When an organization makes an effort to change, it’s never a simple undertaking. Managers will exhort that there are costs for not changing, including lost market share and dissatisfied customers. But unless there’s a crisis atmosphere, these costs will take years to manifest, and workers will continue to be caught up in day-to-day pressures. They will see the cost of the change effort as being greater than the expected benefits.

Typically, successful change efforts occur when four events interact in a way that makes them greater than the cost of change. There must be:

• An identified need for change
• A clear vision of change
• Practical first steps
• A belief that change can happen

1. A need for change can be identified by examining the internal and external environments. Tools that can assist you include:
   1. Market research. How does the market view your company’s products and services?
   2. Nonconformance reports. Are there internal company reports detailing customer complaints and problems?
   3. Warranty reports. Are you allocating significant resources to replacing products under warranty?
   4. Returns and rejections. Are your products being returned?
   5. Field return product analysis. What are your representatives in the field telling you about your products and services?
   6. Team experience. Are your teams uncovering problems or having difficulty functioning well under current conditions?
   7. Media commentary and analysis; magazine and newspaper reports. What is the public learning about your company? Is there a problem capturing the media’s attention?
   8. Field service reports. If you make washing machines, for instance, are your repairmen finding that certain screws fail on a regular basis?
   9. Field visits. What problems do you see when you visit customers? Are your products and services fulfilling their needs?
   10. Management comments or direction.  Management should step to the plate if the company needs to shift direction.
   11. Problems and issues reported by internal customers. Your employees are an excellent source for spotting problems.
   12. Government requirements and regulations. Sometimes the government sets regulatory standards that necessitate change.
       
       
2. A clear vision is important to avoid confusion and misunderstanding. It’s important for the management team to agree on the vision and resolve any internal disputes so that subsequent messages are consistent. For instance, if an airline’s management lacks unified vision, it may not be sure if its biggest need is to stop giving away too many discount seats to low-yield groups, to deal with new competition on a specific route, or to reduce the losses from passengers who don’t show up for a flight. If management can’t even pinpoint what its greatest need is, it will have a difficult time communicating its vision to employees and investors.
   
   
3. Practical first steps help prepare the organization for change and achieve some quick wins. First steps may include making sure that the change is made throughout the organization and working to ensure that the change effort is completed as quickly as possible. Identifying first steps also helps solidify the vision and keeps everyone on the same page. It supports a belief that change can happen.
   
   
4. Without a belief that change can happen, no effort will be expended to make the change. Change requires a balance between meeting current objectives and fulfilling future objectives.