By Carol Kinsey Goman, Ph.D.

Dr. Goman is president of Kinsey Consulting Sen/ices, Berkeley, CA, specializing in developing "change-adept" organizations and individuals.

From working with executives and managers, I've seen how management of change impacts a work force. Here are the biggest mistakes in managing change -- and the lessons learned.

Mistake #1

Not understanding the importance of people. 60-75 percent of all restructuring failed -- not because of strategy, but because of the "human dimension.

Lesson learned: Organizations don't change. People do -- or they don't. If staff don't trust leadership, don't share the organization's vision, don't buy into the reason for change_; and aren't included in the planning -- there will be no successful change -- regardless of how brilliant the strategy

Mistake #2

Not appreciating that people throughout the organization have different reactions to change.

Lesson learned: Some people are naturally more "change-adept." We need to spot and encourage the early adaptors. Change-adept people are naturally happier in their work because they have come to terms with a world that never stays the same. They move with today's chaotic workplace, rather than fighting it. They are energized by, and actually thrive on, change. Change-adept professionals build greater resilience and not only survive, but flourish in changing times. There are five factors that determine which individuals deal successfully with change.

1. Confidence. Confident people are self-motivated, have high self-esteem and are willing to take risks. Quite simply, they know how good they are.

2. Challenge. With any change, the danger of possible reversals coexists with incredible opportunities for personal and professional success. When change-adept people are asked for verbal images they associate with change, they acknowledge the stress, uncertainty, pressure, and disruption, but they also emphasize the benefits – the opportunity, growth, adventure, excitement and challenge.

3 .Coping. Some people are naturally more flexible and better at coping wth. and adapting to, a complex, fast-paced reality than others. These individuals take charge of change by accepting responsibility and assuming control. To be successful in chaotic times, the trick is not to brace yourself for change, but to loosen up and learn how to roll with it. In your organization, strategies will be planned, announced, implemented, and then- right in the middle of execution - they will all too often have to be altered or aborted because of external changes. What leaders need from employees is the ability to commit to a course of action and, at the same time, to stay flexible enough to quickly alter behavior and attitude.

4 .Counterbalance. Those who are most resilient not only have a job - they have a life. Change-adept individuals compensate for the demands and pressures of business by developing counterbalancing activities in other areas of their lives. They cultivate interests outside of business - sports, hobbies, art, music, etc. - which are personally fulfilling, and they have sources of emotional support. Because employees with counterbalance have a life that includes both work and recreation, they handle stress better and are more effective on the job.

5. Creativity. Change-adept professionals are curious, creative and innovative. You can easily spot creative people in organizations. They are the employees who are constantly seeking ways to improve products, services, or themselves. Typically they contribute ideas beyond the limits of their job descriptions and value any business experience that exposes them to new knowledge and skills.

Mistake #3

Treating transformation as an event, rather than a mental, physical and emotional process.

We disregarded the wrenching emotional process of large-scale change or underestimated its depth.

Lesson learned: Large-scale organizational change usually triggers emotional reactions - denial, negativity, choice, tentative acceptance, commitment. Leadership can either facilitate this emotional process or ignore it - at the peril of the transformation effort.

Mistake #4

Presenting change with a too positive "spin."

And the more we "sugar-coated" the truth, the wider the trust gap grew between management and the work force.

Lesson learned: Communicate openly and honestly. Not everyone will thank you for your candor, but they will never forgive you for hiding the negative side. You need a proactive, sharing of everything — the opportunities, the risks, the mistakes, the potentials, the failures -and then inviting people in to work on these challenges together.

Mistake #5

Not appropriately "setting the stage" for change. All too often, change was announced in an environmental vacuum, with little reason or rationale for what the organization was trying to accomplish and how this change fits into the corporate vision.

Lesson learned: To prepare employees for success, we must give them pertinent information about demographic, global, economic, technological, competitive, and industry trends. People need to know the vision, goals, and strategy of the company. They need to understand the financial reality of the business and how their actions impact that reality.

Mistake #6

Trying to manage transformation with the same strategies used for incremental change.

Lesson learned: Incremental change -- continuous improvement, etc. - is linear, predictable, logical, and based on a progressive acceleration of past performance. Transformation is none of these things. Transformation is a redefinition of who we are and what we do. It's often unpredictable (responding to unforeseen circumstance, challenges and opportunities), illogical (demanding people and organizations change when they are the most successful), and most importantly, in a transformative change, our past success is not a valid indicator of future success. In fact, our past success may be our greatest obstacle.

Mistake #7

Forgetting to negotiate the new "compact" between employers and employees. The result was that people knew what they were losing, but didn't have a clear picture of what to expect in its place.

Lesson learned: A new kind of relationship, grounded in mutual trust and respect, is emerging between employers and employees. It attempts to align the interests of the organization with those of its employees, to share both the risks and rewards of doing business. The developing relationship between company and worker is changing from paternalism to partnership. Increasingly, it is a matter of finding items that are of value to both the employer and the employee.

Mistake #8

Believing that change-communication was what employees heard or read from corporate headquarters. So we focused our attention on speeches, newsletters, videos, and email - only to find out that, from an employee's perspective, the*kind of communication that impacts behavior is 10 percent "traditional" vehicles, 45 percent organizational structure (whatever punishes or rewards) and 45 percent management behavior.

Lesson learned: A communication strategy that is not congruent with organizational systems and the actions of leadership is useless. Organizations send two concurrent sets of messages about change. One set of messages goes through formal channels of communications -- speeches, newsletters, corporate videos, values statements, and so forth. The other set of messages is "delivered" informally through a combination of "off the record" remarks and daily activities.

Mistake #9

Underestimating human potential. And when we underestimated potential, we wasted it. This was our worst mistake.

Lesson learned: Trust in the innate intelligence, capability, and creativity of your employees -- and people will astound you. In the Industrial Age, companies squandered immense amounts of human potential on mindless, repetitive tasks and meaningless paper work. It never occurred to leaders in those days that their assembly-line workers had the know-how to rebuild entire car engines, that their "lowly cashiers" easily negotiated complicated bank loans for their families, or were perfectly capable of organizing charity campaigns or running complex volunteer organizations in their spare time. Today, in the post-industrial Information Age no company can afford to waste human capital so rashly. Every talent, every idea, every skill is needed urgently if companies are to survive. The potential of the work force really is the company's greatest asset.