Episode 142: Dealing with and Beating Change

welcome to another edition of "Around with Randall" your weekly podcast for making your nonprofit more effective for your community and here is your host the CEO and founder of Hallett Philanthropy, Randall Hallett. It's wonderful to have you around for this edition of "Around with Randall". We talk today about change, which is a tough subject as our nonprofit world, and just in world in general, is seeing a lot of upheaval, a lot of adjustments. Change becomes a really important conversation piece.

So let's take a couple of examples that may be happening in your world, that maybe there is a change in the leadership structure. And I'm talking about people, I'm talking about the structure. I work with a client who has recently removed all of their Chief Operating officers from their local institutions. That's a massive change at the local level in terms of leadership, as well as reporting, as well as responsibilities. Possibly you're dealing with or having thoughts or hearing rumblings of a merger where two organizations come together, and that's going to have massive amounts of change. There could be budgetary changes. We're seeing pressure put on nonprofits to reduce their expenditures so whether that's personnel or change in responsibilities, increasing philanthropy, how do we engage? Change staffing and leadership changes, I.E, people, meaning we're as a great resignation slash reshuffling occurs that we have a lot of new leaders and they have their own perspectives that may be different different ways of doing things that are maybe not in line with what our experiences are.

Change is hard by definition. Most organizations and most people don't properly estimate how much change should actually occur in their life. So we mentioned a bunch on the business front. A few moments ago this occurs in the home front as well. Things like changes in family structure, or changes when we move, or we underestimate that sometimes these changes are good in the long term, overall, because status quo is comfortable. We tend to look towards not making major changes, and by the way there is nobody who likes change less than me. I eat the same thing for breakfast every morning. I drink the same Diet Mountain Dew out of the same cup for the place. I come to the same office. I am a routine artist. You change that. I don't necessarily like it but we'll get this. What how we do work with that here in a moment in the Tactical. When change is neglected, like we hold on too long, it becomes harder. And frankly the kind of the chaos that occurs inside of our organizations and our relationships, inside our departments, whatever gets more challenging, we get more distracted by other things because we are all of a sudden seeing all of the pits rather than the opportunities, and that leads to delays in what we're trying to accomplish. It leads to breakdowns and relationships and even relationships in terms of interpersonal. But people say I'm leaving. I'm gonna go do something else in another organization because I know change should occur and they're not going to do it here.

Budget and financial issues occur when you have a resistance to change, when the economic model doesn't work anymore and everyone holds on for dear life. Eventually it collapses. We also lose trust in our organization and our leadership when we know change should occur but it doesn't. And we don't have the power, maybe, to implement it. Or we're one of a group of leaders and there's resistance. You lose trust in the organization, in the process, and in the people you possibly work with or work for.

And finally there's reputational damage, and I don't mean just internally as nonprofits. We are living on this ability for us to build relationships and trust, and if there's reputational damage because we didn't change then that affects our ability to build those relationships that can make the difference in philanthropic support that causes long-term problems.

I think we can also break apart the resistance to change inside an organization's by kind of three levels executive mid-manager or mid-level managers. And it just, the great every day employees, executives, find resistance in change because it affects strategy that they built out. It affects finances that they're used to. It also can affect compensation, at least the way in which they are compensated or used to be compensated. Executives sometimes find themselves, when they don't see the strategy and they see their own finances and the companies or organizations finances possibly compromised, they get nervous. Even in the short term you see the down, but long term possible up there's usually Executives, kind of hesitancy. Mid-level managers are all about power.

All of a sudden what they thought they controlled and how they controlled it is gone. It's a loss of control and power and in the same vein they probably are being asked those mid-level managers to keep things moving forward, but at the same time trying to figure out how they're going to do things differently. And that leads to overload too much to do paralysis by analysis. Sometimes because they don't know what to do for the front line employees who are the, usually, the bread and butter of any nonprofit. They really don't know what's going on if it's not done correctly, and that causes issues and there's a fear of the unknown. I think that we underplay how even me are concerned about if we don't know what's going on or what's coming we are concerned with what's what might happen. And if not handled correctly, not communicated, not forthright which, we'll talk about here in a second the tactical in about another minute, it's loss of trust. And from an organizational perspective, there's nothing worse.

