Don't Underestimate the Negative Impact of Change

Credit Union Magazine
May 4, 2009 | COMMENTS

The old maxim, "change is the only constant," has been all too true for credit unions over the past decade. Mergers, technological advances, the sales culture implementations, and the ongoing struggle to stay competitive in a highly dynamic financial services market all have contributed to feelings that change is critical to survival.

But Eric Abrahamson, a professor of management at Columbia Business School in New York and an internationally recognized expert on change management, cautions many institutions have gone too far.

"Some companies are ‘change-aholics,' " he says. "They undertake too many changes at once, and while it might appear change was positive from a bottom-line perspective, there's a devastating net effect on human resources."

Pacing is critical. "A period of rapid change should be followed by one of relative stability as you allow employees to learn how to create routines in the new environment," says Abrahamson. "You have to remember employees are handling both their routine work and their change work—and if there's too much at one time, it can lead to burnout."

While many companies embrace change via creative destruction—basically starting over from scratch—Abrahamson typically advocates for change by recombination. "Look for the best existing elements of your firm and find new ways to use them," he says. "It's much less destructive and time consuming and less likely to lead to employee burnout. It's not always possible to do this effectively, but it should be your starting point."

Companies that make a habit of change are likely to face cynicism from employees when the next new thing is announced.

"Some firms have the perception their capacity to change is quasi-infinite, but that's just not true. Constant change is exhausting and counterproductive," says Abrahamson. "It hurts employees. It hurts their families and their health. Often, people resist change not because they're not accustomed to it but because there's been way too much of it."

When weighing decisions about change, he advises considering the "mountain climber" metaphor: Always keep three limbs stable while moving the fourth.

"One of the great tricks for managers is not to just manage change but to learn how to manage stability in a rapidly changing world," he says. "Anyone can spend all their time changing—to a certain extent, that's actually easy. But keeping things stable is the harder role."

This story first appeared at www.creditunionmagazine.com and is reprinted with permission.