People-Centric Change: The End of Linear Thinking | Professor Julie Hodges

That famous statistic, that 70% of organisational transformations fail, turns out to have no evidence behind it whatsoever. So says Professor Julie Hodges, and she should know. As Professor of Organisational Change at Durham University Business School, and with 20 years of commercial experience at PwC and Royal Bank of Scotland, Julie is one of the world's leading authorities on how organisations change, and why it so often goes wrong.

In this episode, Mark Blackwell and Julie explore why the tidy, linear models of change that most organisations still rely on are no longer fit for purpose, and what a more honest, people-centred approach actually looks like in practice.

In this episode:

• Why the "70% failure" statistic is a myth, and what we should be asking instead
• The difference between incremental and transformational change, and why it matters
• Why change is messy, emotional and rarely linear, and why that is actually normal
• The critical role of sense-making and why people resist change for good reasons
• Co-creation versus design by committee: how to involve people without losing momentum
• The evolving role of HR in leading organisational change
• How AI is raising the stakes for change management, and what leaders should do about it
• The skills managers need most: empathy, courage, agility and digital fluency

Julie's books mentioned in this episode:

• People-Centric Change
• Managing and Leading People Through Change (3rd edition)

Both are grounded in empirical research and written with practical application firmly in mind.

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Transcript

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Change Is Not Top Down

Julie Hodges 0:47

However, they tend to come from the notion that change is done from the top down in an organization. And that's no longer the case. Change can come from the bottom up, it can come from across the organization. Change can even emerge rather than being planned. I have a real concern that organizations still struggle with change. And often because they are using these linear approaches to change as well, which, as I say, are no longer fit for purpose. They have many elements that are missing. And as we know, that change tends to happen much more from either an emergent or a cyclical approach.

Mark Blackwell 1:31

Hey everyone, good afternoon. Welcome to the Arkaro Insights podcast. I'm your host, Mark Blackwell. Today we're talking about a number. 70% of organizational transformations fail. Well, I've no idea actually if this is really true. It could be one of those things which is quoted or not. And I think you know a lot of people reference it. Maybe our guests today can clarify that. But I think we can all agree on change is a lot harder than it really might appear. And for years we've been thinking about organizations as like machines that you can control. And you just need a linear checklist, and if you tick off all the items on the checklist, change will happen. But our guest today, I think, is going to

The 70 Percent Myth

Mark Blackwell 2:18

challenge this idea. And I'm thinking of organizations being more like complex living, breathing organisms, where we need a different approach. And so today I'm going to introduce you to Professor Julie Hodges. Julie brings a unique perspective of both academic and commercial experience, bringing 20 years at PWC and Royal Bank of Scotland, together with her current role as Professor of Organisational Change at Durham University Business School. Julie, it's a pleasure to have you here. Oh, thank you, Judith. Well, this is uh a conversation I've been looking forward to have for a while. I know you've been really busy, but I read your last book and loved it a lot. Lots of great stuff in there. And I think you're right. You in your book, in your writing, do the same as your career, which is carefully balance practical experience with academic rigour. And uh I loved that approach right off from the first chapter, and as I was reading right from the beginning, you broached this subject that many of these linear models of change that we've come across may not be right. So hang on, before we get going too deep into the weeds, what what what is a linear model for change?

Julie Hodges 3:36

Yeah, I mean, it's a thank you. It's an excellent question, Mark, and thank you for um reading some of my books. In fact, I'm gonna start by saying that statistic that you said right up front about 70% of change programs fail, is that is is complete fable. There is no evidence whatsoever to justify that. It seems to be one of the sort of myths of change that seems to be perpetuated, in fact. Um and I think we need to put that aside, as you said, and we need to focus on how we can do change better. And one of the ways that that can happen is also to stop using linear traditional models for change. Now,

