4. Change Management January 2013
“The ability to learn faster than your competitors
may be the only sustainable competitive advantage”
Arie de Gues
4
5. Change Management January 2013
Summary of today
Change in your business
Change in your people
01
02
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6. Change Management January 2013
Our roadmap for this morning
Change in your business
1. Visioning Orbit (touch on briefly)
2. Red Ocean / Blue Ocean thinking
6
Change in your people
3. X model Engagement
4. The Golden Circle
9. Change Management January 2013
The competition changes you and your business
You initiate the change that you want to create in the market
Low growth thinking
High growth thinking
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11. Change Management January 2013
Investors in
People
5%
reduction
3%
reduction
3%
reduction
£100k
-£400k
-£600k
Articles in
Trade Press
Featured
on local
radio & TV
11(2)
18(2)
28(3)
ABC
Limited
Preferred
supplier to
3 national
health
OEMs
50% automotive
40% medical
10% aerospace
£1.2 mil
£2.3 mi
£4 mil
30% automotive 70%
medical
0% aerospace
Self-Managing
Teams
Preferred
supplier to
3 regional
health
OEMs
Preferred
supplier to 3
Manchester
health OEMs
DEF
Limited
GHI
Limited
China
Europe
National
Profit Centres with
Bonus scheme 20%
45%
75%
Av. value - projects Net Promoter
Score
Net Profit
Turnover £
No. of
partners
/ route to
market
Key Markets
No. of
employees
No. of
customers
(projects /
retainers)
Apr 13 /
Mar 14
Apr 14 /
Mar 15
Apr 15 /
Mar 16
Av. Value - retainers
Blend of
business
9
£720K
(40%)
50 / 55
13
10 (40%)
£1.8M
£800K new
£250K existing
£800K
retainers
East
Mids./Nat
ional
(50/50)
£16K £14.5K
8.5
£420K
(35%)
40
/40
12
£1.2M
£600K new
£200K existing
£350K retainers
£50K recurring
£15K
7 (30%)
East
Mids./National
(60/40), incl.
Notts.
£8.75K
£14K 8
£240K
(30%)
35/
32
10
£500K new
£150K existing
£120K retainers
£30K recurring
£800K
East
Mids./Natio
nal
(80/20) incl
Sheffield,
10+
£3.75K
4 (20%)
12. Change Management January 2013
Changing your business
Red Ocean thinking
To create a compelling point of difference to your competitors
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13. Change Management January 2013
Contested market
strategy
Blue Ocean strategy
Compete in existing market space Create uncontested market space
Beat the competition Make the competition irrelevant
Exploit existing demand Create and capture new demand
Make the value-cost-trade-off Break the value-cost trade-off
Strategic choice is differentiation or
low cost
Strategic choice is differentiation
and low cost13
14. Change Management January 2013
Differentiation or low(est) cost
…your compelling point of difference?
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20. Change Management January 2013
Exercise: Alternative Grid in your industry
In pairs:
• Define what your product or service delivers in terms of value
• Choose a „differentiation‟ tool
• Apply that tool to your product or service – how can you increase
value to the customer?
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21. Change Management January 2013
Changing your business
Blue Ocean thinking
To create uncontested market spaces ripe for growth
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22. Change Management January 2013
Red Ocean…growth will always be limited by the fact that there
is both stiff competition and fewer customers
Blue Ocean…if we create new uncontested markets we make our
competitors irrelevant and invest fresh markets ripe for growth
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23. Change Management January 2013
Contested Market
Strategy
Blue Ocean Strategy
Compete in existing market space Create uncontested market space
Beat the competition Make the competition irrelevant
Exploit existing demand Create and capture new demand
Make the value-cost-trade-off Break the value-cost trade-off
Strategic choice is differentiation
or
low cost
Strategic choice is differentiation
and low cost
Game enhancer or game changer?
24. Change Management January 2013
Strategic innovation
Value
Increase
Cost
reduction
Strategic
Innovation
Company actions
favourably affect both
cost structure and value
proposition
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25. Change Management January 2013
Create
Which factors should be
created that your industry
has never offered?
Raise
Which factors should be
raised well above the
industry's standard?
