Tuesday, August 30, 2016

Mastering Change Fatigue

During a strategy update with the top 100 executives of a Fortune 500 corporation, the CEO discussed each of the thirteen “strategy initiatives” that the company had recently launched. They ranged from changing the sales model, introducing new product categories, expanding to new markets overseas, partnering with other firms in alliances and joint ventures, and restructuring the staff functions. He stated that rather than shirking from these challenges as other companies might have, he was proud to be leading a company with such dedicated people who embraced these changes. A year later, the CEO had retired, many of the changes had stalled, and the company’s stock price had dropped by a few points. Have you heard this story before?

As we all know, the scale and pace of changes in business are accelerating. Long-term trends, such as changing demographics (e.g., the rise of the middle class and the growing population of those sixty-five and over) and the rise of emerging markets, are impacting organizations in dramatic ways. In addition, there have been unexpected short-term events, such as the recent Brexit vote and the concerns about unfettered globalization, that have significant implications for organizations.  And in a few organizations where new CEOs have been brought in to make their mark, they are expected to make changes quickly. The average tenure of CEOs has been declining, and many CEOs have perhaps two or three opportunities to increase shareholder value within a short time frame.

As a result, many executives have initiated change efforts and programs in their organizations. Some of these change efforts are truly revolutionary, such as transforming an entire business model (e.g., Amazon’s move to cloud services), acquiring or divesting (e.g., GE’s getting rid of GE Capital), or expanding to new customer segments (e.g., Hyundai’s move with the Genesis and Equus to compete with luxury brands). There is extensive research to demonstrate that the majority of change initiatives do not succeed.

I’d like to focus on one aspect or barrier for their lack of success, and that is “change fatigue.” Change fatigue is different from resistance to change; the former suggests that organizational members are worn down due to the intensity, frequency, scale and volume of changes with which they have had to cope. Under these conditions, efficiency and performance begin to suffer and employees lose their enthusiasm and begin to shut down, start making poor decisions, and in some cases decide to leave the organization. Resistance to change suggests a lack of willingness or commitment to go along with the change; in change fatigue, the willingness and commitment may still be there. To put a twist on an old saying, the flesh is willing, but the spirit is weak.

There has been a lot of research on what happens to individuals who become fatigued. In their now quasi-famous study, Danziger et al. (2011) examined 1,112 judicial rulings made by eight Jewish-Israeli judges over a 10-month period. The judges presided over parole requests by prisoners convicted of all sorts of crimes. While 64% of prisoner requests were rejected overall, they found that favorable rulings (that is, when a parole request is accepted) tended to happen at the beginning of the work day or after a food break – even after controlling for all kinds of variables. The severity of the prisoner’s crime and prison time served, sex and ethnicity were not predictive of the favorability of the rulings. Why was this? For the authors, rejecting requests is an easier decision when judges are mentally depleted. Favorable rulings take much longer to discuss than unfavorable rulings, and written verdicts of these rulings are much longer than written verdicts of unfavorable rulings. This depletion can be restored somewhat by short rests or increasing glucose levels in the body. Other research on consumer behavior has shown that those who are ego-depleted (e.g., under stress, had a tough day, coping with many problems and crises) tend to spend more money and purchase more impulsively than those who are not.

The underlying theory here is that of self-regulation. Our executive function is the agent that makes decisions, initiates and maintains actions, and regulates the self. The research suggests that many of the self’s activities require a common resource, similar to energy or strength. In other words, since we are drawing on the same resource, this resource can be depleted. Baumeister (2002), who has been studying self-control failures for years, particularly as they relate to consumer behavior, states that “when people are emotionally upset … restraints break down, so that people become more likely to eat unhealthy foods, procrastinate, seek immediate gratification, and engage in aggression.” (p. 672). Furthermore (and there has been a lot of additional research to support this), performing any act of self-control “depletes” one’s resources, which operate like some kind of energy or strength. 

Fatigue or depletion can also lead to stress, which as we know from research, also causes unfavorable outcomes both for the individual and the organization. At the individual level, there has been considerable research that chronic psychosocial stress at work is highly correlated with elevated risks of depression (Siegrist, 2008), especially when the following conditions are present: when the work is demanding, when there is a lack of reciprocity between efforts and rewards, when there is a lack of control or autonomy, and when there is is a lack of social support especially at work. In a study of 109 business executives, Teixeira et al. (2014) measured their chronic stress levels and performance on various cognitive tasks, and found stress levels to be associated with performance on these tasks. Other research has also shown that coping with stress requires self-regulation and making some tough choices – both of which are ego-depleting.

