Can we really crack the code of change without trust?

Whether change is happening at the individual or the organizational level, we have all, at some point, experienced the challenges that come with change. It drives us to tap into the unknown, pushing our minds and bodies to think and act differently.

As individuals part of institutionalized organizations, we experience organizational change in different forms. We create strategies and apply systems and processes to reach organizational goals. Time and again, however, we read and hear that about 70% of change initiatives fail due to a lack of clear focus.

1. Theories of change

While change is elusive, understanding the main approaches to change strategies provides a better understanding of how to lead and implement organizational change. Following a study about the nature of organizational change over more than 40 years, Harvard Business Review (HBR) concluded that there are two main theories of change: type E, which is based on economic measure, and type O, which is based on organizational capabilities.

In most cases, organizations tend to apply the change theory depending on the objectives that need to be achieved. If an organization is striving for profitability, cost reduction, and increased shareholder value within a short period of time, then approach E is applied. While approach O is used when an organization is aiming to enhance its soft sides, such as by developing human capabilities and company culture.

2. Applying the elements of change

While the dimensions and elements of both change theories are the same, their application can differ depending on the organization's desired goals. When it comes to leadership, theory E is based on top-down leadership, while theory O is based on encouraging people to be involved from the operational level up to the strategic level.

The reward system when applying the E approach is based on financial incentives to align the interests of the different stakeholders. In contrast, the O approach relies on motivating the employees to stay committed.

The processes in the E approach are thoroughly planned to predetermine the desired results, and the steps required to achieve them. On the other hand, the processes in the O change strategy are explorative and emerge throughout the change journey.

The E approach to change management depends heavily on an expert team of external consultants who can provide political and psychological support to the leadership team during painful times of sudden layoffs. On the other hand, an O approach depends on internal resources and capabilities. In addition, consultants can be brought in to help individuals in the organization pragmatically shape their own solutions.

3. The key piece of the puzzle for change success

From my experience, there is another critical aspect that should be addressed - trust. Whether organizations are striving to increase profits or adapt new skills, I strongly believe that both approaches to change must involve individuals who trust the leaders driving the change.

It could be shareholders who are expecting an increased shareholder value, or employees who need to learn new skills.

Regardless of the approach used, trust is a prerequisite to creating effective change. As Franklin D. Roosevelt said, “It’s a terrible thing to look over your shoulder, when you are trying to lead and find no one there.”

4. The importance of trust in organizational change

Trust is created through actions. Building trust requires time so it’s essential to demonstrate trustworthiness early on in the change process.

Every change journey starts with the question, “How do we get there?”. This article clarifies the main difference between theory E and theory O of change depending on the approach. The answer to the question may differ, however, having mutual trust in any change approach is an integral part of the answer.

“Every hour that mistrust continues makes transition difficult to manage than it has to be." -William Bridge