It is often the COO who will lead their firm through implementing a new process or adopting a new technology tool, so a common question I ask guests about The COO Roundtable Podcast is, “How do you successfully affect change in your organization?” Many assume that the COO role is primarily technology-oriented, but in fact, it's usually the people that are the hardest part of the job. Choosing the various technology vendors that make up the technology stack is relatively easy compared to getting your teammates to adopt and interact with the technology—that's where real change management comes in. It seems that COOs are always up against the, “But we've always done it this way…” mentality from their teammates.
Over the years, we've received some great advice from our guests who describe how they act as change agents in their organizations, implement change, and benefit the various stakeholders in the firm. But perhaps no one offered such a succinct framework for change as the industry consultant Carolyn Armitage. She described her five elements of change and noted, “If you lack any of these five elements, there will be unintended consequences.”
Carolyn Armitage's Five Elements of Change
- Create a clear vision: The foundation of any successful change initiative begins with a well-defined vision. Without a clear understanding of why change is needed and where the organization is headed, employees can quickly become confused and resistant. Effective leaders must take the time to create a compelling narrative that not only describes the desired future state, but also connects the change to the organization's core values and strategic objectives. By providing a clear, inspiring sense of purpose, leaders can rally their teams around a common goal and build the momentum needed to see transformation.
- Make sure employees have the right skills: As the saying goes, “change is hard”. And for good reason – it often requires people to step outside their comfort zone and learn new ways of working. Carolyn says, “Without the right skills, team members will experience anxiety and insecurity because they are not sure if they can perform the new tasks that are being asked of them.” To combat employee anxiety related to change, leaders must ensure their teams have the skills and abilities needed to succeed in the new environment. This could include comprehensive training programs, mentoring initiatives or even strategic hiring to fill any gaps. By proactively investing in the development of their people, organizations can empower their workforce to embrace change and contribute to its success.
- Align incentives with change: One of the most common pitfalls in change management is a disconnect between the desired behaviors of team members and the organization's reward system. If employees do not perceive a clear personal benefit from embracing change, they are less likely to put in the effort necessary to make it a success, stating, “That's not in my job description.” Effective leaders must carefully examine their existing incentive structures and align them with new ways of working. This may include adjusting performance metrics, modifying compensation plans, or introducing new recognition programs that measure behaviors and outcomes that are critical to transformation.
- Allocate sufficient resources: Successful change management requires a significant investment of time, money and energy. Without the necessary resources to support the transformation, employees can quickly become disillusioned and lose faith in the process. Leaders must carefully assess the resource requirements for each phase of the change initiative and ensure their teams have access to the tools, technology and support they need to execute effectively. This may mean reallocating budgets, bringing in outside expertise, or securing buy-in from key stakeholders to free up the required resources.
- Develop a comprehensive action plan: Finally, no change management initiative can succeed without a well-designed implementation strategy. Effective leaders must take the time to develop a detailed action plan that outlines the steps, timelines, and specific responsibilities for each phase of the transformation. This not only helps ensure that change is executed accurately and efficiently, but also provides a clear framework for monitoring progress and making adjustments as needed. Carolyn says, “Without a proper plan of action, the firm will experience many false starts.” By maintaining a laser-like focus on executing the plan, leaders can minimize the risk of delays and other obstacles that can derail the change process.
Navigating the complex waters of organizational change requires a multifaceted approach that addresses the needs of the business and its people. By focusing on these five essential elements—vision, skills, incentives, resources, and action planning—leaders can increase the likelihood of driving meaningful and lasting transformation within their firms. By doing so, they can not only position their companies for long-term success, but also empower their teams to embrace the challenges and opportunities that lie ahead.
Matt Sonnen is Chief Operating Officer at Coldstream Wealth Managementas well as the creator of the digital consulting platform COO Societywhich educates RIA owners and operations professionals on how to build more impactful and profitable enterprises. He is also the host of the popular The COO Roundtable Podcast.