Business Psychology - Latest Findings

Article No. 232
Supervision Findings, by James Larsen, Ph.D.

Helping People Embrace Change

Research discovers ways leaders can help employees make change.

There's a clothing retailer in my home town that made a bad mistake two years ago. It was a family firm founded one hundred years earlier which was patronized by a committed core of customers. The owner decided to open another store. He chose a suburban location, and he committed monies to the new store he couldn't afford to lose. The new customers didn't show up. It took two years of losses, but he lost both stores, and his employees lost their jobs.

Some of these employees had spent their entire adult lives in this business. I visited during their liquidation sale, and the pain was evident in their faces.

When management experts cite employee resistance to change, this is what they are talking about. This is the reason for the resistance. Employees know instinctively that bad mistakes their managers and owners make will translate into bad outcomes for them. So they are afraid. And they resist change. Unfortunately, change does not respect employee fears.

Customer preferences change. Buildings age. People move to new homes, and they get older. Incomes rise and fall. Children grow up. Change will not hold still.

Bradley Agle, a researcher at the University of Pittsburgh, is interested in these topics. Recently, he completed a study which sought to discover characteristics of leaders who were effective in helping their employees and their companies respond to change. He used the term "inertia" to refer to resistance to change, and he described three types that he felt were most important.

The first was thinking inertia. Employees must generate nearly all the new ideas that growing businesses depend upon to grow and expand, but defensive thinking that seeks to protect existing patterns defeats this process. Employees who are afraid do not relax their thinking to allow new ideas to emerge.

A second, closely related kind of inertia Agle described is territorial inertia. Everyone in a business has territory that they feel is their own: a skill that others need, command of a technical body of knowledge that others lack, relationships with customers or providers that are hard to duplicate. Even the custodian knows which keys fit all the doors. Change threatens to disrupt territories by making some important and others less important or obsolete.

Finally, Agle described obligation inertia. Firms make obligations to employees and to all their publics that can work against them when they need to change.

Professor Agle's research included 250 companies and their executives in a wide variety of industries. He examined leadership styles and characteristics and their effects on employees and on the performance of their companies. He was especially interested in contrasting five popular leadership roles that are frequently urged on executives. The five roles are 1) driver, 2) conditional provider, 3) personal risk taker, 4) dynamic visionary, and 5) virtuous role model.

Agle found that the last two of these roles were the most important, the dynamic visionary and the virtuous role model. Executives demonstrating these characteristics led the most successful companies with employees that made the most useful contributions.

Professor Agle explained why these were best.

Visionary leaders who vividly describe a different company emerging from present circumstances relax thinking inertia. Their descriptions of new ways of doing things stimulate an explosion of sympathetic ideas from employees who carry ideas forward to the frontiers of new discoveries.

These leaders' stability as virtuous role models inspires trust, and their loyalty to employees gives people confidence that new, relaxed thinking patterns won't cause a calamity. These leaders give responsibility to people while reassuring them with their confidence and challenging them with their expectations. Employees and other stakeholders listen to these leaders' stories of future prosperity and become excited about contributing to the birth of new possibilities. They relax their protective rigidity and look forward to the future.

Leadership does make a difference. Leaders have an obligation to do their homework before committing their businesses and their employees to a course of action. This research reveals ways managers and owners can help their employees become part of the process of implementing change.

Reference: Agle, Bradley R., and Jeffrey A Sonnenfeld (1994). Charismatic Chief Executives Officers: Are They More Effective? An Empirical Test of Charismatic Leadershipo Theory. Best Papers Proceedings of the Academy of Management, fifty-fourth annual meeting of the Academy of Management, Dallas, TX, August 14-17, 1994, pp. 2-6.

© Management Resources

Back to home page