Transcript

Nolan : Welcome to the negotiate X podcast: show number 20.

Aram : What do we know? What do we know we know? So if I go back to the old Donald Rumsfeld: known knowns. What do I know I don't know: the known unknowns and then the unknown unknowns, right? Which are always so dangerous, but it's interesting. But I think that what we look for in organizations; someone who can manage day to day things versus someone who can take us in a new direction, not necessarily the same person

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Nolan : Hello and welcome to the negotiate ex podcast. I am your co-host and co-founder, Nolan Martin. With me today is my good friend. Aram, Aram, sir. I'm excited. I know you are, because today we are talking about organizational change.

Aram : Yeah. Speaking of change, you’ve got a, you started a little growth...growth there on the face. What's that all about?

Nolan : Yeah, I'm, uh, officially on leave from the military, so, and Insha’allah! I don't get called in at some point and have to actually shave it, but hypothetically for the next six months, I should be able to let it grow for once in the last, I don't know, 15 years. So pretty exciting.

Aram : Very, very exciting. So...

Nolan : I have to talk to you about how to make it look so good though.

Aram : Well, I'll, I'll try to give you what tips I can.

Nolan : (laughs) All right. Well, today I am excited for this episode because one, I think that it, it definitely is very evident as we start looking about how organizations have to go through different stages and really have to adjust to, you know, the environment, it's this thing about organizational change and how companies can navigate that and especially deal with internal struggles they may have.

Aram : And I'd add to your statement what I hope becomes obvious for our listeners is that, so we're talking about organizational change. We're really talking about negotiating that change, and this is a... it's a negotiation in and of itself both, you know what you were just saying, internal and externally and am able to recognize it as such. So, yeah, we're going to talk a little bit of organizational dynamics here, but we're really talking about the negotiations that are involved.

Nolan : Yeah. So I think to best frame this for the audience is to... let's work big. So it may not sound like as we cover big, it actually deals with negotiations. But I think as we start to, you know, go more precise in this conversation, I think our audience will easily be able to see how negotiations is actually a major part of organisational change. How's that sound?

Aram : Yeah, that sounds great.

Nolan : All right. So big picture question, Aaron, what is organizational change?

Aram : So, what is organizational change? (laughs) So, you know, anytime a company or a business unit is going through some major alteration in some aspect of its organization or its business, and that could be structure, strategy, policies, operational procedures, technological, you know, integration, uh, or culture. And those things are, can be driven by internal or external factors. So such as changes in the market or customer needs, supply chain issues. We're certainly seeing that right now, or company leadership. That change that's required often involves a number or interconnected, complex, uh, issues.

Nolan : Okay. What are examples of complex issues that they're going to face?

Aram : Yeah, so complex issues are those often really, you know, ill-defined kind of ugly problem sets that.. that organizations face. They're problems that can be seen in different ways. They often have multiple solutions to them. So they're just not super clean. This isn't typical. Typically it's not day to day tactical stuff, although I can imagine it being. In the military, we might think of these complex issues that kind of demand the need for, again, what they demand the need for organizational change as being, you know, anticipating the future nature of armed conflict, the ‘Where's it going to occur?’ or ‘What is it going to look like?’, ‘How do we best need to maintain our force through training and equipping?’, and so on to be able to face that. In the business world, these complex issues that kind of drive the need for organizational change, very similar, right? It's... it can be things around managing costs and risk, anticipating shifts in... in innovation or particular companies, you know, industry. And so therefore, how do we hire and train and retain the very best talent? How do we make changes to our operations in order to meet those maybe current or future challenges? So those would be the examples of kind of the complex sorts of issues that drive the need for change.

Nolan : Yeah. So I think you said something that kind of sparked my interest. So obviously, you know, in the military, generally a new commander is going to come into the unit every two years or even possibly more frequent than that. And it seems like whenever they come in, they assess the environment, they figure out, okay, what are their priorities going to be? And then all of the organizations underneath them, you know, adapt their training plans to kind of meet the leader’s intent with how he kind of... how he or she kind of sees their command going. In the business world though, I don't think that, you know, a CEO is going to be swapping out every two years or even, you know, managers... higher level executive managers will probably be swapping out that much, although it's probably a little bit more than that. So kind of, how do you see the civilian side through all your consulting experience versus the military experience that you have with regards to organizational change?

