The wealth management industry is undergoing a rapid change, with the most recent being the new DOL fiduciary rule positioned to transform the way the financial industry delivers investment advice.
In a typical firm, people in charge of change management wear many hats (including cat herder). And it’s not just the roles you might expect, such as project management and IT support. Other roles that change managers assume include therapist and babysitter, according to Dr. R. S. Jerome, speaking on change management at the recent Laserfiche Empower conference.
While many people hate change, even when it’s an improvement, change is necessary to survival, Jerome said, quoting Charles Darwin: “It is not the strongest nor the most intelligent of the species that survives…it is the most adaptable to change.”
The first question everyone asks in a change management project is “Why?,” Jerome said. To help gain buy-in—whether it’s from the executives who approve the project or the employees and others who participate in it—it’s important for the answer to that question to be tied to a necessary business improvement, he said.
Moreover, in addition to making sure people understand the motivation to change, they need to understand why changes need to happen now, Jerome said. People explaining the change need to communicate the pressure or sense of urgency that is leading management to decide to make the change at this moment, he said.
Jerome also described the “SCARF” model of motivating people, which helps you plan interactions with other people to minimize threats and maximize rewards in each of five areas:
- Status, which is about relative importance to others
- Certainty, which concerns being able to predict the future
- Autonomy, which provides people a sense of control over events
- Relatedness, which is a sense of safety with others
- Fairness, which is a perception of fair exchanges between people
One of the most critical factors in implementing change is support from management, Jerome said. This can include resources, champions, role models, and guides. Communication in general is also critical to the success of a change management project, he added. In fact, it’s almost impossible to communicate about a particular change too much. “Share the plan,” he advised. “Probably to the point of being obnoxious.”
It’s also important to have a plan for how the change will be implemented, Jerome said. The plan provides a framework for gaining input and addressing concerns. Examples of items to include in such a plan might be:
- Purpose of the project
- Expected outcomes
- Which people are expected to change
- Specific answers to the questions they might have about the process
- Staff or stakeholders who may be resistant to change
- An easily understood reason for the change
- Motivation for the people expected to change: What’s in it for them?
- Rewards and other positive reinforcement
With the right plan in place, change management is…well, not exactly easy, but it becomes more like babysitting, Jerome said. That said, there’s still plenty that can go wrong in a change management process, he warned to avoid the following:
- Making the change an option rather than a requirement
- Focusing only on the process
- Conversely, focusing only on the results
- Not involving those expected to change
- No “training the trainer” or other internal input
- No change in reward systems
- Uncommitted leadership
- Wrong size—implementing something that’s either too large or too limited for your organization
- No follow-through to determine what worked, what didn’t, and what needs—yes, more change
But no matter how careful you are, something will always go wrong, Jerome admitted.
Overall, Jerome said, it’s important to remember that change is a process, not a single activity. But while it’s important to have a model to follow for change management to ensure that everyone has a chance to be involved in that process, it’s a mistake to use some sort of cookie-cutter approach that isn’t specific to your organization. Change is a process that is unique to your organizational culture, as well as to the division, unit, and even to the individual employees, Jerome said.
That’s why it’s important to think of yourself as a therapist when you’re working on a change management project, Jerome said. Therapists can’t say things like, “Just get over it,” he advised. Similarly, respecting the views and concerns of the people being affected by the change is critical to your project’s success.
Maybe you could just whisper it to yourself.
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