Why Linear Change Models Fail

Julie Hodges 4:16

these models have been around for a long, long time. I'm not going to mention any names because I'm sure your listeners will know which ones we're referring to. But there's a lot of they're good from the perspective of they provide a very simple checklist. However, they tend to come from the notion that change is done from the top down in an organization. And that's no longer the case. Change can come from the bottom up, it can come from across the organization. Change can even emerge rather than being planned. Linear checklists also are no longer fit for purpose because there's so many elements that are missing now. Change itself is changing, as we know. We're living in an era of transformation, we're living in an era of when AI is imposing on organizations, and that is getting faster in terms of the technological developments that it's bringing with us. And I have a real concern that organizations still struggle with change, and often because they are using these linear approaches to change as well, which, as I say, are no longer fit for purpose. They have many elements that are missing. And as we know, that change tends to happen much more from either an emergent or a cyclical approach, in fact. So it's not just a matter of tick, tick, ticking a number of stages. Often there's a with cyclical or a spiral model of change, it means going around the cycle several times. And it is not change. When I talk about change, I'm talking about transformational change. There's also what's called incremental change, which happens step by step. And that's a sort of change that is happening around us all the time. And sometimes we don't even notice it happening, in fact. And when people talk about constant change, they tend to be talking about incremental change. Transformational change, on the other hand, tends to hit the deep structure of an organization. It hits the strategy, it hits the structure, it hits the mission, it hits how work

Emergent Change And Spiral Thinking

Julie Hodges 6:22

is done, it hits the behaviors of people too. And that makes change more complex. It makes change more messy. And change is complex, it's messy because people are involved in it. And a lot of these linear approaches to change, why they're no longer fit for purpose, is because they don't focus on the people element. They're great from the process side, but they don't focus on the people element of it. And certainly, if we want change to be successful, we need much more focus on what I call people-centric change. And that's about getting a balance between the process and the people side of it. It's not about throwing out the process and just focusing on people, but it's getting a much better balance, in fact. Because ultimately, change is only successful, it's only implemented successfully and sustained successfully because people change their ways of working, they change their ways of behaving as well.

Mark Blackwell 7:21

Julie, godness me, it's a relief to hear one of the global experts on change describe it as messy. I mean, it is that brings some truthful honesty to the process because all these chevron linear processes make it look so clean and forecastable and manageable, uh, but it's a relief to hear from you that it really isn't like that. And it ref reflects much more on my own personal experience. But you know, so what? If it's not this beautifully clean process, because we all our brains want this certainty of delivery, and that's for goodness sake, if you're in charge of a business and you've got to deliver change, what you want to hear is certainty from consultants or experts. That's what your brain wants, because you've got to deliver. If a linear isn't

Transformational Versus Incremental Change

Mark Blackwell 8:08

the approach, then goodness me, what should you do on Monday morning when you've been told, hey, you've got to really to implement the strategy, we've got to do some major change in this organization. What would you do?

Julie Hodges 8:19

Yeah, well, I would say is rather than one person at the top of the organization saying, This is what we need to do, there needs to be some time to actually have conversations and engage people that will be impacted, that will influence the change, that will be affected by any change, or that are, you know, have expertise. Because change and research shows us the most successful change is change that actually, whenever feasible, engages people in it, that engages the key people that will be affected, that can influence the change as well, too. And we all can easily say, oh, this is what we want to do and get on and do it. But again, change that is imposed because one person on a Monday morning has been told they have to do something, is not going to be successful. Change has

People-Centric Change That Sticks

Julie Hodges 9:06

to be done with people rather than to people, in fact. So I would say it's about sort of rather than just galloping into it, it's about taking a moment to step back and think, okay, who else needs to be engaged? And I think I always have the caveat that says, whenever feasible to do so. So I spent 20 years leading and managing change in business. I'm a realist. I don't just live in an academic bubble. I know that sometimes change, there's a need for change being imposed, i.e., if there's new laws or regulations or there's a crisis. When the pandemic hit, we did not have time to sit around discussing how are we going to deal with this. We had to react very quickly. So what I'm talking about is whenever it's feasible to do so. And that doesn't need to take a lot of time. Having conversations about what the challenges are, what the opportunities are, what are some of the ideas about how these can be addressed doesn't need to take a lot of time actually. But it can be so fruitful and so beneficial and ultimately have a positive impact on ensuring that any changes are sustained in an organization and the benefits achieved because any change I think has to add value and it has to be innovative wherever it can be, but it also has to realise its benefits too.

Mark Blackwell 10:26

Yeah. I think that understanding phase or sense-making phase is critical. I've yeah, every year you do more, you learn more, and I become increasingly convinced about that. And I look part of my own career, I mean, I've been on both sides, all sides of the change fence. I remember being acquired by a much larger company, and I remember that what I thought was perfectly good rationale as to why some of the ideas wouldn't be coming in, and I might have got perhaps, I confess, emotional about this from time to time. And I'm sure that the other people just thought that I was a moaning, angry, venti person who was just delaying the process. What can everyone do to try to overcome this reality? I'm sure it is.