Some management theorists have argued for assessing an organization’s readiness to change. For example, Conner (2004) categorizes change readiness into three areas: change history (employees’ experiences with previous changes), capacity and demand (the amount of resources available versus the requirements for the change), and the people risk involved (the extent to which the human impact of the change is being addressed). Weiner (2009) describes readiness for change at the individual level, and views its two aspects as change commitment (employees’ willingness to make the change) and change efficacy (their belief in their collective capability to implement change).

Here are four strategies that organizations can use to address the challenge of change fatigue. First, communicate an exciting vision of the future, and how the change efforts are aligned to achieving these objectives. As the motivational speaker Simon Sinek has articulated so eloquently, start with the why. Organizational members need to rally around a purpose that will inspire them, and having this sense of purpose will help combat change fatigue. Furthermore, organizational leaders need to help employees connect the dots among all the different change initiatives. What I am advocating is not necessarily to reduce the number of change initiatives, but to help organizational members understand the synergy and relationships across these initiatives as a starting point.

Second, monitor the balance between capacity and demand. It is possible that objectively the resources in place (capacity) may not be sufficient for the requirements (demand). When I ask managers and students, how many of them are doing more with less in their organizations, about 9 out of 10 respond that they are. In many companies, employees who leave are not being replaced, and hiring freezes have been implemented. Yet, as many managers have told me, the work does not go away. The solution may not necessarily be to provide more resources, for at least three reasons. First, often this sense of an imbalance between capacity and demand is a perception, and not necessarily an objective reality. Second, managers can help by prioritizing and streamlining the work so that unnecessary work is removed from these requirements. And third, we know that many employees are not fully engaged in their work. If managers could increase levels of engagement, imagine what this would do to improve the balance!

This brings us to the third strategy, which is to engage and involve employees in the change. As Grant (2016) has argued, getting people excited versus asking them to calm down actually helps performance. However, are there unintended consequences for organizations that ask employees for their involvement and input, and seek to increase their autonomy? Will this tend to increase ego depletion and therefore contribute to change fatigue? For the answer to this, we turn to research by Deci and his colleagues, who have shown that on the contrary, the experience of autonomy increases intrinsic motivation and energetic behavior. The reason for why others have found opposite results, according to these researchers, is that those studies involved controlled regulation while Deci’s studies focused on autonomous regulation. When people have a sense of autonomy with making choices, especially when the choices they are being asked to make are important, relevant and meaningful to them (autonomous regulation), then they do not necessarily experience ego depletion. In fact, they will feel energized. For Moller et al. (2006): “… autonomous choice is accompanied by the experience of volition, whereas controlled choice, which involves selecting an option under pressure, is accompanied by the experience of control. In other words, choices that are accompanied by demands or obligations involve a very difficult phenomenological experience from those that simply offer opportunities.” (p. 1034) These studies suggest that change fatigue may be dissipated at least partially by involving employees and having them participate in the process of change. Such empowerment, rather than being ego-depleting, can in fact be quite energizing.

Fourth, perhaps as important as the other recommendations, is that individuals need to pay better attention to their health, and organizations can play an important role here. A recent article in the McKinsey Quarterly (van Dam and van der Helm, 2016) for example argued that sleep deprivation and mismanagement are linked to adverse effects on our mental capacities, such as our attention, concentration, learning, and emotional reactions. Many of us believe that we have to work in a 24/7 world, and adopt a macho attitude towards our work lives. Fortunately, some organizations are recognizing the toll this takes. For example, the Boston Consulting Group has a strict time-off mechanism policy, where everyone on a project team has to take a full day or night each week away from work (Perlow and Porter, 2009). The McKinsey article provides other examples: blackout times on work emails, staying out of the office from 9 p.m. Friday to 9 a.m. Sunday, and mandatory work-free vacations. Other companies such as Google have been experimenting with mindfulness training. Those of you who have ever tried running a long-distance race know that pacing yourself is crucial. Sprint too fast at the beginning, and you will end up regretting this. In a recent article in Sports Illustrated (June 27, 2016), the writer describes total energy (power multiplied by time) as critical in a bicycle road race: “Whoever can conserve the most energy over the duration of the race or stage will finish first.” A stage in a race might have a series of short climbs, then a 10-mile climb with a 7% gradient. If a rider did not conserve his energy during the first part of the stage, he or she would not be able to push for that climb. This analogy holds for many other endeavors, and certainly is appropriate for organizations going through change.