Reduce
Which factors should be
reduced well below the
industry‟s standard?
Eliminate
Which of the factors that
your industry takes for
granted should be
eliminated?
Disrupting the market
Costs Value
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27. Change Management January 2013
Think you’re in a tough industry?
• Declining industry
• Very limited growth
• Supplier power high
• Buyer power high
• Negativity about using animals
• Seat prices tumbling
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29. Change Management January 2013
The strategy canvas of Cirque du Soleil
Price
Star
performers
Animal
shows
Multiple show
arenas
Fun and
humour
Thrills
and
danger Unique
venue
Aisle
concessions
Smaller Regional Circuses
Low
High
Amount
company
offers buyers
Factors the industry
competes on
Ringling Bros. and Barnum & Bailey
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30. Change Management January 2013
Create
Raise
Reduce
Eliminate
Eliminate |reduce| raise| create: Cirque du Soleil
• Star performers
• Animal shows
• Aisle concession sales
• Multiple show arenas
• Unique venue
• Fun and humour
• Thrill and danger
• Theme
• Refined environment
• Multiple productions
• Artistic music and dance
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31. Change Management January 2013
Three elements to a great growth strategy
3. TAG LINE:
RE-INVENTING CIRCUS
Animal
shows
Multiple
Arenas
Thrills &
Danger
Unique
venue
Fun/
Humour
Artistic
music/dance
Refined
environment
2. DIFFERENTIATION
Price
Large Nationals
Cirque du Soleil
Low
Hig
h
Smaller
Regionals
1. FOCUS:
Eliminate…
• Star performers
• Animal shows
• Aisle concession sales
• Multiple show arena
• Unique venue
• Fun and humour
• Thrill and danger
• Theme
• Refined environment
• Multiple productions
• Artistic music and dance?
Raise
Reduce Create
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32. Change Management January 2013
Creating uncontested market spaces
Considering alternative industries
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33. Change Management January 2013
Considering alternative industries
Industry:
Principal offering:
Alternative industries:
(not just substitutes)
Bus
Transportation of commuters
• Car
• Trains
• Taxis
• Trams
Bus Train
Highly
attractive
aspects
Unattractive
aspects
Unattractive
aspects
Focused on most lucrative commuter
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34. Change Management January 2013
Look across alternative industries grid
Why
customers
would
choose
Why
customers
would not
choose
The Bus The Train
Relatively cheap
No problems with parking
No drink & drive problems
Town centre drop off
Bus lanes – less congestion
Good for environment
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35. Change Management January 2013
Look across alternative industries grid
Why
customers
would
choose
Why
customers
would not
choose
The Bus The Train
Speed... no traffic congestion
Cleaner more comfortable
Better class of passengers
Easier to find out train times
Relatively punctual
More comfortable
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36. Change Management January 2013
Look across alternative industries grid
Why
customers
would
choose
Why
customers
would not
choose
The Bus The Train
Unpleasant environment
Unreliable
Vulnerability - possibly unsafe
Long, possibly inconvenient route
Not knowing when next bus is due
Waiting in wind and rain
Moody bus drivers
Need the “right change”
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37. Change Management January 2013
Look across alternative industries grid
Why
customers
would
choose
Why
customers
would not
choose
The Bus The Train
Relatively expensive at peak times
Station is not always convenient
Got to get to station
Have to wait for a train
Poor service at non-peak times
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38. Change Management January 2013
3. TAG LINE:
2. DIFFERENTIATION
1. FOCUS
Eliminate
• Delays caused by congestion
• Stigma about using the bus
• Complex timetables
• Maintenance of older Buses
• Buying ticket from driver
Raise
• Reliability & frequency of service
• Directness of service into cities
• Green credentials
• Level of customer information
• Quality / cleanliness image
• Commuter targeted marketing
Reduce
• Waiting times
• Boarding time
• Stigma about using the bus
• The number of buses and drivers
• Bad press about old polluting buses
• Overall running costs on busy routes
Create
• Off road transit routes
• Deep windows & clear interior space
• Cash, Smart card & Mobile ticketing
• A real alternative to car drivers
• Bus Pilots (rather than Bus Drivers)
High
Low
StreetCar
Reliability Comfort &
environment
Frequency Ticket
price
Speed of
journey
Use of E -
ticketing
Amount
company
offers
buyers
Traditional bus
Hybrid
Traditional train
Off road (no
congestion) route
Running
Costs
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42. Change Management January 2013
Exercise: Alternative Grid in your industry
• Define what your product or service delivers
• Choose an alternative that delivers the same outcome
• Use the grid to compare your product/service with the alternative
• What could be introduced to your industry?