Aram : Sure. So it may not, I think to your point, it may not…the issues may not be driven as much by changes in leadership as frequently as what you sometimes see in the military. You know, it's going to be driven more by  the factors that are occurring on the ground. So we can certainly think of examples from the last year and a half with COVID in any number of industries and those things are continuing today. So with supply chain concerns, I guess I think of the IT companies and such that may be having a hard time, uh, getting materials to build wafers or other... other components or even tools to make what they need. And so they're having to maybe think... rethink how they do their business to adjust to, again, those like shifting the industry, we see the same thing when consumer requirements and needs change. So if I were to maybe box some of those into, you know, into kind of components to maybe make it a little bit easier to digest for the listeners, I often think of information as being a key source of these complex issues that drive change. What do we know? What do we know we know. So if I go back to the old Donald Rumsfeld. Known knowns, “What do I know I don't know?”: the known unknowns and then the unknown unknowns, right which are always so dangerous, but what information data do we have? What do we not have Or maybe the data we have isn't super clean. It's not obvious what the conclusions are. So we have to take an investigative approach to kind of figuring out the information need, right? That's going to be a driver. People, as we, as we talked about people like so leaders, but also employees and customers who all come in with mental models and assumptions about what we should be doing. We can talk about it. At some point, you talk about cognitive biases, how those play in. Change always is going to impact people's identity. It often challenges values. It can disrupt things for people cognitively and affect their motivation and wellbeing. So those are factors that are playing into both the need for change, as well as what makes these issues complex. And again, I would say that crosses clearly into the business realm. And the last thing is that, you know, around time, there are factors of time that make these challenges difficult. So, you know, in the military, it's often a little shorter rate every two years something's occurring and we expect change to occur quickly. I used to hear, you know, a commander comes in and if they can't do anything in their first 30 days, right, in the business world, I'd say, you know, we tend to maybe take a little bit longer term perspective on those things. But time is a challenge for change. Never occurs as fast as we, as we believe it's going to. And even as we're going through the change, conditions are changing around us externally, politically, the economic environment and so forth, right? And therefore the assumptions we made at the beginning around the people, around the problem, around the information we have, all of that starting changing too.

Nolan : Yeah and I think, you know, something that we've... we've definitely learned in your basic business courses or anything like that is that if you don't change with the times, then essentially your business is likely going to die, right? And I think that we've seen that over time with even larger businesses, not to name a few, but Circuit City or Kmart or anything like that, so, the businesses that have survived, I mean, surely they have to know that change is coming in the future. So then why is it always seem that, you know, organizational change either has done ineffective or it's… or it comes as a surprise, I guess, to companies

Aram : If you were a chariot maker in Roman times you're not in business today. Okay. If you though, as a company saw yourself in the business of being a... I'm a transporter of people in Roman times, well, there's a chance that you could adjust with the times you could still be in business, you know, here, you know, 2000 years later, if you see yourself as such and you frame your... your business and the problem that you try to address every day in a different light. So I think that the truth is, is that many businesses don't see, they're not aware of the need that's coming. And then the other piece is they're not kind of how you frame what you're about and what you do can be problematic, right? And then maybe the third piece is a lot of companies just don't anticipate what I'll call resistance to change. And they're actually even surprised by it. And resistance can come in different forms.

Nolan : Yeah. So let's kind of break out that out. So I'm sure for resistance that, you know, individuals can resist change and then also organizations can resist change. Like if you have a pipeline within a company, it may be resistance to change as a whole. So I mean, is there a way that we can address that or at least identify that so that we can address it later? Like how would that work?

