Oct
23

Leadership Change Is Not Free

by  Jon Mertz  |  Change Management
Leadership Change Is Not Free post image

Change is a necessity. Our markets and competitive situations never hold still. Team members don’t sit still.

Adapting keeps us growing in what we do and how we do it. While change is required to meet new requirements, change is not free.

Leadership change carries a cost. Just as change is a necessity, certain costs of change are a necessity. Let’s explore some areas where the cost of leadership change is evident and essential.

Cost Of Education

To change, going back to school may be a requirement. School can be conferences, conversations, concentrated reading, or virtual classes. The learning costs are time as well as registration fees and travel. In many ways, these are the easier costs of education.

Another cost of education is our experiences. Often we experience change firsthand. Our experiences can result in failure, frustration, and loss of employment of leaders themselves and others present, whether directly involved or not. Through the chaos of change, the hope would be leaders will learn. However, experiential change can carry a very high cost.

Cost Of New Team Members

Another cost of leadership change can be hiring or firing of certain leaders. New people with the necessary skills and abilities may be needed to navigate or recover from the changes. New additions take time to ramp up as well as to implement the new directions required. Firing of leaders also carry the cost of disruption and compensation packages.

Cost Of Cultural Changes

With new or existing leaders, the organizational culture may need to shift and renew itself. To do this successfully, training, frequent communication, compensation incentives, and more elements may be required. There is a cost to the system changes along with the personnel adjustments.

Cost Of New Habits

For individual leaders, new behaviors are required. Gaining new behaviors translate into new habits. New habits will drive the shift to the new, necessary behaviors. Making new habits stick will take time, and there is always the cost of time. A personal cost may also arise. Some people can change faster than others. For the quick, the cost may be lower. For the slow, the cost will be great.

Cost Of Not Changing

The most staggering cost of change is not changing at all. With no change:

  • Turnover will rise.
  • Frustration will increase.
  • The costs doing business will grow.
  • The risk of your organization withering away escalates.

If a leader cannot adapt, then the organization will suffer, dancing on a slim edge of failure. The worst case is complete failure.

Jim Collins, author of Built to Last, notes only 71 companies on the original 1955 Fortune 500 list were still there when the book was written.

Although the fluctuation of the Fortune 500 list is inconsistent, there is always change in the list. This may be an indicator of the cost of not changing or just the cost of change itself.

The point is leaders cannot afford to remain fixed in their mindsets and abilities. Changes are always required to address new economic, business, and organizational demands. Change in generations is another shift requiring attention and flexibility.

Stereotyping generations is not an act of leadership; it is an act of stubbornness in understanding shifts and making prudent changes.

There is a renewed call to raise the standard of leadership and embrace change in thoughtful, proactive, and real ways. Changing presents real costs. Without change, however, the costs will be dramatic, and the status quo will close chapters to the next stage of growth rather than igniting new ones.

What other areas highlight the cost of leadership change? What are the costs of an unchanged leader?

About The Author

Articles By jon-mertz
Jon Mertz is one of the Top 100 Thought Leaders in Trustworthy Business and author of Activate Leadership: Aspen Truths to Empower Millennial Leaders. At Thin Difference, Jon writes and facilitates a conversation on how to empower, challenge, and guide the next generation of leaders.  »  View Profile

What People Are Saying

Jonathan Moss  |  24 Oct 2014  |  Reply

Great article John! Being in the technology industry I can understand change from not only a product and service perspective, but how what we do changes every day almost! Being able to adapt and continue to evolve is essential to lead!

Jon Mertz  |  27 Oct 2014  |  Reply

Thank you, Jonathan. There is a close linkage between business and personal change. Both cost. Both are necessary. Thanks! Jon

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