• Which aspects should be removed?
Ensure that you look at a ALTERNATIVE INDUSTRY (not a
COMPETITOR)
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43. Change Management January 2013
TAG LINE:
Eliminate Raise
Reduce Create
FOCUS
Low
High
Amount company
offers buyers &
hence invests
Costs
Value
DIFFERENTIATION
To take away
Blue Ocean canvas
You can now begin to develop a full
blue ocean canvas for the strategy
you have just made using the
alternative industries grid for your
business
43
44. Change Management January 2013
Red vs. Blue Ocean strategies
Ask customers how to improve to fuel their growth strategy01
Benchmark against competitors on things that are important to
customers
02
Use Blue Ocean strategy?03
Not much growth
More growth but is it enough?
44
45. Change Management January 2013
Investors in
People
5%
reduction
3%
reduction
3%
reduction
£100k
-£400k
-£600k
Articles in
Trade Press
Featured
on local
radio & TV
11(2)
18(2)
28(3)
ABC
Limited
Preferred
supplier to
3 national
health
OEMs
50% automotive
40% medical
10% aerospace
£1.2 mil
£2.3 mi
£4 mil
30% automotive 70%
medical
0% aerospace
Self-Managing
Teams
Preferred
supplier to
3 regional
health
OEMs
Preferred
supplier to 3
Manchester
health OEMs
DEF
Limited
GHI
Limited
China
Europe
National
Profit Centres with
Bonus scheme 20%
45%
75%
Av. value - projects Net Promoter
Score
Net Profit
Turnover £
No. of
partners
/ route to
market
Key Markets
No. of
employees
No. of
customers
(projects /
retainers)
Apr 13 /
Mar 14
Apr 14 /
Mar 15
Apr 15 /
Mar 16
Av. Value - retainers
Blend of
business
9
£720K
(40%)
50 / 55
13
10 (40%)
£1.8M
£800K new
£250K existing
£800K
retainers
East
Mids./Nat
ional
(50/50)
£16K £14.5K
8.5
£420K
(35%)
40
/40
12
£1.2M
£600K new
£200K existing
£350K retainers
£50K recurring
£15K
7 (30%)
East
Mids./National
(60/40), incl.
Notts.
£8.75K
£14K 8
£240K
(30%)
35/
32
10
£500K new
£150K existing
£120K retainers
£30K recurring
£800K
East
Mids./Natio
nal
(80/20) incl
Sheffield,
10+
£3.75K
4 (20%)
47. Change Management January 2013
Changing your business
X model of engagement
to win the hearts and minds of your team
47
48. Change Management January 2013
Low growth thinking
High growth thinking
Successful change management is 80% mechanics and 20%
emotion
Successful change management is 20% mechanics and 80%
emotion
48
49. Change Management January 2013
What can go wrong when you present a highly challenging
high growth visioning orbit and plan?
49
51. Change Management January 2013
Almost engaged
Engaged
Honeymooners
Hamsters
Crash & Burners
Disengaged
Copyright Blessing White
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52. Change Management January 2013
Exercise
Mapping your team on the X model of engagement
• Consider the key members of your business or team
• Assuming you have shared the visioning Orbit with them,
• where do they sit on the X model of engagement currently?
• Are they all in the “engaged” box or are there some individuals that
need your attention to help move them?
