Heifetz Halle Consulting Group


Tools to Help Manage Change

Suppose your organization is trying to re-engineer the material flow function or planning to move from traditional assembly line production to flexible manufacturing centers. You've been doing all the right things -- defined new roles and responsibilities, thrown in lots of training dollars (both classroom and OJT), redesigned layouts, processes, and interfaces -- yet, something's not working. The initial enthusiasm and cautious optimism has been replaced by skepticism and cynicism. Productivity and throughput are dropping; upper management is pressing for answers... Most of us have been there in one form or another.

With so many change efforts falling far short of expectations, unraveling over time, or just stalling out, we've all asked: "Why?" What could we have done differently? What are we missing? What makes some change efforts succeed, while others fail? Isn't there some practical formula that would help us shift the odds?

The Change Formula

We have found that the Change Formula can provide the missing perspective that too often blindsides an important change effort. It is one of the best tools for managing change. In the April 1992 issue of APICS, Stan Halle and co-author, Susan Frank described the Change Formula in the context of Paradigm Shifts. Let's go a step further and apply it to change efforts in general.

The Change Formula is a powerful tool which can help you plan change efforts in your company. The Change Formula identifies several key factors which must be present in sufficient degree to initiate and sustain a change effort. It is an invaluable planning tool because it allows you to develop a broad grasp of what it will take to implement a change, and tells you just where you must bolster your efforts to succeed. It's also a diagnostic tool that can help you quickly assess what's missing or what's going wrong. Once understood, you can take the necessary steps to get your change effort back on track.

The Change Formula has been stated in a variety of ways by several writers on change. One of these writers, Michael Beer, in "Organizational Change and Development" expressed it as follows:

"The difficulty of creating readiness for change, may be thought of in terms of the cost of changing to organizational members. Change will occur only when these costs are outweighed by a number of factors which can create positive motivation to change. This relationship between positive forces which support change, and the cost of change, may be expressed in the following change formula.

Ch = D x M x P > C


  • Ch = Change
  • D = Dissatisfaction with the status quo
  • M = A new model for managing or organizing
  • P = A planned process for managing change
  • C = Cost of change to individuals and groups "

In practice, we've found that the Change Formula must be interpreted to suit the situation. We have seen that people can often relate to this formula better if we use slightly revised terminology, and some explanation to go along with the formula itself. For many purposes, substituting the concept of a Vision (V) for Model (M) is more understandable and approachable. A vision, after all, is one sort of model used to describe in detail what we would like things to be like in the future. A vision can be thought of as a target to shoot for, or as an extended wide-angle "photograph" of what the organization would look like in its new state.

It is also helpful to explain the terminology, without much loss of practical meaning, as follows:

The "What"
The "How To"
The "Why"
The "Why Not"
A Target
- Better than the way things are now
- Valued by many people
- What does success look like?
- Clear/can be visualized/detailed
Instrumental Capability
- Tools
- Know-how
- Skills
- Authority
- Resources
- Strategic
- Action
- Leadership
- Perserverance
- Focus
- Powerful reason to change
- Positive: an opportunity just out of reach
- Negative: change or go out of business
Current or old paradigms
- We've always done it this way
- You can't fight the system
- "Not invented here" syndrome
- Improving means fewer jobs
Resistance of all sorts

Let's look a little more closely at each of these key factors for change. We'll consider the three factors most under your control (Vision, Process, and Discomfort) -- each one's contribution, what happens when one is missing, and application suggestions. Last we'll look at the "Cost" factor.

The "Why" (Discomfort)

First of all, there is the motivational factor: dissatisfaction, discomfort, or simply pain. It is our experience that the level of discomfort needed to support significant change efforts must be quite high. Organizations simply do not take on major changes unless there is a very strongly felt reason to do so. It may be a competitive threat, new government regulations, a precipitous drop in sales, or any number of painful and inescapable issues. Usually, but not always, the motivation for change will be some sort of external negative threat to the organization. Unless dramatic action is taken, the organization will be in jeopardy.

One thing to watch for is a situation where only a few people are feeling the pain. The change will be difficult to implement unless the people who actually have to make the change feel the discomfort strongly. It may be necessary to "raise the level of discomfort" before people choose to support the change. This is especially true when only a few really understand the threat to the organization, or when the issue is so painful that few have looked at it realistically. It may also be necessary to explain the harsh business realities to many people before they see the need for change.

If the "D" (Discomfort) is missing or insufficient in your organization, it doesn't matter how excellent your Vision or your Process planning is. Some organizations really apply themselves to developing a solid Vision, all the requisite plans, and obtaining the necessary new equipment and training to get the job done. Yet, unless there is sufficient motivating force, management will soon discover that the best laid plans end up gathering dust on someone's shelf. An organization needs compelling reasons why 'retaining the status quo' will not suffice.

