The true cost of change

If the pace of change is greater than ever, what is the impact on employees? 

Change is overrated. The almost religious belief of some business leaders that change is intrinsically desirable ignores the checkered history of mergers and acquisitions – 60% of which actually reduce shareholder value – and the enormous toll that change takes on people in terms of anxiety, burn-out, ill health and wasted talent. In The Problem with Change: and the Essential Nature of Human Performance, Ashley Goodall, a former senior HR executive at Cisco and Deloitte, attacks the status quo and proposes a radical alternative. 

Describing the impact of constant change as “life in the blender,” Goodall is critical of corporate obfuscation, double-speak and confusing “word salad.” He has written a trenchant and entertaining critique of the practice of treating people as human resources to be used and discarded. Polemical, perhaps, but it is rigorous – Goodall draws on an enormous body of data about employee engagement and productivity collected by Cisco to improve its HR practices. 

Goodall’s thesis is simple. People need a degree of certainty and predictability in their working lives. They perform at their best, are most productive and stay longer when their work is meaningful and they have good relationships with their co-workers. Team dynamics are critical. Excessive change undermines all this. The key unit for providing this environment is neither the corporation nor the individual, but the team. 

With the prevalence of matrix working, Goodall points out, most businesses have no idea how many teams they actually have, nor how well they perform. It is hardly surprising that the effect of business change on teams has been almost entirely ignored and is poorly managed. By contrast, businesses devote considerable resources to minimizing the impact of change on their customers. 

Goodall acknowledges that change is inevitable and often necessary. So what can be done? First, recognize that constant change is highly stressful and costly. Weigh the pros and cons of any change carefully, rather than assuming it must be for the good. Look to provide a sense of stability and predictability for individuals experiencing change, and whenever possible, keep high-performing teams intact: workers in teams that stay together remain more engaged and motivated than individuals whose teams are broken up and re-assigned. Above all, recognize and reward skill in leading teams. Organizations need to invest in training team leaders and promoting excellence in leading people. Cisco’s data showed that leaders who were distinctive and predictable had the highest impact.  

Goodall argues that HR has become obsessed with gaining ‘a place at the table’ on executive boards, to the detriment of their role in championing employees’ interests. Refocusing on protecting employees would improve productivity and thus be in the interest of shareholders. He also argues that HR has a valuable role in training team leaders. 

But there’s a catch. HR has a poor record of safeguarding employees: instead, it has been the executive board’s right hand in ruthless cost-cutting and restructuring. Moreover, few outsiders would regard HR professionals as experts in, or exemplars of, good team leadership. 

Will anything change? The post-pandemic phenomenon of ‘quiet quitting’ suggests that a new generation may be less willing to tolerate the psychological price of excessive turbulence. Yet the primary focus of business leaders remains shareholder value. Although Goodall makes good use of Cisco’s data, he is unable to demonstrate a general and measurable link between stability and business performance. So, until a stronger business case is made for a different approach to change, I wouldn’t hold
my breath. 

Piers Cain is a management consultant