Aram : Yeah. So I think becoming aware of the resistance first and then anticipating where there's going to be resistance to an adjustment is important. Let's hit the organizational piece first because I... I did that a little bit with how we frame what we do. So when I think about sources of organizational change of resistance, organizational resistance, it's often rooted in how long is this going to take us to make this change? What's the cost to doing that? If we've got to pull certain lines, you know, offline to do things, uh, is there a cost to doing that? Sometimes our organizational structure is not really conducive to change. Organizations like the military, like higher-ed that can be somewhat bureaucratic at times, but that weren't set up to be, you know, very kind of fluid with change, not flat organizations, right? That can be challenged. Any sort of change that's maybe going to threaten our organizational traditions and norms. Again, if we saw ourselves as like the best chariot makers in the world, right? And that's... that's our identity. Well, then that's going to be really hard to adjust. If we see ourselves as people who deliver on, you know, the very best mode of transportation and we're going to flex as things change and technology advances, well, then it's a little easier. I'm always reminded on anything that gets to traditions and norms and culture and the challenges there, Peter Drucker's comment, which is, you know, “Culture eats strategy for breakfast”. That even the best organizational strategies have a hard time standing up against culture. I was... I was part of a change at a university where I was teaching an organizational change effort with regards to how we taught leadership. We recognize that leadership was being taught and students were being developed in their leadership skills throughout kind of different places in the university structure. And yet we kind of, everyone was siloed and doing their own things. And so we worked over the course of a year, worked on bringing together these different efforts, which everyone that we talked to and everyone who was involved in the problem was supportive of. And the moment we went from theorizing about the need for change and starting to put that into action, the resistance that came out was just huge, right? And it was, it was just came out of the woodworks and it was, well, this is going to violate this, this, this time period, how we've always done the timing of classes here. This is going to interfere now with other stuff we need to get done. And, and despite all the reasoning and people on board, the organization and the culture of... of that institution really made it difficult. Before I pass back to you, Nolan, I just... let me talk about some individual sources of resistance to change, which I think are worth noting too, because... because people and oftentimes people that we're trying to work with have preconceived notions that, you know, their previous experiences with change have been failures and so they come to it with that. They have a cognitive bias preference for the status quo. So they're just... the comfort with the current routine; that can be a huge source of resistance. They can really fear losing something that, “This is going to be a huge cost to me, my ability to do my job, my income, or even the power I felt in the past.” Um, the, you know, people, we have a desire to create control when, especially when we don't feel we have control. Change takes some of that out of our hands, makes it more difficult. There's, you know, pride about how I used to do my job and look, and there's just change gonna maybe threaten that. Maybe there's a lack of trust in leadership. And so there can... be some suspicions and resistance can come out of that too. Um, maybe there's a fear that I'm going to have to learn new skills. And is that something that, that I'm ready to do at this point in my career because of the change. And then I think the last one is just a lack of a perceived need, which when as we get to later on talking about what leadersh... leaders can do, if someone doesn't perceive the need and that this change is going to create more turmoil and make work more difficult than they're going to resist it too. So a lot they're both around organization individuals and where resistance comes from.

Nolan : Yeah. And so I'm assuming since we're talking organizational change that we're going to have to cover John Kotter's eight steps. So is this a good time that we start bringing in that model and that framework to figure out how to manage the resistance?

Aram : Yeah. I think there's a number of folks that talk about organizational change. I've... in the work that I've done in teaching leadership classes and organizational behavior classes, John Kotter is someone that I'm a fan of. I'm a fan of his work. You mentioned the eight steps. So his eight steps would be establishing a sense of urgency, creating a guiding coalition, developing a vision and strategy, communicating the change vision, empowering broad-based action, generating short-term wins, consolidating gains, and produce more change, and then anchoring new approaches in the culture, which is making change permanent. Maybe a simpler way to frame that up is maybe make it four, which is more manageable for many of us, four kind of major moving pieces would be: assess the need for change, identify and reduce resistance, lead that change, and then develop change agents for tomorrow. And on that, on that last piece, what I would, I would quote Kotter as saying, and I think this is worth us all thinking about, especially as negotiators, but leaders in organizations, as Kotter says, finding people who can lead change is much more difficult than finding people who can manage and maintain normal operations. Change requires establishing a vision, aligning people and motivating people to enact change through action. And so it's interesting, but I think that what we look for in organizations, someone who can manage day to day things versus someone who can take us in a new direction: not necessarily the same person.

