Every organizational transformation — a merger, an acquisition, a divestment, a factory closure, a new business model — has a people side, and every one meets resistance. Having worked through several such changes in HR at one of the world’s largest multinational companies, the author draws one lasting lesson: to win over those who resist, show them what they stand to lose if the change does not happen, not only what they stand to gain.
The term organizational transformation was still very much alien to me when I was relatively new to the HR profession. I didn’t even realize that it was basically what I was doing when I first started getting involved in the various stages of what I now recognize as something transformative.
What organizational transformation looks like in practice
I recall that, as Learning and Development Manager, then as Head, and later as Senior HR Business Partner (HRBP), I participated in several divestments, mergers, and acquisitions at my previous company — one of the largest multinational companies in the world. There were factory closures and new factories being built, the divestment of an entire business unit, the acquisition of a new business, a change in the business model, the setting up and closure of a regional office, and so on.
Why HR plays a pivotal role in business change
Every business topic will always have a people aspect, which is why the role of HR is pivotal in any business change. I was lucky enough to be part of an organization whose key leaders appreciated this. My key role was to look into the impact of these changes on people, organization, and culture.
How to manage resistance to change: “communicate, communicate, communicate”
As in any change initiative, there will always be resistance, so a great deal of effort went into getting the buy-in of those affected by the change, whether its impact on them was positive or negative. What I learned from my CEO was to relentlessly “communicate, communicate, communicate” the what, why, and how of the change. He personally spent much of his time holding regular town hall sessions and going around the factories and the different business units to explain the change.
My role was to prepare a comprehensive communication plan that mapped out a detailed strategy for ensuring that key stakeholders and the rest of the employees bought into the change, were equipped with correct and up-to-date information, and were properly trained if a new skill or competency was involved. More importantly, the plan had to reassure them that they would be properly supported at every stage of the change process.
The lesson that stuck: show resistors what they stand to lose
In all this, one lesson has stayed with me to this day: when driving change, especially with those identified as resistors, focus on what they stand to lose if the change does not happen. The reason: “The psychological pain of losing is greater than the pleasure of gaining something.” This is a stronger motivational pull than simply emphasizing the benefits of change — a principle behavioral economists call loss aversion.
Frequently asked questions
What is organizational transformation?
Organizational transformation refers to major business changes such as mergers and acquisitions, divestments, factory closures and openings, changes in business model, and the setting up or closing of regional offices. Because every business change has a people aspect, each of these also affects people, organization, and culture.
What is HR’s role in organizational transformation?
HR’s role is to look into the impact of business change on people, organization, and culture. In practice, that includes preparing a communication plan that secures buy-in from key stakeholders and employees, keeps them equipped with correct and up-to-date information, ensures they are trained in any new skills, and reassures them they will be supported at every stage.
How do you manage resistance to organizational change?
Manage resistance by relentlessly communicating the what, why, and how of the change, with leadership out front through regular town hall sessions and visits to factories and business units. Back this with a communication plan that secures buy-in, keeps people correctly informed, provides training where new skills are involved, and assures them of support throughout the change.
Why focus on what people stand to lose rather than the benefits of change?
Focusing on what people stand to lose works because the psychological pain of losing is greater than the pleasure of gaining something. For those identified as resistors, showing what they stand to lose if the change does not happen is a stronger motivational pull than simply emphasizing the benefits of change.
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