• Indicate who you would like to move and to where within the next three
months
• Discuss in pairs
52
53. Change Management January 2013
Bob
Sue
Sam
Brian
Lee
Phil
Paul
Bill
Heather
Jed
John
Mapping your
Team on the X
model of
engagement
53
54. Change Management January 2013
Engagement for executive leaders
C Develop a community feel to achieving the
company‟s growth goals
A Authentic… keep it real
S Significance… help all employees find greater
meaning in their work
E Excitement… keep individuals passionate
about what they do
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55. Change Management January 2013
Changing your business
The Golden Circle
to help engage individuals buy into change
55
56. Change Management January 2013
People don‟t buy / buy into what you
do, but why you do it!
Hiring / engaging those “who
believe what you believe”
56
57. Change Management January 2013
Apple
Rogers Architects
We believe in challenging the status quo in everything we do. We
believe in thinking differently.
A building without celebration is just construction
57
Easyjet
We believe in making travel easy and affordable.
58. Change Management January 2013
Logistics business
E-commerce business
We love our customers so they can be loved by theirs.
We believe in a world of possibilities, through the Internet.
58
59. Change Management January 2013
Exercise
Golden Circle for your business
• Create the 3 circles
• Produce the „what‟, „how‟ and „why‟ for your business
• How do you communicate to your people and, indeed, your customers?
• Do you „keep it real‟
• What areas do you need to work on?
• Discuss in pairs
59
60. Change Management January 2013
What will you do differently as a result of this
session?
Start doing Stop doing
Do more Do less
60
63. Change Management January 2013
Changing your business
Pain and pleasure matrix
to help motivate individuals buy into change
63
64. Change Management January 2013
Low growth thinking
High growth thinking
Everybody is different. You can‟t motivate all the people all the time
Everyone is different. However all people are ultimately driven by the
motivating forces to avoid pain and attract pleasure all of the time
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65. Change Management January 2013
“The aim of the wise is not to secure pleasure, but to
avoid pain.”
Aristotle
65
66. Change Management January 2013
Pain / pleasure principle is key to help people buy
into change and motivated to take action
Discuss the pain of DOING it
The pleasure of DOING it
01
03
The pain of NOT DOING it
The pleasure of NOT DOING it
04
05
Identify what they‟ve been putting off01
66
68. Change Management January 2013
DoingitNotDoingit
Pleasure Pain
Losing weight
Pain of doing it
• I don‟t like exercise
• I haven‟t got time
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69. Change Management January 2013
DoingitNotDoingit
Pleasure Pain
Losing weight
Pleasure of doing it
• I‟ll be able to wear THAT swimwear
• I‟ll fit my expensive suit / dress
• I‟ll feel better and fitter
69
70. Change Management January 2013
DoingitNotDoingit
Pleasure Pain
Losing weight
Pain of not doing it
• I get tired when I run for the bus
• My doctor warned me about my
health
• I‟ve clothes in my wardrobe that I
can‟t get into
70
71. Change Management January 2013
DoingitNotDoingit
Pleasure Pain
Losing weight
Pleasure of not doing it
• I like the taste of comfort food
• It gives me an excuse to buy new
clothes
• I don‟t have to go to the effort
71
72. Change Management January 2013
Winning Lee’s commitment
We want Lee to more proactively lead
the high growth strategy related to
penetrating new overseas markets
72
73. Change Management January 2013
DoingitNotDoingit
Pleasure Pain
Pain of doing it
• It‟s a poison chalice… I could easily fail and lose
my blossoming reputation with the Directors
• Criticism surrounding missing lucrative UK based
opportunities whilst away on overseas business
• Frustration caused by forms, language, currency...
• Even more time than normal stuck in hotels and
travelling, away from my family and friends
73
74. Change Management January 2013
DoingitNotDoingit
Pleasure Pain
Pleasure of doing it
• The adulation of being the one who lead the
company into new more profitable overseas
markets when UK growth was slowing
• Feeling empowered – shaping my own destiny
• Could help me successfully see even more fresh
innovations for the business like new product
ideas
• More exciting than spending everyday in Slough!
