Mastering the Odds of Disruptive Change

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LAS VEGAS—Celia Swanson, who led a major change management effort at Walmart Inc. from 2006 to 2011, said the 12-phase project nearly faltered in its third phase when store managers balked at making major scheduling changes for sales associates.

The managers didn't understand why the changes were needed and believed that their past scheduling approach would continue to drive the retail giant's success. The change leaders realized they had to change gears.

"If the people in the organization say 'no,' then you're never going to be successful," said Swanson, who shared her experience June 24 in a concurrent session at the Society for Human Resource Management 2019 Annual Conference & Exposition. "You're not changing the organization, you're changing the people within the organization and how they deliver their roles. So we had to create a vision for them that said: 'After 45 years of tremendous success, this is the way that we can continue to be successful.' "

Swanson co-led a cost-savings and associate engagement strategy designed to transform store operations for 1.4 million associates.

More than 50 percent of organizations fail at change management because they can't get their workers to move past being complacent and satisfied with where they are, she said, citing change management guru John Kotter.

"That is why it was so terribly urgent for us to bring in a change management process because we had to help people understand the personal impact of change and the result of just staying at status quo," she said.

Sales at Walmart stores had flattened compared to other companies, and this hurt the company's stock value. So Swanson and her colleagues had to share that with Walmart workers and discuss how the organization would flourish after the transition and how that would matter to employees, she said.

Change management means introducing strategies for change, controlling that change and helping people to adapt to that change, she said.

[SHRM members-only toolkit: Managing Organizational Communication]

Critical to making change management successful is getting the support of a high-level sponsor, whose influence will ensure adequate funding and support. In this case, the sponsor was Walmart's chief executive officer. Walmart didn't have an HR function before Swanson came on board, but she and another executive developed one. That was necessary, she said, because an HR team understands the vision and strategy of the organization as well as the employees' concerns.

"Great HR people spend an awful lot of time understanding what's going on," she said. "And they're going to be brutally honest about what will work within the culture of the organization."

Walmart's change initiative began with the accounting department, where procedures were streamlined. Two-thirds of positions were eliminated, but employees were reassigned to new roles to avoid layoffs. But these actions made other departments nervous.

Swanson and her colleagues created a communication plan to better explain the urgent need to change. They started a series of "Straight Talks," led by the CEO and other executives who would listen to managers' concerns. They also set up small-group meetings between managers and sales associates to discuss the associates' concerns with how their roles would change.

Swanson and her team examined how the change would affect the associates' experiences, operational efficiency, the customers' experiences and Walmart's external reputation.

"We chose to be very transparent," she said. "The level of trust we gained was remarkable."

Her team learned that the single biggest factor for improving the company's external reputation was to show that the company was treating its employees well, Swanson said.

"One of the most important components in my mind was how our leaders would … understand that people at the center of change was the really critical outcome that had to happen instead of just engineering new ways of working," said Swanson, who wrote a book, Gracious and Strong (Clovercroft Publishing, 2018), based on the lessons she learned.

Several HR professionals in the audience said their own companies were going through significant change and were hoping to learn from Walmart's experience.

Rebecca Young of Itasca, Ill., said her employer had gone through organizational challenges recently and she hoped to try the small-group meetings that Swanson described. Irwin Spolter of Northridge, Calif., also said he found several ideas that could be used at his or other organizations.

For deeper learning on how to lead a successful change initiative, join us in an upcoming Leading Successful Transformations live online or in-person program.