Executives and their organizations face many different – and overlapping – transformations, such as regionalizing their business models, digitalization, and the ‘AI-fication’ of businesses, as well as making operations carbon-free. In contemporary business, exposure to ‘rare events’ is becoming normal, and change is therefore constant.
Consulting reports suggest 88% of business transformations fail to achieve their original ambitions. So why do so many transformation initiatives take too long, become too expensive, or miss the mark entirely? Having worked with digital transformation for over a decade, and with business development even longer, we have found that an overlooked truth haunts business transformations: Employees are different. Therefore, they react differently to transformations and should therefore be managed differently.
When looking at the employees in the direct path of an organizational transformation, we can differentiate them by asking two questions: Do they want to change, and do they like the plan? When combined, these two questions help identify four different transformation tribes that can help or hinder your transformation. Correctly identifying and managing them will be crucial to ensuring a successful transformation.
The ‘transformation tribes’ that employees belong to are described below (see table). Each archetype has distinct motivations, concerns, and ways they should be managed.
| Protesters | Challengers | Hesitators | Enthusiasts | |
|---|---|---|---|---|
| What they really want |
The past | A different future | A safe passage | The announced transformation |
| What they dislike | Everything | The plan | The journey | Nothing |
| Manage them | Isolate, convince |
Listen to good ideas Set boundaries |
Create trust and motivation Enable the ride |
Elevate Support |
| They need to be | Handled | Heard | Helped | Harnessed |
The protesters dislike both the plan and the prospect of change. In fact, this is a very human tendency. Most people are primed to a status quo bias, where they prefer the safety of what they know and what is reliable over uncertain change. Yet, protesters may also have solid arguments for their resistance, and therefore, they might be valuable sources for input on the pitfalls, perils, and problems of the proposed transformation.
However, as this group is very far away from becoming supporters of the transformation initiative, they essentially need to be handled so they won’t be inclined to stand in the way of the initiative, obstruct, or even undermine its implementation. For instance, when Satya Nadella became CEO of Microsoft, one of the first things he did was to get rid of the so-called “brilliant jerks” that had dominated the culture, as well as a controversial stack-ranking employee review system where employees are compared to each other’s performance rather than their own goals for performance. As such, problematic employees can be removed, but more importantly, managerial systems that give them power can be removed as well. The managerial imperative, then, is to either try to convince these employees of the need and attractiveness of the transformation or to try to isolate them from the other tribes, so that there is no spillover of negativity.
As an example of protesters, consider the rising resentment against AI adoption in many organizations: many frontline workers in customer service functions see AI chatbots as a direct threat to their own jobs, or find that the AI system creates additional workload when chatbots fail to solve a customer problem. The university sector is also filled with protesters against AI adoption: in the Netherlands, for instance, more than 1,000 educators have signed an open letter to stop the uncritical adoption of AI technologies in academia.
There’s much energy and passion among these employees, but their engagement must be guided.
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The challengers actually want to change, but they dislike the specific plan. Put differently, they say yes to change – but no to the change proposed by management. These employees like new trends and are naturally inclined towards a bias for change. Yet, their engagement does not support where the company wants to go and how. They want a different future than the one you’re proposing, and therefore, they become a liability to effective implementation of a predefined transformation initiative.
There’s much energy and passion among these employees, but their engagement must be guided. Doing so requires that they are heard – you need to listen to their ideas but also set sufficient boundaries. Sometimes being heard is enough to get their support – and if you incorporate one of their ideas, it may make them feel psychological ownership over the initiative. If you can’t get them to support the initiative, you may at least get them to support change, to agree on the inefficiencies of the status quo, and to accept essential boundaries so that they do not derail the transformation.
As an example, consider how a tribe of challengers at IBM saved the company by autonomously paving the way for Big Blue to catch the internet wave in the early 1990s. Here, the employees wanted a change to happen – but they envisioned a very different kind of change than management suggested at the time. The group of rebellious employees made sure that Big Blue caught the internet wave at just the right time by running it as a project in stealth mode and utilizing the Winter Olympics as a scene for demonstrating the value of the internet both externally and internally. Letting challengers work on their own pet projects in a restricted non-core area may be a useful compromise. Examples of this are seen at Google, where employees are allowed to work on their own projects 20% of the time, and at 3M, where they may use 15%. This “free time” encourages experimentation – and is also an effective means to get employees to accept other initiatives than their own for the remainder of their work time.
