The Psychology of Driving Organizational Change: An Interview with Author, Founder, and Change Management Guru Lior Arussy

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Lior Arussy’s just-published Next is Now: 5 Steps for Embracing Change may be the best book ever written about change management. Arussy explores the deep psychological obstacles that individuals and organizations face as they seek to embrace change initiatives. More importantly, Arussy offers 5 practical, actionable steps that individuals and organizations can take to effectively embrace change.

As the founder of Strativity Group, Arussy has helped Fortune 500 organizations like Mercedes-Benz, HSBC, and many more effectively bring about organizational transformation. The NCMM caught up with Arussy recently to chat about how middle market companies might more effectively drive change.

Q: How are organizations generally doing in terms of embracing change?

Arussy: Not well. We did a study with Harvard Business Review and benchmarked 422 companies, asking executives about their success driving change. The study uncovered a dismal success rate of nine percent (9%). Only nine percent of companies said the change initiatives they were planning had actually materialized. If we substitute the word “change” with the word “strategy,” we’ll start to understand the magnitude of the challenge: change is really about implementing new strategies. It's about whatever you need to move towards in order to survive in the marketplace. What does a nine percent success rate for change say about our ability to thrive in the future?

Q: So what are the main obstacles hindering organizational change initiatives?

Arussy: In our research, we were surprised to see that executives placed time, budget, and governance models at the bottom of the “obstacles” list. When you look at the top four or five obstacles to change, all were human-related factors. People in the organization didn't understand the “why.” Senior leadership didn’t communicate effectively. Senior leadership was not aligned behind the change. That’s why this book is so different, because it emphasizes the human factors, the psychology, that are at the center of the struggle to change. Budgets and technologies aren’t the main challenges, people are.

Q: What keeps people and organizations from accepting change when everyone knows it’s necessary?

Arussy: The mega-issue is misunderstanding the obstacles to change. What do I mean by that? The thinking in traditional change management has been that people are not moving forward because they are concerned about the future, about being embarrassed, about doing things they've never done before. The whole change management industry focuses on what I call a “future-based fear,” while our discovery was that the real fear was actually “past-based fear.”

When people hear the word change, what they hear is a negative judgment about their past performance. Their first struggle is “where do I file away the last 10 years of my life because you just declared that the last 10 years were a mistake, so what am I supposed to do with my past?” Because if I was the cashier at the bank and now there's no bank, who am I? The issue is addressing the past-based fear and identity-based fear before people can even begin to move forward.

Q: So what are the 5 steps for embracing change that you explore in the book?

Step one in embracing change is all about facing the truth as it is. Do not try to apply lenses that will skew the truth to your version or try to avoid the truth. That is eye-opening for people, seeing how much they will actually misrepresent the truth in order to justify them not changing. That's the rational side. The next side is the emotional side, and this is especially difficult for large businesses and mid-size businesses to accept -- there are strong emotions here. Leaders sometimes think, “it's business. not personal.” Well, facing change is personal and emotional.

Step two, “analyze it,” allows you to understand where you are stuck emotionally. I'm talking about different personalities of change rejection and allowing people to reflect, so they can start developing methods to approach the change. Step number three is redefining. This is where we're helping people bridge the past and the future. You've got to help people see consistency between the past and the future in order to be willing to experiment with new things. They need to know their core cause to see the continuity amidst change.

Q: How might understanding their “core cause” help a middle market company drive change?

Arussy: Your core cause is basically your mission of impacting other people. And it’s not about making money, but about the impact you make on others. The moment you understand how you impact people, the moment you understand the power that you have, you see your role from an impact creator's standpoint. That impact doesn't change even if the tools you wield change. When you separate the core cause from the tools, you actually build more flexibility to change the tools and allow yourself to adapt accordingly. It's about allowing your people to see that they are staying true to themselves and the change that's being required is really just a change of tools and processes, not a change of identity.

Q: What’s the fourth step for embracing change?

Arussy: Step number four is about growing with change. We understand change rationally, but if we don't apply it to the details, we’ll simply default to old behaviors. Take something outside of business, such as diabetes, one of our biggest health epidemics. If you don't help people apply a new diet and exercise to their lifestyle and just leave them to their own devices, they’ll still understand rationally the need for change, that there is a silent disease within them, but they won't necessarily see the application to the details of their behavior. They need to understand and then follow up in the details.

Allow people to try new things without the fear of embarrassment, allow them to actually quantify the change. The moment you start quantifying the change to your daily routine and monthly routine and weekly routine, you recognize that it’s actually doable, and you gain momentum.

Q: What’s the fifth, final step?

Arussy: Stage number five is about owning change, developing and flexing your muscles of change. It’s a muscle that needs regular exercise. Bring change into your life early on and in small quantities, so you can be ready for the next change. Go to Ted talks and listen to something that is not in your area, but explore the possibilities. Listen to new music, meet new people.

Q: What else would you like to tell middle market leaders about “Next is Now” and embracing change?

Arussy: When you are mid-size company, you might think the big guys have it easier. There are two Japanese concepts of war, sumo and judo. Sumo is all about size. Judo is about agility. It's very easy to look at the sumo wrestler and say, “It's so easy. He just needs to move and then he can’t be stopped.” Well, sumo wrestlers take forever to move! So my message to mid-size companies is leverage your strengths. What you believe to be your weakness is actually your strength. Your ability to change is greater, and the number of people that you need to convince, engage, and activate is much smaller than those massive enterprises.

A CEO with 10,000 employees spread all over the globe is going to be struggling to get any traction. You can actually move much faster. Stop looking at the other guys. Find out why your customers are buying from you and not from the other guys. Leverage that, build your core cause, and you can accelerate change much faster than the big guys.