How to Plan and Prepare for Organizational Change

The Greek philosopher Heraclitus said that “the only thing that is constant is change”. This is true both in life and in business. Organizational changes are inevitable. It’s how we handle them that matters.

As part of eCornell’s Women in Leadership webcast series, Amy Newman from the School of Hotel Administration at Cornell University joined eCornell’s Chris Wofford for a discussion on how to effectively communicate and prepare for organizational change. What follows is an abridged version of their discussion.

Wofford: Amy, it’s great to have you again.

Newman: I’m glad to be here. Thanks for having me.

Wofford: Amy and I have done this before. About a year ago, we did a webcast on crisis communications. That’s pretty related to this but tell me, Amy, what are we going to learn here today?

Newman: The focus is on managing a change and communicating that change. What I’ve found is that organizations are pretty good at implementing change but they often forget to actually communicate with people both internally and externally. Sometimes, the external communication seems to be the priority in companies. They’ll tell their investors and their customers but often forget that employees are important ambassadors of the change and are the ones who will actually implement the change.

Wofford: All right. So what is the value of communication planning?

Newman: Well, let’s look at some research. In a paper published in Corporate Communications: An International Journal, Wim Elving identified four goals of change communication. The first is to increase buy-in and decrease resistance. We know that people naturally resist change, so the more we can do to prepare them to increase readiness, the more likely that they’ll buy into the change. So that’s one component.

The other is obviously to inform the audience. People need to know there is a change. They need to know how it affects them and what they’re going to be doing differently. Those are kind of the basics, but they’re essential.

Next, we have creating a sense of community or a sense of belonging, and this is the piece I think people don’t really think much about. When people hear there will be organizational change, they worry about layoffs or worry that they’ll have more work to do. There’s a tendency to focus on the negative results of a change, so you want people to feel like they’re part of the process and they’re going to be a critical piece of the organization going forward.

And then finally, it’s important to reduce uncertainty. You need to let people know what they can expect and what is expected of them. This also gives you a better chance that your change is going to be successful.

Wofford: I think a lot of people in the corporate world have probably experienced situations in which hirings and firings and big, sweeping departmental changes don’t always tend to be communicated very well.

Newman: Absolutely. And I think the tendency is to not communicate for a couple of reasons.
One, we simply forget because there are all these logistical things to deal with. But I also think people don’t like to deliver bad news, so they think it’s better to say nothing at all. Of course, that’s not true.

There are really two types of communications strategies for change. One is to inform people of what’s happening, but the second is critical and that’s about creating a sense of community.

I’ll give an example. When Marriott acquired Starwood last year, in one of the early messages that Arne Sorenson, the CEO of Marriott, sent to Starwood associates announcing the change, he said, “It’s strange for us to go from competitors to teammates.” I thought that was just such a great way to say it. He acknowledged that, “Yeah, this is weird.” First we were competitors and now we’re supposed to be part of one big happy family. Everybody’s thinking it, so acknowledging that up front makes people really feel like they’re part of the process.

Wofford: That we’re all in the same boat.

Newman: Exactly. Honesty like that reduces uncertainty and job insecurity. It prepares people for the change and then it ensures an effective change.

Now I thought that there was one goal missing from Elving’s work that I added and that’s to prevent a crisis situation. If you’re not communicating well, at some point your employees can be angry at you. So can your investors or your customers. And we know that social media will respond.

Wofford: There will be a whistleblower tweet out there or something like that, right?

Newman: Yes… It could go viral and, suddenly, in addition to trying to communicate the change, you now also have a crisis situation to handle. So it’s best to get out ahead of things even if it’s bad news.

Wofford: Like in The Godfather when Tom Hagen says, “Mr. Corleone is a man who insists on hearing bad news at once.” Obviously that was great advice.

Newman: That’s right. With bad news, you just need to get it out. In my classes, we talk about indirect communication and direct communication. The older style of thinking is indirect communication for bad news. You know, soften the blow. I don’t think that really works anymore. People want to hear what it is and just get past it.

Wofford: So that’s good advice for crisis avoidance?

Newman: Absolutely. I can share an example where the planning may have not gone so well. This is the Carrier situation and I know it’s a very sensitive one. President Trump got involved.

Wofford: The heating and air conditioning manufacturing jobs in Indiana?

