How Leaders Can Navigate Difficult Organizational Changes
2022 was a challenging year for many organizations: we were still dealing with a pandemic, saw dramatic changes to the way we work, and a war in Europe and global economic uncertainty entered the landscape. And unfortunately, organizations across just about every industry are bracing for more disruption in 2023.
In anticipation of what’s to come, organizational leaders are implementing sweeping changes. We’ve witnessed organizations roll out return-to-office (RTO) plans, introduce new benefits, adjust compensation and reorganize themselves structurally, among other changes. Managing organizational changes like these can be incredibly challenging, especially when leaders introduce changes that employees disagree with.
The silver lining is that as a species, we humans are exceptional at adapting to change, when we are supported. This raises critical questions — how can organizational leaders navigate difficult changes? How should leaders plan, strategize, communicate and implement changes that they know will be disruptive? And how can leaders create a supportive environment to help people adapt to difficult changes?
Here are four steps for leaders facing such decisions.
1. Treat People With Respect and Empathy
It is tempting to think of organizations as impersonal entities. But at their core, organizations are essentially 1) collections of people that are 2) using shared resources to 3) accomplish shared goals. In other words, the changes that affect organizations affect real people.
The same organizational change can affect people in very different ways. And in large organizations of thousands or tens of thousands of people, it is not uncommon to observe the full range of emotions, from devastation to excitement. Regardless of how people feel about a decision, everyone in that organization deserves to be treated with respect and empathy.
Through our research over the last three years, we saw the power of employees feeling heard. In our global Qualtrics study (pdf) conducted during the heart of the pandemic, employees who felt heard by their employers reported significantly higher engagement, well-being and resilience compared to those who did not. An employee feeling heard implies that he/she/they matter! Listening to people is one of the most foundational ways to demonstrate respect and provides the raw material from which leaders can demonstrate genuine empathy.
Related Article: How to Practice Empathy in the Virtual World of Work
2. Explore Tradeoffs
It is natural for leaders to be concerned about how employees will react to difficult organizational changes. In fact, they should be. Organizational changes do not occur in a vacuum. There are always tradeoffs and side effects that come naturally as a result of change or that can be introduced. As an overly simplistic example, an organization shifting from remote work back to the office must consider changes to physical infrastructure, collaboration norms, and issues as mundane as parking. Leaders must incorporate these sorts of tradeoffs into their employee listening efforts and strategic discussions.
In particular, leaders should dedicate time to measure what employees value the most. This can be done through instruments as simple as focus groups to methods such as conjoint analysis. We also know through psychological research that people hate big losses more than they love big gains. The key in these activities is understanding what really matters to employees and what new or improved benefits would help to make the changes more palatable, especially when they feel something is being taken away from them.
3. Emphasize the Why and How
It would be great if every organizational change was well-received, but that’s obviously not the reality. Humans are very sensitive to fairness and justice, even subconsciously. From an academic perspective, employees naturally consider multiple types of organizational justice:
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- Distributive justice: Perceived fairness of the decision itself.
- Procedural justice: Perceived fairness of the decision making process.
- Interactional justice: Perceived fairness of how the person was treated and communicated with along the way.
When people are unhappy with a decision (i.e., lack of distributive justice) their perceptions of the fairness of the decision making process (procedural justice) and how they were personally treated (interactional justice) become all the more important. Major organizational decisions should naturally be driven by rigorous analysis and discussion but in order for employees to perceive the decision-making process as fair, leaders should clearly communicate the rationale and data supporting the difficult decision.
Even though employees may still be unhappy with the decision itself and may need to process negative emotions for a time, their perceptions of procedural and interactional justice are pivotal to their long term relationship with the company.
Related Article: Communicating Change: Overcoming Resistance Through Empathy
4. Communicate With Certainty
For leaders, one of the most challenging aspects of organizational change is how to communicate transparently before a decision is made. For instance, over the last three years, countless employees have wondered and directly asked their leaders if and when decisions around RTO, workplace safety (e.g., mask and vaccine mandates), etc. will be made. When asked, the honest answer to many of those questions is "we don’t know."
In the face of the unknown, some leaders freeze. They don’t raise the topics in company meetings and don’t dare to ask questions related to these topics in surveys or other listening efforts often to avoid a discussion they’re not ready to have. To be clear, this pattern of behavior is often well-intended to avoid confusion, believing 'it’s best not to discuss this until we know the answer.'
While we as humans are good at dealing with change, we are generally not good at dealing with uncertainty — we ruminate, create stories to fill in the blanks, and may even assume the worst. Instead of not talking about what is uncertain, leaders should embrace it. If the answer really is "we don’t know," leaders should say exactly that. That, at least, makes the uncertainty certain. From there, share what you can that is certain — for example, that the leadership team is exploring options and plans to make a decision by X date. And if possible, provide employees with a path to more certainty, perhaps by giving them direct access to some of the sources of information that the leadership team is using during decision making.
Consider the Long-Term Implications
Ultimately, organizational leaders must make very difficult decisions for the sustainability of the company that affect the lives of employees. When dealing with changes that affect the lives of other people, how difficult organizational changes are made, communicated and executed can be just as (or even more) important as the decision itself. Leaders must also remember that these changes can have lasting effects beyond the immediate impact. Major organizational decisions are more public than ever before and the sustainability of the company is also dependent on its ability to attract and retain talent in the future.
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About the Author
Dr. Benjamin Granger is Chief Workplace Psychologist and Head of Employee Experience (EX) Advisory Services at Qualtrics. He has over a decade of experience building, running and optimizing experience management (XM) programs across the globe.