning the status quo is dangerous both for this company and for your careers." Team members were naturally reluctant to spend more time and effort on the project, and the re-engineering effort stalled.

To prevent a situation like this, the leader of the re-engineering effort should meet with steering committee members and affected senior managers one-on-one to discuss the team's findings. This strategy gives individuals time to digest the material and air their concerns privately. After all of the one-on-one meetings have been held, the steering committee should meet to affirm the assessment results.

Communicating the plan for change

Once re-engineering teams have redesigned their processes and are preparing to implement their recommendations, communication becomes even more critical for achieving buy-in from those affected by the change. It is at this stage of the re-engineering we find that many clients realize the importance of pulling together a communication strategy if they did not effectively communicate during earlier stages of the project. The radical changes brought about by re-engineering often require wholesale changes to core operations of an organization. To make changes stick, it is critical that individuals understand how their roles, expectations, responsibilities and reporting relationships will change in the new environment; what new skills they will need to perform their jobs; and how their performance will now be measured. Otherwise, they likely will actively resist the change or passively dismiss it as another management fad. Finally, those most affected by the change process need to believe there is something in it for them.

One strategy involved several different communication media. In the first step in the communication process, senior executives briefed several hundred of the top managers in the organization about the pilot effort and answered questions regarding its effect. Soon after this conference, senior managers held a series of face-to-face meetings with members of the pilot site and field and headquarters personnel affected by the change. These meetings were designed to address what was going to be different in the new environment as well as demonstrate senior management commitment to the re-engineering effort. Senior managers left ample time to address questions and illustrate sample scenarios regarding how the new working environment would function. The meetings were followed up with a special edition of the company magazine dedicated to the pilot effort. By taking the message to those who would be affected by the change, and involving them in the change process, the team was able to take a major step toward securing their support.

Change demands change

A client recently pointed out that "insanity is doing things the same old way and expecting different results." Re-engineering represents a radical departure from the way companies used to do business and requires a similar departure from the way they used to communicate. Communication during re-engineering involves more than informational memos and status reports. It requires that leaders establish a multi-directional communication process with a wide range of stakeholders, including those who might have been neglected during other change efforts.

Experience indicates that successful re-engineering efforts require new processes for communicating in all phases of the change effort, from planning through implementation. Without altering the way it communicates with its work force during times of major organizational change, the best management can hope for is a standoff with its employees. It should, however, prepare for the worst - risking failure and losing its opportunity to effect change within the organization. In short, the success of re-engineering depends on a successful communication strategy. As the CEO of a major corporation once said, "The essence of re-engineering is twofold: making the complex simple and having 'grown-up' conversations."

Barry K. Spiker is a vice president and Eric L. Lesser is an associate of Mercer Management Consulting, Inc. Both are based in the firm's Boston office.