Newman: Exactly. They announced that this plant was moving to Mexico and they did it in a large forum. I mean, I’m not so sure what would be a better choice really, maybe smaller department meetings. There’s no great way to tell 1,400 or so employees that they’ll be losing their jobs but, in this case, someone had an iPhone and recorded it and that’s what went viral for everyone to see. So it did not turn out so well for them and it’s something that they really should have thought about in advance.

I think part of the communication planning process is that you have to assume that any internal message is going to go external.

Wofford: You’ve developed an actual change communication plan, haven’t you? Should we get into that now?

Newman: Yes, I have something that I’ve used for many companies. It’s something to be used for major organizational changes like a merger or acquisition. But even with small department changes like a new system implementation, it would be helpful to think about who we need to communicate to and what our messages are.

Wofford: Okay, so how does it work?

Newman: The major categories are to identify the audiences, to do some work thinking about their potential reactions and to look at some communication objectives. What media or channels are you going to use? What is the timing?

Let’s start with the audience and their potential reactions. I put together a sample involving the closing of a restaurant. In every situation, this is going to be a little bit different but this is the way you might think through that kind of change.

The first thing I would do is to identify all of the audiences. Usually, we get into something called cascading communication where most likely you’re starting at the senior-most level of your organization and working your way down. You’ve got to think about the levels of management and the level of employees involved. So in this case, I’m saying the corporate management team, the restaurant management team and then the restaurant staff. Clearly they need to be notified pretty quickly. The corporate staff might be next and then you might have to notify the local government depending on the local laws. You may want to directly reach out to some VIP customers. Maybe the media will be next.

They all get different messages, different media choices. All of that has to be thought through.

Next is to look at the background of the different audiences and their potential reactions. This is the step I often find is missing. It’s really about empathy, about trying to put yourself in someone else’s shoes. It’s thinking through some of those potential, particularly negative reactions and trying to address them.

Wofford: Right. What else is involved in your template?

Newman: First, let’s look at the communication objectives. You want the corporate management team to understand the rationale and details and then you have to plan communications for their team. And when you’re coming up with these communication objectives, I would really recommend to once again think from that audience’s perspective.

The next thing to consider is responsibility, and this is easy to identify but a little harder to carry out in the communication plan. If we’re using this cascading communication, the corporate management team would communicate to the restaurant management team, for example, and the restaurant GM would communicate to the restaurant staff, probably with the help of H.R.

Next we’ve got to decide on our communication media or channel. You know, the default communication channel is most often email. For 12 years now, I’ve been hearing about the death of email. I’m still waiting for it to die.

Email is particularly effective in communicating bad news. Can you think about why?

Wofford: Well, it’s directed at me. I mean, people are tethered to their phones, right? So there’s an expediency to it.

Newman: Right. Plus, everybody’s getting the same message at the same time. In layoff situations, companies will usually send those messages on a Friday and then people go home so they’re not in their office angrily talking to each other and getting each other riled up.

But there is a downside to email. Many people would prefer a call, or better yet, a face-to-face conversation. So that’s a decision that really has to be thought through.

The last component here is about the dates or the timing of the messages. It is important to think about who should know what and in what kind of sequence. I’ll go back to the Marriott Starwood example, because I think they did a pretty good job overall.

When the announcement was first made, and this was back in November 2015, there was an email from Starwood executives to Starwood associates with a press release that hadn’t gone out yet attached. That was really the first communication, as it should be, because this was an acquisition, not a merger. Starwood associates are the ones who are thinking they might have the most to lose. When that email went out, it was presumably the first that anybody had heard of this.

Next, we get an email from Marriott executives to Starwood associates that came less than two hours later. Clearly this was all well orchestrated and planned. And that was the message I mentioned before, where they say it’s strange to go from competitors to teammates. It was just a very welcoming message. There was also a video with Arne Sorenson that was lovely.
Then, we had the press release. That public announcement was a little later in the day, but at this point employees already knew that it was coming. In other words, they didn’t have to read about it in the press. All of this happened within three hours of that first message.

Wofford: Amy, thanks so much for joining us once again and thanks to all of you who tuned in.

Newman: Thank you, Chris. It’s been a great conversation.

Want to hear more? This interview is based on Amy Newman’s live eCornell WebSeries event, Communication Planning: Preparing for Organizational Change. Subscribe now to gain access to a recording of this event and other Women in Leadership topics.