Specifically, managers need to enable the ride by creating motivation to embark on the journey, building trust, and making the change process easy and fast for hesitators.
The hesitators like the plan, but dislike the prospect of having to change. These individuals recognize the need for change and accept the process towards it – but they feel anxiety or inertia about actually embarking on the journey. As such, they need to be helped along the way.
Specifically, managers need to enable the ride by creating motivation to embark on the journey, building trust, and making the change process easy and fast for hesitators. One way of creating motivation is to create small wins along the way, so that the larger transformation is broken down into smaller, manageable steps. Once these are achieved, the progress should be made explicit – and perhaps even celebrated. Establishing trust can be done by managers emphasizing their experience with this type of transformation – and by highlighting how the change phase will be short and painless.
For a successful example of working with hesitators, consider how nudging practices have helped enable the adoption of safety practices in the process industry: a simple red triangle on jackets helped remind workers to wear gas detectors, and a handprint sticker on a handrail helped remind workers to hold it while taking the stairs. Nudging practices helped hesitators to actually enact safety changes by making it easier to remember and implement. At other times, help for hesitators may include transparency and training in the steps on the journey, or improving the motivation to change through both ‘carrots’ and ‘sticks’.
Having enthusiasts on board is a major asset – but they will need to be effectively harnessed to release their full potential for the transformation to happen.
Enthusiasts like everything – both the plan and the prospect of change. Consequently, they comprise the true supporters or change evangelists within your organization for the specific transformation initiative.
Having enthusiasts on board is a major asset – but they will need to be effectively harnessed to release their full potential for the transformation to happen. Specifically, the managerial task is to elevate their support and utilize their energy to secure progress. One way of doing this is to have the enthusiasts be internal ambassadors for the initiative and help sell it to other employee groups. There is also a need to consider how you can maintain their support. Moreover, due to their engagement and interest, they will likely want to be active participants in your initiative and will want to be kept informed on an ongoing basis.
As an example of how enthusiasts might be leveraged and developed, consider Netflix’s strategic shift into live events. Initially, this started with a few live projects, such as reunion shows, specials, and a couple of NFL matches. Instead of saying the entire company should transform from day one, Netflix gave teams of “live broadcasting” enthusiasts projects on which to build momentum and learn from successes and failures. Gradually, more projects followed with several “small wins” combined with the launch of a formal ambition to expand into live programming. The project enthusiasts could arguably be ambassadors for this transition internally. Moreover, the live programming shift is in many ways complementary to streaming and the mission of Netflix to “entertain the world, one fan at a time.”
It should also be noted that employees may temporarily inhabit different places in the matrix depending on the specific transformation they face: an employee can be very enthusiastic about one transformation (say, implementation of AI) and loudly protest another (say, implementation of green initiatives).
Of course, there are also employees who are always against, or always for the initiative; those who constantly generate their own ideas, and those who are always worried about disruptions to the status quo. But there may be differences that can be observed from transformation to transformation – and therefore, leaders must assess and chart the tribes for each transformation. Moreover, managers can also seek to actively shift employee positions in the matrix through their activities, such as turning a hesitator into an enthusiast by motivating, training, and enabling them to perform the needed changes.
While employees may collaborate widely in the normal course of business, they also belong deeply to one tribe when it comes to transformation.
What remains clear from the ruins of countless failed transformation efforts is that we need to transform our transformations. Neither changes, employees, nor resistance is “one thing,” so we need to unpack their complexities and manage them accordingly. You will therefore need to:
Some practitioners have asked if organizations can really afford four approaches for each transformation. Our response is always the same follow-up question: Can you afford not to do it? By treating employees as a uniform group, you’re essentially dooming your transformation initiative to failure. And that is, of course, more costly than kicking off the project by customizing your change management efforts to four different employee tribes.
While employees may collaborate widely in the normal course of business, they also belong deeply to one tribe when it comes to transformation. Consequently, transformation success is about knowing your tribes and managing them appropriately.
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