Leading Change

The Changer in Danger.

I recently finished reading The Prince, a famous book by sixteenth-century philosopher and polticial scientist, Niccolo Machiavelli. It's a controversial book, criticized as amoral and tyrannical by some, and praised for it's tough pragmatism by others. Machiavelli wrote it to offer young rulers some medieval street wisdom for leading in a rough-and-tumble political world, and pulled no punches in the process.

I certainly can't agree with all of Machiavelli's ideas. But I was struck by one observation toward the end of the book, worth all the others combined. Here it is:

"Let it be noted," wrote Machiavelli, "that there is no more delicate matter to take in hand, nor more dangerous to conduct, nor more doubtful in its success, than to set up as a leader in the introduction of changes. For he who innovates will have for his enemies all those who are well off under the existing order of things, and only lukewarm supporters in those who might be better off under the new."

Now, before we go labeling this as pessimistic and hopeless, remember this: we become effective change leaders when we fully understand how change works, and are fully aware of the costs for all involved. So let's break down his statement and apply it to our efforts to lead change.

Change is dangerous.

Introducing changes is an extremely delicate matter. It is dangerous to try. It is doubtful in its success. Why? Because change guarantees loss for some, while only offering the possibility of gain for others. As influencers, we should never take a change effort lightly. It is certainly possible, but rarely easy. If we fail to understand this, we fall prey to naivety that creates "flavor of the month" initiatives that fail time after time and reinforce cynicism and opposition. This is a hallmark of immature leadership.

Change guarantees loss for some.

As I wrote in an earlier blog about understanding loss aversion, we hate losing twice as much as we love winning. And as much as we'd like to think otherwise, every change we make requires some sort of loss. We lose out on North every time we drive South. We lose out on the benefits we enjoy today if we choose something different tomorrow. Change will always be opposed from those who like it fine just the way it is. Anyone who perceives themselves to be "well off under the existing order of things," says Machiavelli, will oppose change, directly or indirectly. As a leader, this means you should always expect opposition, and try not to take it personally.

Change offers a chance of good, but no guarantee.

Machiavelli tells us we'll only find "lukewarm supporters for those who might be better off" with any sort of change. They know there's a chance you'll fail. Every time we consider an opportunity or have to make a decision, we calculate the odds it will pay off for us. The sign on the side of the road may say, "I earned $5,000 in one day!" But we don't call the number, because we know the odds are slim to none that it would ever happen. Sure, the five grand payoff is fantastic. But the odds of it actually happening are so low that it's not even worth a phone call. We are naturally wired to calculate this "expected value" in every action we take. Effective leaders understand this. Whatever they think the payoff might be in their minds, they know it is half that or less in the minds of those they're trying to influence.

Changers face dangers. This is because changers create guaranteed loss and only the possibility of gain. When mature leaders understand the dynamics of resistance on the one side and the dynamics of doubt on the other, they can more successfully lead change.

Erik is the author of the personal finance small group and seminar program, Breaking Free: Financial Strategies that Transform Debt into Wealth. Take our free MoneyFinder Quiz to see just how much payoff Breaking Free can create for you!