74
75. Change Management January 2013
DoingitNotDoingit
Pleasure Pain
Pain of not doing it
• Living with the regret that I missed the opportunity to
be recognised as the person who took this business
to the next level of growth
• Feeling guilty if the “UK only” strategy fails to
generate sufficient growth to achieve our vision
• Jealousy… if one of our competitors won the
contract
• Further reinforcement of the view that my boss has
of me… that I “don‟t think big enough”
75
76. Change Management January 2013
DoingitNotDoingit
Pleasure Pain
Pleasure of not doing it
• I can now keep focused on our (my) UK strategies
without the disruptions caused by overseas ideas
• A feeling of greater security… I‟ve avoided this
potentially risky venture
• Far more certainty about what I‟m dong day to day
• Easy life… less stress and demands placed on me
and my time
76
77. Change Management January 2013
Getting leverage
Ask PAIN-inducing questions
Get them to picture what this may look like
01
03
Ask PLEASURE - associating questions
Get them to picture what this may look like
04
05
Complete the pleasure pain matrix physically or mentally?01
77
78. Change Management January 2013
Exercise: Complete the matrix for one of your staff
1. Consider one of the people you wish to better engage
2. Complete the pain pleasure matrix as you think they may see it.
3. Explain this to the person you have partnered.
4. Role play the conversation where you will be bringing them up to pain
threshold by asking PAIN - inducing questions (plus imagery) and
PLEASURE – inducing questions (plus imagery)
78
79. Change Management January 2013
What will you do differently as a result of this
session?
Start doing Stop doing
Do more Do less
79
By way of introduction…1. Richard Crooks- high growth space for about 13 years.Google – 885 Million. Used our experience - a few big things – tools and techniques - can make the most difference.The majority of businesses in the UK don’t grow significantly – so it follows that you have to do different things to achieve different results that the masses.
Practice – best way to learnNo role playsWhy is change management important to a high growth business? Why are you here today?
Fast growth businesses like you use change to be different, better and faster than the competition. Creators of change to get ahead of the competition, not reacting to change / playing catch up (ahead of the curve vs. behind the curve)
Change in people – everything else we can change fairly easily – your marketing, your suppliers, your IT, change in people is hard
The 4 Big Things known to help drive “high growth change” we are sharing with you today are:
Your attitude change…which I’ll come back to later.Different people have different attitudes to change ….bring it on!….scary
9.15
.
Or a high growth business…change starts with your vision – a different place you want to be in the future.
So red ocean thinking is about competing in the existing market space, but doing so effectively through a compelling point of difference.Competitors will catch up…but as they catch up your moving on to the next thing.
In the red ocean space…you have two options …to differentiate or become the lowest cost producer in the market.Giving more for more, or providing less for less. Waitrose or Aldi of your market? Differentiation or low cost? British Airways or Ryan Air?
More (value) for more (cost/price)Less (value) for less (cost / price)Need to be lowest cost for sustainability competitive advantage or otherwise others can undercutDon’t mistake this pm More for less…about more return on your time / investment in creating scale / growth and value in the business.
Is about…They get more value from you than your competitors.Extenduiate the value you provide.
Most businesses presume that they know what customers value but in actual fact they don’tPoint of differentiation / value giving£2 vs. £2.89 / £1 kg £2.49 300g ….sure an extra cost but outweighed by the extra price.Espace…price….when we asked it was about keeping their own customers happy….making sure that they never let their customers down, so their customers can keep their own happy.
Seek to deliver greater differentiation or value – useful tool
Another
Core & surround: re-positioned to be “Freight Emergency Service” our customers keeping their customer’s happyVirgin – cheeky, uniforms, Add cold water and apply to forehead, alternatively contact Espace
9.30
9.50Most businesses compete in red oceans – supply higher than demand; stiff competitionVery High growth is focused on creating uncontested space with demand far out stripping demand
Creating new market space.Only you who does what you do.Competitors will catch up…it will take them longer but they will play to the rules you set – the challenge is to continually create blue oceans.
Back to understanding value – what value your customers are buying.Increasing value or creating new value for customers and at the same time reducing or eliminating less valuable features or services.
10.00Few minutes.EliminateBookstores- PublishesReduceDistribution costs Printing costsRaise Huge selection of products / Choice of productsChoice of media – book / ebookCreateReviews Product Recommendations Alternative / more convenient reading platformKindle
10.15What industry am I talking about? Circus
Strategy Canvas of “Circus industry”
Key to blue ocean thinking is to seek inspiration from an alternative industry…which is an alternative to the customers you are targetingCombined the circus with an alternative industry – the Theater. Opened up a new customer base – adults theater goers Changed the rules of competition in the industry.
