Four Ways to Create Lasting Change

Managers and employees often dismiss change initiatives as the new flavor of the month. In this Q&A, Professor Michael A. Roberto and Senior Researcher Lynne C. Levesque discuss new techniques to make change stick.
by Martha Lagace

Many managers know that even when their firm launches a change initiative with great fanfare, it is tough to make the changes last. More often than not, employees wearily dismiss the initiative as another management fad. Soon enough, processes and behaviors revert to their old, comfortable selves.

HBS professor Michael A. Roberto and Senior Researcher Lynne C. Levesque decided to look deeper into why some initiatives fail and others succeed. How do some change initiatives take hold and almost become part of the firm's very DNA? To investigate, the two conducted an in-depth comparison of two generations of a customer-satisfaction program at a large American retailer, dubbed "Alpha Corporation" for the sake of confidentiality. The first of Alpha's customer satisfaction programs, launched in the early 1990s, fell flat. The second, revamped version, however, demonstrated important improvements. According to Roberto and Levesque, "We began to understand the barriers and catalysts for successful institutionalization of these programmatic change efforts." They described their results in a new HBS working paper, "Strategic Initiatives: Changing the Firm's DNA."

Roberto and Levesque joined forces for the following e-mail interview with HBS Working Knowledge.

Martha Lagace: As you write in your working paper, conventional management wisdom says the first step in a change initiative is to talk about why change is necessary, and then only later start the work of creating new processes, systems, and behaviors. You've learned, however, that it is important to lay the groundwork much earlier on. What attracted you to the "Alpha Corporation" in order to learn how to change a firm's DNA?

Michael A. Roberto and Lynne C. Levesque: Alpha Corporation was a firm undergoing a very interesting transformation. The company had been run by its founders for many years and had a very distinct entrepreneurial culture. Then, the founders retired, and the firm hired an outsider as its CEO. He introduced much more disciplined and structured management systems and processes. Moreover, the firm had experienced a slight decline in performance and increasing competition from major rivals prior to his arrival.

We were intrigued by the changes taking place at Alpha, particularly as we learned about the new corporate initiatives undertaken by the incoming CEO and his team.

Q: What caused the failure of Alpha's first attempt at a customer service initiative in the early 1990s?

A: Initially, the first CSE [Customer Service Enhancements] initiative was not a failure. It did lead to some short-term improvements in performance. However, results regressed back to their original level over time. The improvements proved to be unsustainable because employees never made the transition from viewing the initiative as this year's "important management program" to developing a deep-seated collective understanding and commitment that "the way we now work around here" had fundamentally changed.

Some people in the organization remained skeptical about the seriousness of the customer service issues.

Employees altered their behavior during the early days of excitement about the new initiative, as many people do when senior management launches a major new program. Yet, when the organization did not redefine employee roles, responsibilities, and rewards, nor alter many core systems and procedures, individual and group behaviors at Alpha returned to the way they "had always done things."

Q: Why did Alpha need to start another change initiative more recently? What were the main customer service problems that were harming the company? And what did the "Mystery Shopper" component reveal?

A: In the late 1990s, the company's comparable-store sales gains (increases in sales for stores open one year or more) began to decline. In retail, this measure of performance proves to be extremely important. Retailers can drive revenue growth by opening new stores, but eventually, geographic markets become relatively saturated. Therefore, it is very important for retailers to drive what they call "comps" (comparable-store sales increases). At Alpha, as "comps" began to suffer, the firm also started to collect anecdotal as well as more systematic evidence of declines in customer satisfaction. In particular, customers seemed frustrated with their inability to find desired products, and they wanted more rapid and knowledgeable assistance from employees.

Alpha executives launched the new CSE initiative, but some in the organization remained skeptical about the seriousness of the customer service issues. A small corporate team responsible for leading the initiative addressed those skeptics in a very interesting way. They asked senior managers to "mystery shop" the stores. This exercise opened many eyes, as people saw the customer service problems affect their own shopping experience. Before this exercise, some senior executives downplayed the notion of a customer service deficiency, and one even argued that "mystery shoppers should not and cannot tell our managers how our stores should be run."

Mindsets changed after the mystery shopping experience, as it proved much more powerful than confronting data on a spreadsheet. The experience not only raised people's understanding and built buy-in for the initiative, but it clearly engaged people emotionally. Now, they had vivid stories to tell and they had personal feelings of disappointment and frustration that they did not want customers to experience.

Q: Tell us about the four sets of activities you identified—chartering, learning, mobilizing, and realigning—in the successful change effort.

A: By conducting an in-depth comparison of these two generations of the CSE initiative, and by comparing this experience to initiatives that we have studied at other firms, we began to understand the barriers and catalysts for successful institutionalization of these programmatic change efforts.

We noticed that the managers at Alpha engaged in a series of processes, during the very early stages of the second CSE effort, which did not take place during the first generation of the program. These processes fell into four major categories: chartering, learning, mobilizing, and realigning.

Chartering refers to the process by which the organization defines the purpose and scope of the initiative, as well as the way people will work with one another on the program.

Learning refers to how managers develop, test, and refine ideas through experimentation prior to full-scale rollout.

The mobilizing process entails the use of symbolism, metaphors, and compelling stories to engage people's hearts as well as minds so as to build commitment to the project.

Finally, the realigning process consists of a series of activities aimed at reshaping the organizational context, including a redefinition of roles and reporting relationships as well as new approaches to monitoring, measurement, and compensation.

These four processes represent critical up-front work that a change team must undertake to build commitment, energize employees, and insure that the components of the initiative become part of the firm's core systems and procedures. In many instances, such as the first CSE initiative, firms do not do this foundational work, and they plunge ahead with a "program of the month" without thinking about how to sustain behavioral changes over time.

Q: Have you conducted follow-up study or do you have knowledge of how the changes at Alpha are sticking?

A: Several years after the initiative got underway, the changes in processes, systems, and behavior appear to have become part of the firm's DNA. A number of metrics suggest that the CSE initiative produced substantial improvements in customer service. For instance, customer service scores from the firm's "Mystery Shopper" program have risen significantly since the initiative began, more visitors to the stores are actually purchasing items, and the average ticket has increased to record levels for the firm.

Moreover, comparable store sales have risen recently in quarter after quarter, after having fallen for roughly two years just prior to the initiative. While many factors have contributed to these increases, the CSE initiative played a key role in driving performance improvement.

Q: How will you take this work further? What are your next steps?

A: The ideas here have been an interest of ours for some time. For instance, one of us (Michael) has written a case study about a patient safety initiative at Children's Hospital and Clinics in Minnesota. That effort produced enduring behavioral and cultural changes regarding an issue (medical errors) that has proven very difficult to address for many health care institutions. Moving forward, we hope to find other cases such as Alpha and Children's that we can study.

About the Author

Martha Lagace is senior editor of Working Knowledge.