Nolan : Yeah. And so what I think is also interesting kind of something we brought up during the pre-call was that, you know, this model isn't meant to be like, check the box, you know, just vertically like, step one, step two, step three. As a leader, you have to be able to identify what... where you are at inside of your organization and where you need to apply the friction. You know, in the military, we always had the saying that leaders move to friction. And so I think that here being a leader in an organization, that's going through change and experiencing some resistance that you yourself need to move to that friction. And so again, just kind of want to iterate this, breaking it down to the four simpler steps, just ‘cause I know if you're not actually reading Kotter's eight steps, that may be a little bit more difficult to follow, but that's: assess the need for change, identify and reduce resistance, lead change, and develop change agents for tomorrow. So my question to you, Aram is obviously, you know, not obviously, but a lot of times organizations, there's a lot of friction where we've, we've addressed that. How do we make change permanent versus, you know, implementing that change and then finding ourselves reverting back two weeks, three weeks from now, like how, how do we make it permanent in organizations? You know, that, that we're actually overcoming the friction overcoming the resistance to be successful, to get to the point that we want to be later.

Aram : Yeah. So two thoughts. Let's...first piece, is it reiterating what you just said about this involves lateral thinking some level of flexibility and creativity, patience to do well. So we, we need to get out of a linear mindset. That's... I think that's really important. So  the nature of the questions that we as leaders are asking ourselves as we go through change, I think are actually more important than the actual steps. I'll just kind of give you a sample of some of those questions, but if I'm trying to think about where resistance is coming from, I may ask myself, who's going to be opposed to this. Why, where do they sit in the organization? What's the impact of them resisting? What might they do to try to undermine it? Right? I mean, I want to think about those actual people. If I'm thinking about how I'm going to prepare for change, you know, then there might be: have I communicated the nature of the problem and the need well enough? Have I looked to bring the right people kind of into the table... to the table? And that's often a diverse set of perspectives. How are we then functioning as a change team? What does that going to look like? What strategies do we need to employ to work on our vision? And I could go on and if, and I think that's something for listeners, if they want to talk more, reach out to us, we talk more about some of those questions that are really important to ask through those, you know, kind of four different stages of change. So that would be my first: is kind of the thinking part. The second piece to making change permanent is really looking at, “How are we embedding this within the kind of the lifeblood of our organization?” In the same way that we talk about negotiations don't end at the agreement they end when implementation is successfully done. Well, change is the same way, right? And that's why this is a negotiation. It's... it's not just enough to negotiate the need, come up with a great plan, get people bought in and enrolled. It's really about moving to action. And so we need mechanisms and what Kotter would call kind of reinforcing or embedding mechanisms to make sure it changes. How we measure performances, how we report on company metrics. Those things are going to be really important. It's not important to the boss. If we're not coming back of the changes are going to stick, you know, who’s role modeling this? That's... it's so important. I think that's all another reason why finding people who can manage change is so difficult as these have to be people who can actually walk the walk of the new direction that we're going in, you know, what's, you know, how do we establish, you know, again, rewards, recognition. How about the talent we're bringing in? Are we recruiting for people who are going to embody and represent this change? And we've talked before about salary negotiations and hiring negotiations, and we've talked about both, both sides of people there. And then in terms of, you know, reinforcing, do we have the right structure in place in terms of people who are reporting to people. Can new ideas, you know, flow up through the organization? Are we such a... so stuck in hierarchy that - and not that hierarchy is bad - but are we so stuck in hierarchy that we're going to kill ideas at the lowest level, even the way that we've set up our office space to be able to engage and talk, does that support the change we're working forward? And then I think the last thing is what's communicated, right? What, what continues to get communicated? Every opportunity possible, the stories of success we tell, the statements we make in annual reports and what is coming out that we're reinforcing? This is who we are. This is what we're about. Those are things that are going to help make change permanent.