Price is not cost.Unit running costs less per show
Example of a bus company did some work with….
Target Small businessFactors: confident that can discharge their services effectively / qualified (given), price - vfm, availability, expertise & understanding – helping them to groew- Take cost out of the stuff that didn’t add value- Simple & Fun- Service - experience - Looking to the future – now backwards- Available when the client wants us not 9-5- Empathy – understanding, relationship, helpful tools, community. New opportunities
Blue ocean – to achieve growth – square with your attitude to change.
Your team will react when they see the Orbit – probably more incline to see the danger than the opportunity.
Let’s look at a model that would shift possible negative feelings to positive ones.
X model of engagementHigh Growth businesses are great at engaging their employees and giving them high levels of job satisfactions. They use engagement to generate buy in and commitment to change. They give employees purpose and satisfaction in their work. Aboutaligning employees’ values, goals, and aspirations with those of the organization.Full engagement represents an alignment of maximum job satisfaction (“I like my work and do it well”) with maximum job contribution (“I help achieve the goals of my organization”).
From Blessing White’s Employee Engagement report 2011Engaged: at apex of personal and organisational interests align. Contribute fully – ‘A’ graders. Almost engaged: high performers, reasonably satisfied, may be tempted by other things – closest to full engagement so worth investing in. (early adopters – make considered decisions)Honeymooners: in a temp holding area, enthusiastic and happy but not sure of role and fit yet – need to move them to be more aligned and productive. Hamsters: working hard but on non essential tasks so contributing little –others have to contribute more due to their lack of productivity, can lead to resentment.Cash & Burners: Top producers but exhausted, not achieving their personal definition of success, criticise executives, can become bitter – likely to leave or work less hard and become engaged. Disengaged: Didn’t start as bad apples, disconnected and underutilised, sceptical and their negativity can be contagious.
From Blessing White’s Employee Engagement report 2011PLOT YOUR PEOPLE ONTO THE GRIDIndicate movement
X model based on Engagaement:Blessing White shows that identifying and trusting executive leaders is one of the biggest contributors to engagement. All of this engagement stuff is a bit nebulous and about emotions ….don’t do it very well.
Creator of this conceptHow great leaders inspire action0.15-4.407.33-8.16Hear about Martin Luther King & the Wright Brothers
External / internal Do you believe Simon Sinek…if you believe I’ve engaged you in the model
Alignment…Being authentic / trustEasy jet –lost their purpose; we’re on our cutsomers side…everything we do is about this…marketing ”Europe by Easyjet”
How do you get people to change? Engaging staff and change management has to be done at the individual level and an emotional level. You have to understand what drives and motivates people. Why do people behave in the way that they do? What motivates someone to buy into this growth strategy? What's in it for me? Base decisions on avoiding pain and gaining pleasure; both are biologically driven and constitute a controlling force in our lives. Will do far more to avoid pain than we will to gain pleasure. Pain is the greater motivator in the short term.
avoiding pain is a more powerful motivator than the desire for obtaining pleasure.Help them find pleasure through avoiding pain.
Most People know that they really want to change, yet they just can’t get themselves to do it! Its not a lack of capability but rather a lack of motivation. Turn change from a ‘should’ to a ‘must’. Developing a state of urgency through recognising the pain involved in not changing. The only way we’re going to make a change now is if we create a sense of urgency that’s so intense that we’re compelled to follow through. Comes down to those twin powers that shape our lives, pain and pleasure.
Let’s take Lee from our previous example, we want him to more proactively lead the high growth strategy related to penetrating new overseas markets so this is how we do it.
Walk through these quicklyThe example is in the worksheets.
Walk through these quicklyThe example is in the worksheets.
Walk through these quicklyThe example is in the worksheets.
Walk through these quicklyThe example is in the worksheets.
Make it so – NOT changing is much more painful than changing.If the pain involved in not changing isn’t strong enough than people are much less likely to change. Pain threshold. Pain is that intense that they must change now.