Organizations are changing more rapidly today than ever before.  Mergers, acquisitions, outsourcing, downsizing, restructuring and other strategic initiatives are being employed to improve financial results and increase shareholder value.  Yet research shows that more than 70 percent of these strategic changes fail to fully achieve their financial objectives. 
 
For example, a review of the financial performance of companies following critical strategic change showed that:

• Only 21 percent of downsized companies reported satisfactory financial improvements on shareholders' return on investment
• 83 percent of mergers failed to produce any benefits for shareholders

The vast majority of these initiatives fail because of workforce performance issues associated with the strategic changes.  Motivational issues, skill gaps, inconsistency of procedures all contribute to the failure.  But, according to Dr. Seth Leibler, CEO of The Center for Effective Performance, there is good news in this seemingly dismal picture.  “The underlying cause for the underperformance of planned strategic change in organizations is workforce performance problems that can, in fact, be fixed or even prevented.”
 
When organizations change rapidly, the nature of jobs within these organizations change rapidly as well.   Requirements change for what employees are expected to do and how well they are expected to do it.  Yet rarely are these changes clearly communicated to employees.   Says Dr. Leibler, “Executives oftentimes overlook those who are affected by these changes – the employees – who are also ultimately responsible for driving results in the organization.  As jobs change, new processes are introduced, and higher level, more complex skills are required.”  These skills can be identified and acquired through results-based training that guarantees performance.
 
Other factors associated with the change may also present barriers to performance.  “Often, it is as simple and inexpensive as making the new expectations explicit,” says Dr. Leibler.  “With all the chaos and confusion surrounding the new organization, people are just unsure of what exactly they are supposed to be doing.”
 
Typically, motivational issues also arise that must be addressed.  “Executives need to think about rewards for those who perform and those who do not,” adds Leibler.  “It’s easy to ignore these motivational issues, but they will come back to bite you.”
 
Dr. Leibler suggests the following actions for executives who want to reduce the risk of their strategic initiatives:
 
-- Be certain the procedures and systems of the new organization are integrated and support strategic initiatives.
--Ensure that managers have the required skills and knowledge to implement and manage the change process.
-- Determine if current employee workloads allow the time to take on additional volume, or expanded roles and responsibilities.
-- Assess whether employees will perceive functional or job-specific changes caused by the strategic change as positive.
--Ensure that affected employees have the skills and knowledge needed to execute the new processes.
--Be sure the organization has captured vital information from employees who might leave as a result of the change.
--Be sure the organization has the correct metrics and systems in place to evaluate job performance of critical employees or functional areas.
 
“By addressing all the factors that affect performance – skills, environment, and motivation, executives will be positioned to defy the odds, and profit from these initiatives,” concludes Leibler.
 
Assess whether your organization is at risk with the CEP RiskRater survey.  Go to www.cepworldwide.com/riskrater/setup.exe.
 
The workforce performance experts at CEP can help your organization identify and solve workforce performance problems.  For more information, go to www.cepworkforceperformance.com.