Julie Hodges 11:12

Yeah, and I think what you have described really clearly, Mark, is that change is an emotional process that people bring themselves to work. They bring their, you know, their characteristics, they bring their traits, they bring what's happened the night before, etc. So we all bring our emotions to work. And when a change is announced, that that can hit people. Either they can feel fantastic, we need to get on and do this. This is what we need, it's going to be really beneficial, and they can have the energy to do the take the change forward. But for some people, change can be very scary. It can, as you said, create uncertainty, it can create fear, and they find it hard to deal with. I mean, and particularly they'll be thinking about how does this impact on my job? Do I have the

Sensemaking And The Manager’s Role

Julie Hodges 11:59

skills to be able to implement the change that I'm being asked to do? So, to address that, what people need to do is they need to, as you say, they need to make sense of it, which is making sense within their context, making changes personal. So they need to make sense in terms of what does it mean for the job that they are doing? How will their job change? Will they be working with different people? Will they be working in a different team? What skills will they have to be able to learn or unlearn? And also in terms of will they have a job at the end of it as well? So I think what's really important, managers play a really key role when it comes to change. I think there tends to be an overly an overfocus on looking at the leadership of change, but actually managers play a real key role, and they need to help people make sense of it. And that sense making can happen through clarifying what the rationale for the change is, so why it needs to happen, how it will happen, who it will impact on, when it will happen as well, too. And ultimately, what people want to know is the impact on their job. Yeah, that's what's important, and that's what they need to make sense with as well. And knowledge and information can help do that, as can having a safe environment where they can raise any concerns, any issues, any fears that they might have as well, without being told off, without it fear, you know, feeling that they'll lose their job because they've said they're really concerned about a job. And and and managers can create that environment where it's okay to say, actually, I'm really concerned about this change.

Mark Blackwell 13:43

I was reading your book again, that experience of my life being a sort of a vocal cricket critic of what was going on. I think maybe that's a bit harsh on myself, but just being, you know, part of the process of providing feedback. I think as you put the science to it to sort of help me rationalise it, those people who are apparently objecting the most are emotional, or because they've got a stake in what's going on, and it is actually conceivable that the ideas may not be, if you just dig a little bit deeper, completely bonkers, and there may be something useful to get out of that in the whole change process itself.

Julie Hodges 14:21

Yeah, absolutely. There is really usually a reason why people react. We all have a reason why we react as we do. And often people will be opposing change because they feel actually nobody's asked us about this. Maybe they have a better way of doing it, maybe they've got all sorts of competing other workload issues because change ultimately intensifies work. It's something that people have to do on top of their daily tasks. Maybe they're just being downright stubborn, and that's a completely other issue that has to be dealt with. But I think again, managers need to take the time just to find out why is somebody reacting as they do? What's driving that behavior? And managers may say, oh, well, that person always reacts that way. Okay, but there's still a need to find out what is it that is making them react, resist to a proposed change, too. Because often people are not given the opportunity to say, well, actually, I think it's the wrong idea, or I've got a really good idea that I just like to be listened to. And I think it's about listening to people, but people need to be heard as well. That's vital, in fact. And that doesn't happen a lot, particularly with frontline staff who are doing jobs. Usually the change is just imposed on them and they've had no engagement in anything to do with the decisions that have been made about it.

Mark Blackwell 15:38

Yeah, I mean, you're so right. You mentioned AI as one of the big opportunities, and I'm just thinking about what must be happening at the moment in so many organizations where someone has selected an AI tool because they're sold it and it seems appropriate, and then imposed it on an organization. You know, what would you advise in that situation right now?

Julie Hodges 16:00

Yeah, I think AI, you know there's a lot of hype about it. You know, I I growing up through the evolution of technology, and I'm a great advocate of technology, and I think we have a lot of hype at the moment around AI. AI is moving faster, though. I think the developments are are are happening very quickly. I think AI needs to augment the work that people do. It's not at a stage where it's going to take over. Yes, there'll be certain operational

Resistance As Signal Not Noise

Julie Hodges 16:25

transactional jobs that AI will be able to do. It will mean re-evaluating the roles in organizations and it will involve reskilling and upskilling people as well, too. That's important. And I think it's being clear and transparent about that. I think rather than rushing in to think, you know, we need AI to do this, this, and this because our competitors are doing it, it's about actually taking a time to think about what's the best approach where we can work with AI and AI can support what we actually do as well.