I have a client that I work with that's going through some leadership changes and organizational changes, and frankly the organization mid-level manager and up have lost faith in their leader and it's really a problem. Because now everybody's questioning everything. Change wasn't handled correctly.

So what are the tactical things out of today in our final 10 minutes together? Let's talk a little bit about what you can do to more positively help others, help yourself. help the organization through change.

The first is the realization, particularly if you're an executive and they're bigger changes. The change really starts with the individual. While the plan usually is in terms of change for the organization, it's the people in the organization that are going to affect that change. Just having the ability to know that people might be concerned might not think this is a great thing, might realize that they are, they are compromised, possibly by something. Just realizing that possibility is a game changer. When I was at the University of Nebraska Medical Center we had a defined benefit program, meaning tension and like the rest of the world we began to have conversations at the senior executive level about moving to a 401k strongly matched retirement program, getting away from pensions. Now that's big change, but my boss and one of my two major mentors in my career, Glenn Fostick, to preaching to us. It's not the change in the financial retirement program we should worry about. It's the people who are making the change, and that led to just that realization, led these senior Executives to be more understanding of those who were going through the change, being more open to being involved with the conversations to better explain why this was important. I can't tell you how much I appreciated Glenn in those moments because just that concept, took care of 95 percent of the challenges. Be open to the people who are going through the change, not just the organization for its change.

Number two, demonstrate and show the problem or the anticipated problem. If we don't change, here's the issue, and let's go back to the retirement change from the pension to the 401K, and a very great matching program, is Glenn could show the numbers and the finance department so the numbers say eventually this becomes unmanageable and then everybody's going to lose. And while some people didn't like it, the openness and the honesty that came from that rationale was important. If you're going through a merger why is it important? What are we looking to gain out of it? If we're having Staffing and Leadership changes, here's what we're looking for and here's how we're doing it. There's all kinds of unbelievable concern out there that if you're open and honest and are able to articulate and show and anticipate the problem, and share that it doesn't seem so autocratic, it makes more logical sense.

Number three, the word autocratic, illicit feedback. Even if you're the CEO and you know we really need to make this adjustment, take 30 or 40 percent of the solution to a larger group, employees, stakeholders, whomever and ask for their input. It doesn't mean you have to accept all of it but part of the challenge with change is that people don't feel like they have a voice in the change. Now that doesn't mean that we're Democratic and going to take a vote whether we want to change something. Now in the government that works every two or four years, or whenever elections are, but inside a nonprofit company particularly, the larger it gets there are reasons people are paid to be CEO and that's to make decisions, but that doesn't mean you can't elicit feedback as a part of the process. Here's the problem. Here's why it's a problem. Let me clearly articulate it. Let me see. Tell me your thoughts. Do you at least agree we should do something? I'll give you the greatest example where buy-in really, that's what we're talking about in terms of general thoughts is going to bite us in the butt as a country, and that's Social Security Social Security, Medicaid, Medicare.

We've known for two decades that 2032, 2033, 2024 depends on, you know, the actuarials and numbers. That there's going to be reduction in ability to pay, losing 24 of payments. It'll go down to, they call it bankrupt. It's not really true. They'll have to just use the money that comes in. Everyone's going to take a haircut. Where we've not been able to get to is eliciting feedback and kind of a sense of we should do something here, and even worse the, government's not even autocratic about it. There's just ambivalent, which is going to lead as we've talked about to breakdowns, and budget issues, and loss of trust in government. Hey what do we know? And reputational damage. I don't believe in the government. Everyone can see what's coming. How do we get people to be involved?

Number four is trying to manage emotion. This goes back to the first thing about realizing it's about people. You can't have change and not have some emotional feedback. Some might view it positively. Many people view it negatively. So number one is creating safe spaces for feedback. There's nothing wrong with adjusting, implementation of change. Two or three degrees if it makes a whole lot of employees. And a lot of stakeholders, a lot happier, more comfortable, but doesn't change your end destination or slowing things down a little bit as long as doesn't affect the long-term goal. But you only get that if you have safe feedback, meaning people who can say I think we're missing something here, or I feel uncomfortable, or a number of people feel uncomfortable.

