Why people don’t change—even for a million dollars!

The average organization is losing an amount equal to $1 million dollars each year that better leadership practices could prevent according to recent white paper from The Ken Blanchard Companies.   So why isn’t there a greater sense of urgency to change things?  Of course, it’s different in different organizations, but here is one of the most overlooked reasons why organizational practices don’t change—even when there is evidence that it could have a strong financial benefit.

Sometimes knowing can seem like doing.

According to authors Jeffrey Pfeffer and Bob Sutton, organizational inaction can often be traced to a basic human propensity: the willingness to let talk substitute for action.  In their classic Harvard Business Review article, The Smart-Talk Trap authors Pfeffer and Sutton explain that in business, “When confronted with a problem, people act as if discussing it, formulating decisions, and hashing out plans for action are the same as actually fixing it.”

But the results can be disastrous for a company.  As Pfeffer and Sutton point out, “Brought to a standstill by inertia, their problems fester, their opportunities for growth are lost, and their best employees become frustrated and leave. If the inactivity continues, customers and investors react accordingly and take their money elsewhere.”

So how do companies get past this inertia?  In studying companies with a strong propensity for action, Pfeffer and Sutton have found five common characteristics:

  • “They have leaders who know and do the work.”  Leaders in these organizations have either grown-up in the business or spend a good portion of their time managing by wandering around.
  • “They have a bias for plain language and simple concepts.” Leaders focus their efforts on a few, straightforward concepts.  They consider “common sense” a compliment rather than an insult.
  • “They frame the questions by asking ‘how’, not just ‘why’.” Leaders look for ways to get things done instead of looking for ammunition for assigning fault.
  • “They have strong mechanisms for closing the loop.” Leaders make sure ideas turn into action.
  • “They believe that experience is the best teacher ever.” Prototyping, testing, and feedback is encouraged.  People are expected to take risks, occasionally make mistakes, and keep learning.

How would you score your organization in these five areas?  Is your corporate culture more “talking” or “doing” by nature?  If it seems a little conversation-heavy, develop an attitude of action.  Understanding, planning, and deciding are just the first step.  Doing is what counts.  Take action today!

Ready to get started?  Join us for a webinar this Wednesday!

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The High Cost of Poor Leadership: The three performance gaps you have to address Wednesday, December 7, 2011, 9:00 a.m. Pacific, 12:00 p.m. Eastern, 5:00 p.m. UK and GMT

Poor leadership practices cost companies millions of dollars each year by negatively impacting employee retention, customer satisfaction, and overall employee productivity. In this Webinar, Blanchard Program Director David Witt helps you take a closer look at the effect that leadership has in each of these three areas and what you can do to improve performance.

You’ll learn that

  • Less-than-optimal leadership practices cost the typical organization an amount equal to as much as 7% of their total annual sales
  • At least 9% and possibly as much as 32% of an organization’s voluntary turnover can be avoided through better leadership skills
  • Better leadership can generate a 3 to 4% improvement in customer satisfaction scores and a corresponding 1.5% increase in revenue growth
  • Most organizations are operating with a 5 to 10% productivity drag that better leadership practices could eliminate

Drawing on proprietary original research, you’ll learn which management techniques generate the best results and also look at some of the common cultural roadblocks that keep companies from implementing them. You’ll also learn how to overcome these obstacles and make the shift from knowing to doing.

Organizations need to make sure that they are getting the best out of their people by providing strong, consistent, and inspiring leadership. Don’t miss this opportunity to learn how to evaluate and improve leadership practices throughout your organization.

Register today! http://www.webex.com/webinars/The-High-Cost-of-Poor-Leadership-The-three-performance-gaps-you-have-to-address

10 thoughts on “Why people don’t change—even for a million dollars!

  1. Hi Everyone, Randy and I are here. It was great having a chance to talk with you. If you have questions that I can answer, please use the comments feature. Press F5 to refresh the screen and see the latest comments.

  2. Great session today, Dave. Here’s a question that we weren’t able to address during the webinar:

    How are we defining “productivity” when we say that senior leaders are reporting that their people are operating at a 60%-65% level of their potential?

    • This is really a self-described term with people assessing their current contribution to the organization to what it potentially could be. I would have to go back and take a look at ProudFoot’s definition to see exactly how they defined it.

    • My best advice is to share some of the white papers we have written on the topic with a note describing how you found the ideas interesting and thought-provoking and would like to get their opinion on the concepts addressed. You could also point them to the presentation recording once it is posted.

  3. Dave – another question from the webinar that we weren’t able to get to during the session:

    “This sounds great Dave, but it seems like a lot more work for managers (re: the performance management practices discussed). How can working managers fit this into an already hectic schedule?”

    • It does require extra work and I think that priorities would have to be reset in the organization. Hopefully, the benefits of proactive management and the financial implications would trigger this type of conversation.

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