Mark Blackwell 17:00

So I'm putting myself right now in the in the shoes of you know a leader. We've now convinced them that listening to people is a very effective part of the process if we're doing any change. But he or she is still feeling under time and budget pressure to deliver results, right? So that's that's the mental model I have for myself right now. So we think about understanding, okay, so we listen, and so why don't we just design a solution and make it? Isn't this co-creation stuff? Isn't this just designed by committee? And isn't this going to be very inefficient? How would you react to anyone who said that?

Julie Hodges 17:36

Yeah, I I I think a lot of managers do come up with arguments against it, and that's because they're not willing to take the time to encourage collaboration. I I think if they want the change to be sustained effectively, again, research shows us that wherever change is co-created, where people, where teams collaborate on the change itself, then it's more effective. And I think it's worth taking time to get the right people around the table to come up with the ideas, come up with the approaches that can be taken as well. Because ultimately, it's these people that will have to implement the change and make changes to their ways of working and their ways of behaving. So it's worthwhile investing the time up front rather than getting to the stage where they discover they've invested so much time and money in a new process or system or whatever it might be, and it's not working.

Mark Blackwell 18:34

Yeah, you were completely right to call out the accuracy of the 70% number, right? But there is clearly a high failure rate in many change processes, which means that we've got to do something different for many organizations, and you you're you're giving a few pointers to that. Um I often wonder, you know, that when I look back on past transformations, for one reason or another, I often thought, well, why isn't the HR function more engaged in in what's going on? And have you ever come across experiences of where it's worked well or any data suggests that there's a hunch there about something?

Julie Hodges 19:16

So, you know, yes, I did a global research project on the role of HR in change a few years ago and wrote a whole book about it, in fact, about the role of HR. And and AI can be a really beneficial tool for HR in that it can take away lots of the transactional stuff that HR have been doing for years and years. All of that traditional transactional stuff it can take away from HR and free up HR to be much more involved at a strategic level with change. So HR should not do the change, that's not their role, but it's absolutely they should be there to help facilitate change and to support managers and employees with the change too. So shifting from that transactional to a much more transformational role where they can coach managers, where they can provide the support that people need as they go through a change experience. And I and I think I'm, you know, I can't name any organizations, but there are some that are that are doing that, you know, people that even those that have renamed their HR functions from human resources to people, departments,

AI Change Without The Hype

Julie Hodges 20:27

whatever that might be. So there are some companies that are beginning to do that, in fact. And and over the years, there's always debates about is this the death of HR or not. So to avoid that happening, HR do have to make the change. And the research that I did showed clearly that there's people in HR who are keen to make the shift. What they need is the support at an organizational level to do that.

Mark Blackwell 20:53

Just as an aside, the last podcast was with Charlene Lee, and who's got a book coming out, and she pointed out to the the vaccines company Modena, that came with a COVID vaccine fame. They have put the implementation and design of AI underneath the HR function. Which is quite radical, but it just shows that their way thinking about getting the work done requires a holistic approach to resourcing workflow patterns and all of that, which is whole part of the change process, which I thought was quite an interesting uh little sh little twist. I don't know how well it's going to go, but it's certainly an experiment to think about or watch at the very least. So I'm still trying to get my head around, trying to really communicate clearly to others about why a linear process needs to move towards a more cyclical process. And so far, we've put a lot of emphasis about understanding the problem, and that comes up as a big feature that we're probably underdo as humans in many areas of defining the problem before we start to solve it, and getting the actors involved in the whole process so that it is a team organization, not a top-down thing, right? But when does it stop becoming a linear process? Because that what we've done so far is still a little bit linear, if that's it, it makes sense.

Julie Hodges 22:23

Well, a linear process is thinking you'll start on eight with an A with a change and end up at B. And that never happens because sometimes you have to go to D or you have to go to W or whatever. So it never actually starts. You have to start somewhere with change. Yeah. What and that doesn't mean then that what follows on is an A to B process. Yeah?

Mark Blackwell 22:43

Yeah.

Julie Hodges 22:44

So it's about thinking about where you start.

Co-Creation Under Time Pressure

Julie Hodges 22:47

And change can be planned, and that means looking at okay, what are the internal and the external factors that are impacting on an organization that are driving change, whether that's political, economic, geopolitical issues that are are happening every day at the moment that are impacting on organizations, technological, etc. So I think there has to be a starting point, definitely.