The second thing is is to show empathy. When I work with my kids, 10 and 6, I want as a parent try, and I'm not always good at it. My wife is brilliant in it, that's showing empathy. I understand your concern. You're, you know, going into new grade is tough but here's why you're going to be great at it. Just the ability to let someone know they're being heard, felt, understood is power for them. It builds trust for you. It doesn't mean you change what needs to be done. Sometimes people just want to be listened to. Show empathy.

Number five, maybe the most important terms of execution. Communication, communication, communication. More communication, more communication, and then communicate some more. You have to show them the plan and you have to show it to them over, and over, and over again. What steps we're at, what stage we're at, how it's going to happen, what's our destination. It's got to be done constantly. If we go back to the change in the pension, to the 401K program. Glenn had all of us as senior Executives, we were doing sessions with our employees and there were a ton of them, thousands, and thousands, and thousands of them. Doing sessions at midnight, at 10 pm, at 10 am, at 8 am, at 6 am. We were constantly 45 minute dog and pony shows about this program, and it was always the same presentation. We just kept saying it over and over. We all had different times. We would go and take the ownership of the conversation because he knew the more he communicated it before it got executed the more likely it was to be accepted. Define the future state of what it's going to be. Explain why change could be good if we do it correctly. If you show the plan, communicate it and define that future state. You will find that change is a lot easier to execute.

Number six is feedback and reinforcement. There should always be feedback loops, and I don't mean at the end of change. In every step, are we doing the right things? Did we get the results? Do we need it? Reinforce what the outcomes were, breaking these things out into parts. If you have feedback and you have reinforcement, you will have more acceptance of the change.

Number seven, and last, don't run from the hard. I've seen times where change needed to be executed and they did about 70 percent of it. But the most important, 30 percent, wasn't executed because it was just quote unquote too hard. Well then why'd you even try? The hardest things need to be done. First, I mentioned a few minutes ago a client who has removed the whole title, the whole job of Co. That meant a lot of hard conversations. The first thing they did is they had the individual conversations to say I know this may not be what you want to hear, but the job you are currently in, a CEO of the organization locally, doesn't exist anymore. Now I know there were other parts about well who's going to report to who, and who's responsible for this? Do I have more work? Do I have less work? All those things are hard but there was nothing more difficult than to sit down with a whole bunch of people and explain why they don't have a job anymore. You got to do the hard. It's got to be up front because if you don't you're not going to get the change you want, and then you've done all of this for nothing.

The tactical. Start with the human beings. Start with the individuals knowing what the goal of the organization is in the change. We start with the people who are going to execute the change. Realize people bring a lot of emotion into this.

Number two is show the problem. Demonstrate the problem. Anticipate the problem. And be honest and open about it.

Number three is illicit general thought. Don't be autocratic. Get people's opinions so you, they feel as if they are buying, and you might get something really great out of it in that feedback.

Number four is, manage emotion. Give people a split, a place, safe place so to speak for feedback. And show empathy that they're going through change.

Number five is communicate. Have a plan then communicate it again. Community, communicate it four more times. Then communicate it over again, and keep communicating it. Create feedback loops in the steps and create reinforcement in this, in the outcomes that you're looking for, not just at the end, but during.

And finally, don't run from the hard. Do the difficult things because they're going to get you the biggest change. Change is inevitable, period. The question is how we deal with it, and if you're a leader. These are things you can do that are going to help you get to the end result of the change, which is a better nonprofit, better service, community, better outcomes, better engagement. And that's a good reason for change if you have the right plan and can do these things to bring the rest of the team along.

Don't forget, check out the blogs at hallettphilanthropy.com - two a week, 90 second reads. Just give you something to think about, nonprofit world, leadership, things of that nature. If you'd like to reach out to me that's podcast@hallettphilanthropy.com. Change is making the nonprofit world challenging right now. Remember my all-time favorite saying, some people make things happen, some people watch things happen, then there are those who wondered what happened. We are people as leaders in the nonprofit world who make things happen. We do it for the people and the organizations who are wondering what happened. Change is a part of that, accepting that it's going to happen and finding the right way to work through it will give you more power about your nonprofit your career and the outcomes that your nonprofits trying to accomplish by embracing that change and continuing to be someone who makes things happen, even for those employees who are wondering what happened in the change. I'll look forward to seeing you right back here, no change at all, on the next edition of "Around with Randall" and don't forget making a great day.