Changing direction Featured

8:00pm EDT September 25, 2008

Throughout his career, Bill Donges has grown accustomed to managing change.

“I’ve been a professional change agent,” Donges says. “I’ve moved from company to company. What you find is you have some current culture, some condition of the company ... and it wants to come to some new place. Sometimes, they know exactly where that is, and sometimes, they don’t, but you have to go through this transition.”

The problem with change is that it’s not easy to implement.

“There will be a lot of skeptics,” he says. “They’ll ask a lot of questions, and a lot of change initiatives simply don’t work because the people have resisted those changes and the uncertainty that the changes have caused. My rule of thumb on that is you have to lead your way through a change — you can’t manage it.

“You have to be out in front. It’s change leadership, not change management. You have to be out there making it happen. It’s work to do that. You will get people pushing back. You’ll see the culture not wanting to go to a new place. You have to take it there.”

His latest assignment has been the transformation of Lane Co., an Atlanta-based real estate management and construction firm. Since joining the firm as CEO in the spring of 2005, Donges has moved the company from being just a local player into a $220 million company operating throughout Georgia, North Carolina, Florida, the Mid-Atlantic and Texas. He has also increased the number of new construction units from 352 in 2006 to 1,329 last year. He did it by focusing on communication, setting goals and winning over employees who resisted the changes.

“It has a lot to do with your attitude and how you go into it,” Donges says. “It can look like a very tough battle, but you have to be into it and get a thrill of the battle. You know it can be difficult, but if you know what the end is, you can work through it. Just look for the positive in it. It’s the only way to do it.”

Communicate the changes

When you want to change something in your organization, you first have to let people know what’s going on.

“First and foremost, you have to communicate what you’re planning, what this new change initiative is, and you have to be very straightforward,” he says. “I watch people all the time. You get rhetoric, and the words don’t match up exactly in the people’s minds with what’s going on.

“They just communicate, ‘These are some of the goals and objectives,’ and they do it in a way that doesn’t include data.”

Providing data to your employees helps them understand the reasoning behind the change and helps them buy in.

“The communication isn’t just verbal,” Donges says. “It’s also data and performance information about productivity or customer satisfaction or financial performance. ... It’s not just happy talk. It’s not just having picnics and wearing buttons and having a lot of pep rallies.”

If you don’t provide the reasoning behind the changes, employees will get nervous and start to question their jobs and the company, affecting your ability to ultimately get changes implemented.

“People are wanting to hear the truth,” Donges says. “And they want to know, to the extent that you can share with them, what the problem is — we lost a major client, our quality numbers dropped, our productivity dropped. A lot of times managers or leaders hedge. They don’t really tell them the truth, and you have to face the truth.”

Even if you’re honest with people, they still may not understand or see the benefit of the change, so you also have to show them why they should change.

“They’re very skeptical when you start proposing these changes because most of them have been through change initiatives and might or might not feel positive about where you’re going,” Donges says. “If you feel you have got to go to this new place, you have to present it as an opportunity or you have to present it as a crisis.”

Lastly, explain big changes in person. Rolling out major company initiatives over the Web isn’t going to cut it. For example, when one of Donges’ leaders sent out a scathing e-mail to 20 people in the company saying that the sales department wasn’t doing its job, Donges had to address that person and explain that communicating via e-mail wasn’t effective.

“I’m just amazed that we’ve evolved to a new level of communication,” Donges says. “Talk to [employees.] People get fired and change initiatives are announced and get rolled out over e-mail overnight, and nobody’s communicated anything to the people.”

Create goals

When you’re leading a change initiative, you need to recognize that people will start to lose their momentum, so you have to keep them engaged in the process.

“When you’re trying to move people from one state to another, you have to create a sense of urgency,” Donges says. “You’re trying to move the company to a new place. Over time, people get fatigued, and they lose that passion.”

You have to create methodologies to keep the sense of urgency in place to keep people moving forward.

“Create precise, short-term goals, so that if they hit those goals, they see that we’re moving to this new place.”

For instance, when Donges arrived at Lane, the company had more than 100 accidents the first year he was there. He wanted to lower that number, so every board, department head and location meeting started by addressing safety.

“You have to get people’s attention,” he says. “Every single orientation, that’s the first thing that I talk about — safety.”

