David A. Garvin

Michael Roberto

<article-ideainbrief class="article-ideainbrief">
 <h4 class="ideainbrief-title">The Idea in Brief</h4>
 <div class="ideainbrief-contents">
  <p>When a company is teetering on the brink of ruin, most turnaround leaders revamp strategy, shift around staff, and root out inefficiencies. Then they wait patiently for the payoff—only to suffer bitter disappointment as the expected improvements fail to materialize.</p>
  <p>How to make change stick? Conduct a four-stage persuasion campaign: 1) Prepare your organization’s cultural “soil” months before setting your turnaround plan in concrete—by convincing employees that your company can survive only through radical change. 2) Present your plan—explaining in detail its purpose and expected impact. 3) After executing the plan, manage employees’ emotions by acknowledging the pain of change—while keeping people focused on the hard work ahead. 4) As the turnaround starts generating results, reinforce desired behavioral changes to prevent backsliding.</p>
  <p>Using this four-part process, the CEO of Beth Israel Deaconess Medical Center (BIDMC) brought the failing hospital back from near-certain death. Hemorrhaging $58 million in losses in 2001, BIDMC reported a $37.4 million net gain from operations in 2004. Revenues rose, while costs shrank. Morale soared—as reflected by a drop in nursing turnover from between 15% and 16% in 2002 to just 3% by 2004.</p>
  <p>The Idea in Practice</p>
  <p>Use these steps to persuade your workforce to embrace and execute needed change:</p>
  <h2>Set the Stage for Acceptance</h2>
  <p>Develop a bold message that provides compelling reasons to do things differently. <span style="idea-in-practice-example"><span style="idea-in-practice-example-header">Example:&nbsp;</span> </span></p>
  <p>On his first day as Beth Israel Deaconess Medical Center’s CEO, Paul Levy publicized the possibility that BIDMC would be sold to a for-profit institution. He delivered an all-hands-on-deck e-mail to the staff citing the hospital’s achievements while confirming that the threat of sale was real. The e-mail also signaled actions he would take, including layoffs, and described his open management style (hallway chats, lunches with staff). In addition, Levy circulated a third-party, warts-and-all report on BIDMC’s plight on the hospital’s intranet—so staff could no longer claim ignorance. </p>
  <h2>Frame the Turnaround Plan</h2>
  <p>Present your turnaround plan in a way that helps people interpret your ideas correctly. <span style="idea-in-practice-example"><span style="idea-in-practice-example-header">Example:&nbsp;</span> </span></p>
  <p>Levy augmented his several-hundred-page plan with an e-mail that evoked BIDMC’s mission and uncompromising values and reaffirmed the importance of remaining an academic medical center. He provided further details about the plan, emphasizing needed tough measures based on the third-party report. He also explained past plans’ deficiencies, contrasting earlier efforts’ top-down methods with his plan’s collaborative approach. Employees thus felt the plan belonged to them. </p>
  <h2>Manage the Mood</h2>
  <p>Strike the right notes of optimism and realism to make employees feel cared for while also keeping them focused on your plan’s execution. <span style="idea-in-practice-example"><span style="idea-in-practice-example-header">Example:&nbsp;</span> </span></p>
  <p>Levy acknowledged the pain of layoffs, then urged employees to look forward to “[setting] an example for what a unique academic medical center like ours means for this region.” He also issued progress updates while reminding people that BIDMC still needed to control costs. As financial performance picked up, he lavishly praised the staff. </p>
  <h2>Prevent Backsliding</h2>
  <p>Provide opportunities for employees to practice desired behaviors repeatedly. If necessary, publicly criticize disruptive, divisive behaviors. <span style="idea-in-practice-example"><span style="idea-in-practice-example-header">Example:&nbsp;</span> </span></p>
  <p>Levy had established meeting rules requiring staff to state their objections to decisions and to “disagree without being disagreeable.” When one medical chief e-mailed Levy complaining about a decision made during a meeting—and copied the other chiefs and board chairman—Levy took action. He responded with an e-mail to the same audience, publicly reprimanding the chief for his tone, lack of civility, and failure to follow the rule about speaking up during meetings.</p>
 </div>
</article-ideainbrief><p>Faced with the need for massive change, most managers respond predictably. They revamp the organization’s strategy, then round up the usual set of suspects—people, pay, and processes—shifting around staff, realigning incentives, and rooting out inefficiencies. They then wait patiently for performance to improve, only to be bitterly disappointed. For some reason, the right things still don’t happen.</p>

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<p><span class="reprint">Reprint: R0502F<br />
</span></p>
<p>Faced with the need for a massive change, most managers respond predictably. They revamp the organization&#8217;s strategy, shift around staff, and root out inefficiencies. They then wait patiently for performance to improve&#8212;only to be bitterly disappointed because they&#8217;ve failed to adequately prepare employees for the change. In this article, the authors contend that to make change stick, leaders must conduct an effective persuasion campaign&#8212;one that begins weeks or months before the turnaround plan is set in concrete.</p>
<p>Like a political campaign, a persuasion campaign is largely one of differentiation from the past. Turnaround leaders must convince people that the organization is truly on its deathbed&#8212;or, at the very least, that radical changes are required if the organization is to survive and thrive. (This is a particularly difficult challenge when years of persistent problems have been accompanied by few changes in the status quo.) And they must demonstrate through word and deed that they are the right leaders with the right plan.</p>
<p>Accomplishing all this calls for a four-part communications strategy. Prior to announcing a turnaround plan, leaders need to set the stage for employees&#8217; acceptance of it. At the time of delivery, they must present a framework through which employees can interpret information and messages about the plan. As time passes, they must manage the mood so that employees&#8217; emotional states support implementation and follow-through. And at critical intervals, they must provide reinforcement to ensure that the desired changes take hold and that there&#8217;s no backsliding.</p>
<p>Using the example of the dramatic turnaround at Boston&#8217;s Beth Israel Deaconess Medical Center, the authors elucidate the inner workings of a successful change effort.</p>

Change Through Persuasion

Reprint: R0502F Faced with the need for a massive change, most managers respond predictably. They revamp the organization’s strategy, shift around staff, and root out inefficiencies. They then wait patiently for performance to improve—only to be bitterly disappointed because they’ve failed to adequately prepare employees for the change. In this article, the authors contend that to make change stick, leaders must conduct an effective persuasion campaign—one that begins weeks or months before the turnaround plan is set in concrete. Like a political campaign, a persuasion campaign is largely one of differentiation from the past. Turnaround leaders must convince people that the organization is truly on its deathbed—or, at the very least, that radical changes are required if the organization is to survive and thrive. (This is a particularly difficult challenge when years of persistent problems have been accompanied by few changes in the status quo.) And they must demonstrate through word and deed that they are the right leaders with the right plan. Accomplishing all this calls for a four-part communications strategy. Prior to announcing a turnaround plan, leaders need to set the stage for employees’ acceptance of it. At the time of delivery, they must present a framework through which employees can interpret information and messages about the plan. As time passes, they must manage the mood so that employees’ emotional states support implementation and follow-through. And at critical intervals, they must provide reinforcement to ensure that the desired changes take hold and that there’s no backsliding. Using the example of the dramatic turnaround at Boston’s Beth Israel Deaconess Medical Center, the authors elucidate the inner workings of a successful change effort.

Change Through Persuasion

Summary.

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