Nolan : Yeah. And I think, you know, this podcast is, is all about, you know, empowering leaders and especially elevating your influence through purposeful negotiations, but getting back to the empowering leaders aspect of this, I think it's important to realize that you, as a leader, not only have to walk, you know, walk the talk, “do as I do” not just “do as I say” kind of thing, but also you need to empower your subordinates to be able to make decisions. I mean, it can't - if you are going through organizational change -  everything cannot be withheld at your level or else I bet that it's going to be very difficult to make the change and to make the change stick. So that's definitely a couple of things that I kind of want to highlight.

Aram : Yeah. I just want to echo that, right? I mean, you know, the change, if we're successful, change is going to outlive us. And I think that if you go to some other leadership thoughts around Jim Collins and level five leaders, and, uh, we won’t go into all that right now, but the person who then is really great at leading us and getting the change implemented and kind of leading us in this new direction may not be the person then once we get there to start doing... to shifting back to the maintaining and we may maintain. And so the success of a, of a leader to your point Nolan, is have I built those agents for change who are going to continue in this organization and continue to carry on kind of this new path. And it's uh, I believe bill George at Harvard used to refer to, you know, “Am I a time teller or a clock builder?” And I think if you're going to be a successful agent for change, you're... you're a clock builder. You... you don't have to be there every hour of the day to announce the time you don't have to be there in the future to announce what time it is. People... people are able to function and really kind of drive change on their own. So I think that's a great point you made.

Nolan : All right. So now I want to move from theory to application and your consulting experience. You know, what examples can you give the audience, the listeners for what you've actually observed, maybe how the organization ended up overcoming any obstacles and kind of the real world application of what we've been talking about.

Aram : Uh, we're just recently working with an organization that is really taking a look at internal barriers that affect their employees in terms of things that make just daily life a little more difficult. They affect selection for, you know, advanced training: things that might get in the way of promotions or the selection of people to certain positions. And a lot of this stuff as we're working with this particular organization - this is rooted in policies that... that were made years and years ago, and really didn't take into consideration gender or ethnic differences, right? So these are policies that were made when the workforce at the time was primarily, you know, old, white and male. And so addressing those needs for change - although a lot of people can recognize the deed - isn't super easy because some of this stuff is so rooted into the culture of the organization. And sometimes it's not even an obvious bias or anything. So what we did specifically, as we brought in some of the negotiation tools that you and I have discussed over the past number of months, we helped the organization in this case really map out key people who are going to be involved with not only developing kind of new policy and plans, but the implementation of it, who's going to be involved in that. So the whole idea of... kind of what we call stakeholder mapping the ability to really think about where resistance is going to come from and help consider other - those different people that we need to engage with - understanding their choice. Because as we, as we've talked about before that one of the first steps to effective influence and negotiation and to change is understanding someone else's thinking. And then the third thing that we did with them was really then say, “Great, now that we've understand the “who” and we've understood the :what they're thinking”, let's talk about how we have these conversations. So they can be more productive and increase the likelihood that they will listen and, and even be persuaded by what we bring to the table. And so those are three things that we've just done recently with an organization that's very open, to their credit, very open to change, just need some help in how they go about it.

Nolan : Uh, I think I know which organization you're referring to and it's... it is pretty awesome seeing these larger organizations, once they do start to catch that change bug, it seems like there's a lot of changes that happen, you know, all at one time. And so it's pretty…  pretty awesome to see how they get implemented. And then like what's the end user think about the change and actually seeing it, you know, be a lot more beneficial for the end user. So kind of the last thing I want to talk about Aram is circling back to negotiations and really, you know, the framework of negotiations and how that applies to organizational change. So can we cover that real fast on how to make that connection ?

