Doug Baird looks at the importance of the newly formed government’s approach to change management and what businesses and HR leaders can learn from.
Forget any debate about trickle-down economics or the humiliation facing the new prime minister and chancellor, the government’s decision to U-turn on such a prominent and controversial issue shows how U-turns can undermine the credibility of leadership and all the decisions that they’ve made – even if they are of value!
Government U-turns are nothing new, and the most recent one around the 45pence rate of income tax is unlikely to be the last. What is alarming is that this reversal has been made so quickly after the original decision, and during such a short tenure of new leadership. This is far from a positive sign about the government’s ability to manage change.
In the same way, the markets and public need certainty and the ability to confidently trust Government to make clear decisions, so too do employees need the same of their leaders.
More often than not, senior changes in government leaders will signal either a completely new and radical way of doing things, or a diluted version of what has gone before. The latter is something of a stopgap, as decisions are made about what the new, radical approach should be. The removal of the top-rate of tax was a step change. It was a line in the sand that differentiated the new prime minister and her government from the previous regime. Doing such a rapid U-turn on such a distinctive policy has left people both confused and wondering where the next U-turn will come from.
The same applies when leaders, either new or existing, do U-turns too. This compromises the confidence of the employees in their leaders to make the right decisions and undermines their engagement in any needed change management initiative.
With the pace of today’s world and the speed that new data and information becomes available, we’re not saying that every decision needs to be permanent. The ability to change course based on new information is actually a valuable leadership skill. The best leaders are humble enough to admit that they don’t have all the answers and they’re not infallible when it comes to decision-making. However, the frequency and pace of U-turns should be minimised by effective and informed decision-making. When U-turns are unavoidable, they need to be backed-up with strong communications explaining the need for the change.
Underpinning change management is the need for credibility – especially when a leader’s new into the role. All eyes are on them and every mistake will be scrutinised. Taking the time to involve the right people when decision-making and communicating the rationale for changes will build not only trust in that particular decision but provide the foundations of trust needed for all future changes.