Research indicates that a significant proportion of organizational change initiatives do not achieve their intended outcomes. A McKinsey study found that approximately 70% of change programs fail to meet their objectives, primarily due to employee resistance (39%) and lack of management support (33%). Similarly, Prosci's research highlights that 74% of leaders believe they have involved employees in change initiatives, yet only 42% of employees feel included, suggesting a misalignment that can hinder successful change implementation. These findings underscore the challenges organizations face in effectively managing change.
This failure of change also starts to form a negative reinforcing loop. Having lived in many growth-stage companies, many times it can feel like your company is just hopping from one change to another – seemingly throwing lots of ‘change’ against the wall over and over again, expecting something to stick. If that resonates, part of the problem might be that you don’t have a well-defined strategy – but assuming that’s not the case – you should seriously consider changing your communication approach to leading people through change.
Understanding the Polarity Model
During our Summit, the CCL team brought forth an inspiring concept from Dr. Nick Petrie, called the ‘polarity of change’. The polarity model depicts two dynamics: stability (current state) and change (future state). The reality is there are positives (+) and negatives (-) of both the current state and the perceived future state.
See my sketch from the session:
Most leaders will naturally communicate change as follows:
- Here are the negatives of our current state
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- This is costing us too much”
- We aren’t moving fast enough”
- “We need to grow faster"
2. Here are the positives of our future state
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- "Our bottom line will improve”
- “We’ll be more responsive to demands”
- "We’ll grow top line”
To wit, most recipients of this communication respond:
3. Here is what is working with my current state
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- "What we’re doing is working fine”
- "This is the way we’ve always done it”
- "We’re meeting the demands of our customers”
4. Here are the negatives of the proposed future state
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- "We can’t do more with less, we’re already over-extended”
- "Our culture will suffer”
- “Our customers will not be happy with this”
These communication tracks by the two parties (1-to-2, and 3-to-4) are in conflict with each other, creating resistance in the organization. Management continues to think and say, ‘Why won’t these people get on board with this change’, and the recipients, ‘Why doesn’t management get it...why aren’t they understanding our point of view?'
The challenge for someone tasked with leading people through change is to balance both dynamics simultaneously – to push the change forward while acknowledging the desire to keep things the same. This means honoring the perspectives of both groups, acknowledging fears, and emphasizing both the merits and limitations of the status quo. According to CCL and Dr. Petrie, the order in which you do this is crucial. A successful implementation of the polarity framework actually looks like this:
- #3 – highlight what’s working in the current state FIRST (positive)
- Acknowledge the strengths and benefits of the current system and assure team members that the future state should carry over those best parts. This validates those seeking stability and honors what the organization has achieved thus far
- #4 – address the risks associated with the future state (negative)
- There’s no way around it: change is often disruptive and will require additional effort from everyone involved. By admitting these challenges early on, you demonstrate empathy and transparency, which are critical in maintaining your team’s trust.
- #1 – point out the risks of the status quo (negative)
- Articulate the potential downsides and emphasize the pain of the current state if you keep doing what you’ve always done. This helps stability seekers understand the limitations of the status quo and makes the case for why change is necessary.
- #2 – emphasize the benefits of change (positive)
- Outline the positives that change will bring. This serves to inspire both groups and align the organization toward a common vision, giving everyone a reason to move forward.
- #3 – end on the positive
- Reiterate and acknowledge the benefits of where you are, and the hard work it took to get there
This reordering results in less resistance, and faster progress. Your organization will feel, believe, and think ‘leadership gets it’. You will have communicated empathy – pre-emptively articulating their concerns as well as they could have – taken them into account and made them feel heard and seen. You and your leadership team will have thought through this change carefully, weighed the benefits and costs, and still believe change is needed. You will still encounter some resistance, but on the whole, your organization will have more trust and confidence in their leadership team.
Moving into a Private Equity-Backed Company
The polarity model is incredibly applicable in the private equity (PE) space which, by its very nature, demands portfolio companies to lean into change.
As the CCL team walked us through the framework, I thought about how it might be applied to companies that have just taken on their first institutional capital to accelerate profitable growth. Transitioning from a bootstrapped company to one backed by private equity is a significant adjustment not only for founders and CEOs, but also for everyone from their executive leaders down to individual contributors. Here’s how a CEO might frame the change using the polarity model:
- Share what’s worked to get you where you are.
“We’ve achieved a lot by bootstrapping. We’ve been incredibly capital efficient and maintained complete control over our direction, allowing us to remain true to our vision.”
2. Acknowledge the risks associated with raising capital.“Partnering with PE investors means giving up some ownership and inviting new voices to the table. It’s natural to worry about how this will affect our autonomy.”
3. Touch on the risks of maintaining the status quo.“Without additional resources, we’re limited in how quickly we can scale. Not making a change could mean missing out on valuable growth opportunities.”
4. Highlight the benefits of taking the PE investment.“By partnering with experienced investors, we gain access to operating expertise and resources that can help us accelerate growth smartly. Not only will this expand our impact, but it could lead to substantial financial returns for all of us.”
As you can see, acknowledging both ends of the spectrum – from stability through change – lightens the blow of major company transitions. It gives key stakeholders a bird’s eye of what’s at stake.
Embracing polarity means acknowledging the push and pull between stability and change, between protecting your core and stimulating growth. This balance is key for leaders to navigate their organizations through needed change; once mastered, leaders can create an environment where employees feel heard and empowered to move forward together.