Mark Blackwell 23:10

I'm thinking now of practicalities. We've both been in the commercial world. So there are two things I'm thinking about. You know, whoever is delivering the change to the executive team or to the board, how do they move away from if I'm not on this schedule that you want me to be on, I must be wrong, to hey, it's normal that I'm not on my schedule, and this is the benefit or something. What advice would you give to someone reporting upwards?

Julie Hodges 23:35

Because yeah, it's a really good question. Mark, I think though the nature of change is changing. So change is less about a project now. Change is much more an experience that it's actually something that's happening all the time in organizations. Um change also can be emergent, that it's not planned. The pandemic was an emergent change. We didn't we couldn't sit down and plan for it, it happened. And there's more of these emergent changes happening all the time. What it requires are capabilities. So up until now, change is usually something that's additional on job descriptions and role descriptions. What we actually need is we need that the capabilities that are part of being a manager. Yeah, they're part of being a leader. It's not something that's different, it's part of how they do their job. It's the skills, the knowledge, the experience that they need in order to deal with ongoing change experiences. There is a lot of managers that are having to deal with things like the impact of AI, things like increases in tariffs, et cetera, that have never experienced managing change before. And, you know, that's a tough place to be, particularly if they're having to deal with the ambiguity and complexity of change. So it's about upskilling them and making sure they have the skills to be able to do, to deal with continuous change too.

Mark Blackwell 25:03

So thinking about your people-centered approach, what will be some of the key skill areas then that you think managers should have that they're not getting enough of?

Julie Hodges 25:12

Yeah. So they need to, and none of them will be a surprise. There needs to be empathy. It's really important with change, being able to understand oneself about how we deal with change. And that picks up the point that you mentioned about the emotional process. So, how do we react when we're faced with a change in an organization? But also, really importantly, understanding others' perspectives and being able to do that through questioning, through listening to them, through asking the right questions. That's important. There's also a need for agility and adaptability and being able to move fast. What I'm hearing at the moment in research I'm doing with organizations is also there's a need to be able to make decisions quickly. There's lots of decisions that have to be made fairly quickly these days because of the changing environment we're living

HR Moving From Transactional To Strategic

Julie Hodges 26:02

in. So it's being able to take bold decisions, courageous decisions, so having courage to take decisions and to take them at speed as well, that's important. There's also a need for digital fluency too. So I think a lot of managers are learning as they are going, and many of their staff are probably more experts in AI than they are. So that we have to have that digital fluency as well. Yeah, I think these are the things that come to mind.

Mark Blackwell 26:32

So, Judy, thank you for that. That's been a great tour. And the emphasis, the big takeaway message, I think, if I were to is stop thinking about change as a top-down approach, but it is the team a way to do it, which requires people-centered leadership. And therefore, any fundamentally, change is constant. So, therefore, change is part of a manager's portfolio of what he needs to be doing. We were brought to this conversation because of your book. Maybe can you just let the listeners know of your vast number of books, which one they might want to think about picking up and reading, or any logical flow to that and where can they find them?

Julie Hodges 27:07

Sure. Well, I'm actually I'm I'm writing my 11th book on change, which is all about well-being and organizational change, Mark. But my all of my books, I think the important thing is they're based on empirical evidence, but they're very practical. They all have a practical slant on them. And I would say, in terms of our discussion, then probably I have written a book which is called People-centric Change. That's an excellent one. And also the third edition of my managing and leading people through change. That's got lots of up, it's got a whole chapter on opposition, etc. So it's right up to date. And that came out this year. And as I say, what's different about those books is that they refer to research, but they are very practical. So they have at the end of every chapter practical implications for managers, leaders, readers across the globe to actually be able to take forward.

Mark Blackwell 28:04

Julie, and I also want to comment to listeners, Julie's very active on LinkedIn, so you can follow her there if they get lots of small but very useful bite-sized nuggets to start your day from, which I again thank you for, Julie. And I'm sure you wouldn't mind if anyone contacted you from there.

Julie Hodges 28:19

But Yes, please do.

Mark Blackwell 28:21

This is I just to emphasize again, I think as you get in dip into the material from Julie, maybe it's some people like me that resonate from it, but it's not it's anecdotes supported by real science and research that makes it powerful stuff. Thank you, Julie. Been really kind great to have you on the show today.

Julie Hodges 28:38

Thank you, Mark. It's been a pleasure.