The "What" (Vision)

Now we're ready to look at "V" (What) of the Change Formula. Along with a sufficient level of discomfort, your change effort will need a vision to move toward. This vision of how you would like the organization to be in the future can provide a clear sense of direction, as well as a positive motive for change. If the vision represents something that people really would like to be a part of, they will want to make it happen. The contrast between the way things are now, and the way they could be after the change is in place, can generate enthusiasm to replace fear and dissatisfaction. Instead of focusing on the discomfort that stimulated the change effort, people can begin to focus on creating a better place to work. But without this clear sense of organizational direction and an attractive future to begin working toward, your change effort will be greatly hampered. If people do not know where they are going, their confusion will become another resistive force that must be dealt with.

Furthermore, organizations that lack a sufficiently clear and compelling vision often find that managers and their work units will 'fill in the blanks' with their own notion of what to strive for. If this happens, you'll probably have differing understandings of your goals and aspirations that clash or compete destructively, wasting precious resources, time and energy. Organization alignment to a common purpose and vision is a very powerful force. Misalignment is a surefire way to fail.

The up front investment of time and effort in developing and articulating an organization vision will pay off handsomely later. As managers and other employees are able to see themselves in the future state described in the vision, their level of ownership and commitment to making the change happen increases. But in order to build this higher level of commitment, people must work with the ideas contained in the company wide vision. They must apply it to their own job or work unit. This can be done in several ways, for example, having each work unit create 'A Day in the Life' description for their area. Or asking each manager to answer: 'What will we do differently to make this vision a reality?'

The "How To" (Process)

A well thought out process for implementation is the third factor you must have in place to make a change happen. There are some excellent planning tools available. The Change Cycle introduced in my book "Leading Change, Overcoming Chaos" is a valuable tool that provides a stage by stage road map through the change process.

Tools certainly can help, but tools are not enough. Any significant change in an organization means that people will have different responsibilities, requiring new skill sets. Changes will inevitably require training. But the adjustment process for people goes beyond skills training. It must include a rather significant reorientation to their jobs, and perhaps a whole new way of thinking about their industry, company and career. This kind of shift in outlook takes time and a great deal of discussion and private processing before a change is fully understood and accepted. This is a necessary step in building commitment to the change. Process planning for change is thus complex and challenging. It cannot be taken lightly.

Managers often underestimate what it will take to bring the organization from it's Current State to the desired Future State. It is common to misjudge the amount of time, money, effort, communication and planning needed. Similarly, we tend to underestimate significant barriers, and the tools and capability needed to do the job. If you do not pay enough attention to the required capabilities, you can end up in a 'can't get there from here' situation.

One way to make the most of past experience is to do a review of previous change efforts, both successful and not. This step can help to pinpoint what worked, what didn't, and why. It can also help clarify just what it will take to accomplish any change within your organization. Applying these lessons learned to the current change effort can greatly improve the probability of success. This is one idea for leveraging the organization's current capability.

The "Why Not" (Cost or Resistance)

The last of the factors used in the Change formula is the Cost of the change. It is the least manageable of the four factors in the Change Formula. It is useful to expand our definition of this factor to include all forms of resistance to change, not just the cost of changing to individuals in the organization. This fourth factor then becomes a more generic resistive force which must be overcome to initiate and sustain a change process. This resistive force that can take many forms. Some of the resistance is quite predictable. Entrenched beliefs, patterns of thinking and behaving are always difficult to change. There are also many people who will strongly resist any change, regardless of how needed or attractive it may be. There will always be inertia to overcome, especially at the beginning of a change process. But there are also many unexpected sources of resistance which can impact a change effort. Some of these resistive factors go well beyond the cost of the change to the people who have to make the change. Shifts in the marketplace, difficulties in commercializing new technology, dips in sales, unexpected competitive activity, new government regulations, internal politics or shifting priorities can have a dramatic effect on your change process.

Final Thought

In order to meet all the expected and unexpected challenges, try to manage all of the factors of the Change Formula that you can. The resistance to change is always powerful, so the forces driving the change must be even more powerful. Your challenge is to muster all of the will and capability of the organization (in the form of Vision, Process, and Discomfort) needed to sustain the effort and deal with the Cost of change or any other resistive forces you encounter. It is certainly a real challenge, but a highly rewarding one if your Vision is truly worth achieving.


Michael Beer, Organization Change and Development (Santa Monica: Goodyear, 1980, pg.46), in which Beer further notes "A version of this formula originated with Dr. Alan Burnes, a former associate of mine at Corning Glass Works. I recently discovered a similar formula in Beckhard and Harris (1977), who attribute it to David Glechler." First printed in APICS the Performance Advantage in February 1994

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