But establishing goals isn’t enough. You have to break that goal down and understand the smaller components.

“You can sit down and say, ‘I’m supposed to be in construction; I’m supposed to hit the goals of quality and cost and time,’ so that on the surface is very simple to do,” Donges says. “How you get the data and how accurate it is and how relevant it is to those three goals is important.”

For example, if Donges says he wants to be the highest quality builder in the country, he has to look at how that’s measured. Is it by the number of client complaints? The number of violations he receives from inspectors? Or his own quality-assurance process?

“It’s not easy to get there,” he says. “Sometimes, your initial understanding of what those goals are like doesn’t translate into an immediate data point. You have to understand what it means, and sometimes, you have to try some, measure them and see if they’re relevant.”

When testing your metrics, look for employee feedback. “That comes out when you start having your meetings with people and they say, ‘Why are we measuring how many nails we used last week? It doesn’t make sense,’” Donges says.

After you get feedback, then you can better hone what you’re measuring.

“You find yourself refining these to a place where you really get it,” he says. “You get the metrics right over time because it actually bares itself out because it shows that what you did is relevant to that word — quality.”

By tracking the data and promoting safety, Donges was able to reduce the number of annual accidents from around 100 to 30, and even the severity of the accidents has lowered. Beyond numbers, now when he talks to employees, they’re talking about safety, too, because they’ve seen how much he’s reinforced it.

“You could see now that safety was now a state of mind,” he says. “It wasn’t a rule or requirement. It was something they believed in, and you can look at the data and see how the metrics are working out for you.”

Deal with resistance

With any change, there’s going to be resistance, and Donges welcomes it.

“Not everybody on your team is going to support you,” he says. “The easy ones to pick off are the ones that are absolutely overt about it, and they tell you they don’t think it’s the right thing. I celebrate those people. I absolutely see it as a positive when I see people resisting. I encourage them to openly talk about it, and I encourage them to state their reasons. That leads to some good communications.”

The biggest challenge is dealing with those who aren’t so vocal because you won’t necessarily know who they are.

“The ones that are difficult are the ones that are going covert on you,” Donges says.

Sometimes, you won’t know they’re resisting until someone flat out tells you.

“You just have to know you’re going to have that,” he says. “Don’t try to subvert it. Just move forward. I encourage as much of the openness about the negativity because it forces more communication, which ultimately leads to people coming over to your side.”

When you’re trying to get someone on your side, present it as a chance for them to make a difference.

“You can look at the change as a crisis ... or you can look at it and say, ‘This is a tremendous opportunity — let’s roll up our sleeves and get control of what we can take advantage of here and find the opportunity for the company or division,’” Donges says. “You have to get a mindset that that’s what you’re doing and become passionate about it.”

Donges also warns that you have to accept the fact that not everyone will come to your side; however, if that resister leads a division or department, then you have to replace him or her.

“Put a new leader in — a change agent who’s going to affect that — otherwise, you’ll never make any progress if the leadership doesn’t believe it,” he says.

If you’re unsure of whether someone is buying in or not, then look around and really observe.

“You get feedback,” Donges says. “You get feedback from the performance of the division of the company. You get feedback from people who are leaving. You get turnover issues starting to develop. You get feedback from either their sales or their customer satisfaction numbers.

“Usually, it’s the data that exposes them, but what kills them is you see that people are not participating or being part of the change initiative. It stands out like a sore thumb, but you have to see that. The data already validates what you probably already know and what you’re hearing back from people.”

This is particularly important for certain initiatives. For instance, one change Donges made was to Lane’s technology system.

“If you look at the big scope of what you’re trying to achieve, you have to have certain people on board,” he says. “If you’re going to change your technology platform, you better have your CIO on board. If he’s not, your initiative is going to fail. You better understand — is he one of those who’s resisting this?”

If he is, you have to determine if it’s because he disagrees or if it’s because he doesn’t understand it.

“If there’s just resistance because he doesn’t understand, then that goes back to adding clarity everywhere you can in the communications process about why you’re doing this, what are the goals, what are the costs associated with the change, what’s going to happen to people, to computers, what are the issues that have to be dealt with, and just bring them out.”

HOW TO REACH: Lane Co., (404) 459-6100 or www.lanecompany.com