These strategies will help improve organizational resilience. The dictionary has two meanings for resilience: the ability to become strong, healthy, or successful again after something bad happens, and the ability of something to return to its original shape after it has been pulled, stretched, pressed, bent, etc. There has been relatively little research on the impact of resilience on organizational change. In my experience, organizational resilience refers to the capability that the organization has to adapt (Denhardt and Denhardt, 2010). It is the responsibility of leaders to build this culture and to lay the groundwork so that, as Hamel and Valikangas (2003) argue, resilience becomes like an autonomic process. They point out that organizations should build strategic resilience, and not just operational resilience. This requires that an organization be adaptive, and constantly in a learning mode, becoming more organic and nimbler. In a prescient article, they state that “an accelerating pace of change demands an accelerating pace of strategic evolution, which can be achieved only if a company cares as much about resilience as it does about optimization.”

How to do this? Research suggests that resilient individuals have three common characteristics: a firm acceptance of reality, a conviction that life has meaning, and an ability to work with what they have (Coutu, 2002). Ramo (2009), in looking at resilient eco-systems, points to four elements: an ability to constantly reconceptualize problems, to generate a diversity of ideas, to communicate with everyone, and to encourage novelty (instead of waiting for a big, unanticipated collapse). Engaging employees in change will lead to leaders having a firm acceptance of reality, communicating an exciting vision will help give employees more meaning, and balancing capacity and demand will help with employees working with what they have.  

Since the pace of business life and change is unlikely to decelerate for many, having an effective strategy in place to proactively deal with change fatigue is imperative for companies today.

Baumeister, R. (2002). Yielding to Temptation: Self-Control Failure, Impulsive Purchasing, and Consumer Behavior. Journal of Consumer Research, 28, 670-676.

Conner, D. (2004). Developing Resilient Teams for Managing Change. Unpublished manuscript, Conner Partners.

Coutu, D. (2002). How Resilience Works. Harvard Business Review, May, 80 (5): 46-55.

Danziger, S. et al. (2011). Extraneous factors in judicial decisions. https://en-coller.tau.ac.il/sites/nihul_en.tau.ac.il/files/RP_190_Danziger.pdf

Denhardt, J. and Denhardt, R. (2010). Building Organizational Resilience and Adaptive Management. In J. Reich et al. (eds.), Handbook of Adult Resistance. New York: The Gilford Press. 333-349.

Grant, A. (2016). Originals: How Non-Conformists Move the World. New York: Viking.

Moller, A., Deci, E. and Ryan, R. (2006). Choice and Ego-Depletion: The Moderating Role of Autonomy. Journal of Personality and Social Psychology, 32 (8): 1024-1036.

Perlow, L. and Porter, J. (2009). Making Time Off Predictable – and Required. Harvard Business Review, October, 87 (10): 102-109.

Ramo, J. (2009). The Age of the Unthinkable. New Yok: Little, Brown.

Reineck, C. (2007). Models of Change. The Journal of Nursing Administration, 37 (9): 388-391.

Siegrist, J. (2008). Chronic Psychosocial Stress at Work and Risk of Depression: Evidence from Prospective Studies. European Archives of Psychiatry and Clinical Neuroscience, 258 (5): 115-119.

Teixeira, R. et al. (2015). Chronic Stress Induces a Hyporeactivity of the Autonomic Nervous System in Response to Acute Mental Stressor and Impairs Cognitive Performance in Business Executives. PLoS One. 2015 Mar 25;10(3):e0119025. doi: 10.1371/journal.pone.0119025. eCollection 2015.

Van Dam, N. and van der Helm, E. (2016). The Organizational Cost of Insufficient Sleep. McKinsey Quarterly, February, http://www.mckinsey.com/business-functions/organization/our-insights/the-organizational-cost-of-insufficient-sleep

Weiner, B. (2009). A Theory of Organizational Readiness for Change. Implementation Science, 4 (1): 1-9. http://dx.doi.org/10.1186/1748-5908-4-67