Aram : Constantly as our, as our listeners, our loyal listeners would know: we talk about these seven elements of the negotiation. Listen, folks, they show up in... in organizational change as well, relationships, right? Do we understand the network of people involved and impacted by the change? Do we engage with the emotions that those people are feeling? That's a relationship component and effective change is often going to occur when the relationship is resulting in some sort of connection between the person who's experiencing it and the leader or the need for that change. Do... are we practicing, you know, mutual understanding and listening, are we building trust? Those are gonna be effective components to any change effort under communication, right? The power of a good story of a good narrative. We live in the age of a good narrative. Are we establishing the means to ask good questions, listen, tell that story, tell about our successes, look at problems from different angles and do the processes. This is the communication piece, right? Are the processes supportive of... of the change we're trying to make. From an interest perspective, can we frame the need for change as an opportunity versus a threat. When we try to get people to buy into something that often sounds like we're trying to sell them, which means they have to pay, right? Is there a way to get them to enroll in this idea? Because very naturally, because it satisfies their interests. When we think about the element of options, right? Could we find creative ways to reward excellence that is demonstrative of the new direction that we're going while we work as leaders to remove barriers to successful action and implementation. And I think that being able to find those short-term wins, right? The opportunities for proof of concept and success can be so important. Under legitimacy I'd say, you know, what's fair and reasonable and can we frame the need and in such a way, things that we should be willing to try to practice to implement. And then in terms of, again, fairness, what's reasonable for us to put into practice today, what do we need to be doing tomorrow? What do we need to do by next week or next month. Under alternatives, “Do we have awareness of the perceived benefits to resistance from the people we're working with?” And have we thought through why they may say no or put up barriers? And are we trying to find ways to make participation more beneficial than resistance more painful, right? And it's really about, “How do we make it clear for them how to get on board? And the last one under commitments: are commitments clear? Right? Do people understand? ‘Cause I think one of the fears around organizational changes, it gets really mucky and muddy and I don't know the direction going forward. So if we're bringing the element of commitments, are people really clear on what, you know, real change is going to look like? And what's the timeline? What are the milestones who's responsible for… for what? And… and at the end of the day tomorrow's headline or next year's headline, what does that successful implementation look like? And that's, that's part of the commitment piece too.

Nolan : That's awesome. So as our listeners know, this is a podcast that is all about taking action to help you elevate your influence through purposeful negotiations. With that, Aram, can you give us one or two key takeaways for our audience from today's episode?

Aram : Sure. Yeah. Let me just give one. I'm going to borrow from retired general Stanley McChrystal in his great book, “Team of teams” -

Nolan : Oh, it's a good book.

Aram : - he uses the analogy, I lo... it's one of my favorites. It’s one of the ones I often recommend to folks about leadership. But he uses the analogy, Nolan, there of the leader as a gardener. And that the role of the gardener… a gardener can't make a plant grow. He can't... can't stand there and shout over a tomato plant, “Grow! Produce fruit!” That's not going to have effect. But what a gardener can do is create the environment for those plants to be productive and to, you know, right by providing the right amount of sunlight and water and fertilizer and so forth. Right? So leaders… leaders, the same particularly leaders that are leading their organizations through times of growth and change and challenges. And I would say that a lot of the things we talk about in negotiation are key tools that... that leaders need to keep in mind the management of the seven elements, the power of... of stakeholder mapping, the... the power of thinking about problems from the other side's perspective, the power of having more effective conversations.These are things that leaders can do to shape the environment. So that change - necessary change - has the most likely chance of success.

Nolan : Yeah, I think for my key takeaway is - and I think this comes from the revolutionary war - but it's the saying that, “Move to the sound of the guns”. So leaders move to the points of friction. And in this case, then they identify where that friction exists in their organization. And then as you said, is just basically set up the environment so that change can be effective and it can last for a long time. So with those two takeaways, if you're listening to this and you did get value from this episode please leave us a five star review and a comment, share with your friends. It does help us grow. And we've been very fortunate that many of you have done that already. So thank you very much for that. Now, if there's something that you want us to cover in future episodes, you can send us an email at team@negotiatex.com but what we're more excited to be talking about today is the new coaching program that Aram and I are getting ready to launch. So if you and your organization are looking for a long-term coach, a long-term mentor to help you get through some of the things that you may encounter as far as negotiations or even overcoming organizational change, then shoot us an email at team@negotiatex.com and we can talk about it further about how we can help you in your business. That's it from us today in this episode. We appreciate you tuning in and we'll see you over in the next episode.

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