Laws of change

Change is often not easy, but it is inevitable.  Research shows that the younger generations are frequently the ones who instigate change, which is threatening to the older ones, as shown by the story of James and his father, which we discussed last week.

What to do then? The burden then falls on the change agents, which means that the younger ones have to first convince their elders of the need for change.   They have to seek—and successfully get—support from employees, middle management, and other family members.   Of course, they have to ensure that whatever change, however small, is being done, does not ultimately harm the family business.

In their book “The Dragon Network,” Indonesian family business consultants A. B. and Patricia Susanto describe three laws of change.

Law of nature

“Any change program has to involve all organization members,” they say.  “No one outside the organization can force changes to happen without the involvement of the organization members.”

This was the law I had in mind when, in the case last week, I told James (second generation, change agent) that I could no longer successfully mediate the conflicts among members of his family. The patriarch was afraid of rapid change, and felt that family members themselves should have been able to deal with their personal issues, without guidance from anyone else.

Even with James, his siblings and his cousins requested me to stay on and work with them, I knew that lasting change would not come about without support from the patriarch.  I would be wasting my time and theirs.

The more major the change envisioned, the more the support of all key people is required.  If someone powerful resists change, then it probably won’t happen.

What would happen then?  Very likely problems will continue to plague the family business, until everyone finally believes that change is needed—or the business fails.

Law of chaos

“Any change will always create inconvenience,” say the Susantos.  “There will be resistance, particularly from those who feel that their power or income will be reduced and lost.  There will be suggestions or remarks that could break the spirit, such as ‘This change has no clear direction,’ ‘the new approach is confusing,’ ‘This change reduces performance,’ and so on. “

Managing family conflicts and creating a family constitution are not easy for families who do not communicate effectively, who have secrets from each other, and who do not fully trust one another.  In such a dysfunctional family, change is badly needed, but would also be heavily resisted by current leaders, who prefer to bury their head in the sand and pray that the status quo would hold (which unfortunately, often does not happen).

The only way around this law is to manage resistance, and to do that effectively, it is essential to comprehend the real reason behind such resistance.  Reasons are myriad, ranging from threats to power to embarrassment at having family issues out in the open.

Other reasons are:  “lack of understanding regarding the importance of change and how it should be made, lack of time to participate in the change effort, the feeling of inability to do the new tasks, and disagreement regarding the change when people think that the change is a mistake.”

Whatever the reason, the change agent should discover the reasons behind the resistance and then find the right strategy to manage it.

Law of Eden

“Any change program needs support from a person with high competence and commitment who can act as a positive role model,” say the Susantos.  “Followers surely want to know the benefits of a change if it succeeds, despite its risks and complexity.”

At first, I was optimistic that the needed changes could be worked out in James’ family and business, especially because James himself was the designated successor to the patriarch and the leader of the second generation.  I had assumed (wrongfully) that James had enough clout and influence to lead the change, especially since he had been so passionate about wanting to make improvements.

What James and I did not count on was the enormous fear of the patriarch to any kind of change, even if rationally the latter knew that it was sorely needed.  The patriarch’s fear was irrational, but it stemmed from many factors:  he had been burned before by changes in the family business; he found it hard to let go of the reins of the family business; he was by nature a private individual who was uncomfortable with sharing his feelings with his family.

Next Friday:  Too many secrets

Queena N. Lee-Chua is on the board of directors of the Ateneo de Manila University’s Family Business Development Center.  Get her book “Successful Family Businesses” at the University Press (email [email protected].)  E-mail the author at [email protected].