The Leader Magazine

DEC 2017

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Taking intelligent risks – and leading change that works! by Paul Thurman M achiavelli once said that if you desire constant success, you must change your conduct with the times. We all want constant success, don't we? Then why is change so hard if it is a requirement for success? Because change often involves taking risks – "sticking our necks out" – and this is not natural! In corporate real estate (CRE), where we place big bets (of capital, staffing, infrastructure, and space) over long-term horizons, taking such risks is a way of life … and an essential part of long-term corporate strategic planning. It's no wonder why CRE leaders and managers are some of the best risk-takers in business. So, what can we learn from risk-taking … so that we can get even better at it? How can we explore ways to take a bit more risk – in thoughtful, purposeful ways – to make the changes necessary for our future success? And if we can learn how to take more risks – and try more new things – how can we model this behavior and support it with our teams, business partners, and senior leadership? To start, let's explore why change is so hard … and it is hard! A few years ago, McKinsey and Company, the global management consultancy, tried to get a handle on why change is hard – hard to do, hard to manage, hard to convince others to do, and hard to create as part of a larger (and more valuable) corporate cultural asset. What they uncovered was quite interesting. As Figure 1 shows, change is relatively "easy" if we only have to worry about ourselves. But when others are involved – and other assets, relationships, and so forth are at stake – change is certainly more difficult. Thus, taking risks – and changing the ways we do things – is often challenging because change involves our thinking and our teams (and relationships), and failure often has dire consequences. So, one question naturally comes up at this point: "If change is largely a 'thinking' or 'adaptation' exercise, why do we have so much trouble with it?" A change model that helps here is the so-called Kübler-Ross change framework. As shown in Figure 2, no matter what the change – from a positive one, like having a new baby, to a negative one, such as realizing your project needs different resources to be successful – we all go through seven different state-changes or phases as we process and learn to "live" change. Note the two axes – morale and competence (to handle the change) on the vertical, and time (to fully adopt/start to "live" the change) on the horizontal. When a change occurs – we'll stick with the example of having a new baby – we are shocked at first. "What, you're/I'm pregnant?!" Even planned change shocks folks once it really starts to happen! But then, we tend to go into the denial phase. "I can't be having a baby – I just got promoted and am focusing on my career!" This denial often leads to frustration as you start to see that this change really is going to happen. As such, we drop into the "valley of despair" or into the depression stage. Our life is over/will never be the same. Our mood is low … and our energy – to get the baby's room set up, etc. – just isn't that high. But eventually, we start to experiment with the "new normal" – how I will still work with a baby? etc., and we slowly start to "engage" with the new world that is coming. We aren't completely convinced that the change is permanent, but we're willing to "test drive" the thought of it a bit! Finally, in the latter stages of change, we finally do get "over the hump" and decide that we really f igure 1: Why is change so hard? • It's not just about the outcome. It's also about the process and relationships! • Changing a process is easy. Changing thinking is hard. • Changing a process yourself is easy. Letting your staff do it is hard. • Changing compensation schemes can be incredibly painful. • Non-conformists almost always (eventually) get fired or removed from the mainstream. • Not everyone is "trainable" in new methods, skills, or approaches. • Even if we can take risks, will everyone admire us and follow our examples as role models? Source: McKinsey f igure 2 F E A T U R E A R T I C L E 32 DECEMBER 2017 th E l E a DER

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