I’ve read something to the effect of the following when it comes to change:
Change initiatives wouldn’t be so hard if we didn’t have people involved…
The *ADKAR® framework is a popular change management framework because the concepts are easy for people to grasp and in doing so, provide a good chance those involved with change can implement it more successfully.
*ADKAR® is a registered trademark of Prosci (used with permission), a global leader in change management.
My current organization has gravitated to various change management models over the years but I’m a big fan of this model based on its simplicity and broad application. There is little customization involved whether you are taking about change at the business-level or at the individual-level, these principles will apply. On that note I’d like to share some concepts behind the model and how you can consider leveraging it (if you haven’t already done so) for financial change as well.
What’s with the acronym?
ADKAR® stands for:
Awareness represents a level of understanding regarding the need for change, why it should be made, including change drivers such as “what’s in it for me.” I can’t help but think most folks aspire to have some form of financial freedom; the choice that comes with what to do with your time.
Desire represents the willingness to support and engage yourself (or others) in the change initiative; it’s ultimately about personal choice and motivation. While awareness might be the first step in any twelve-step improvement program you’ll usually find there is the need for desire or some motivating factors that closely follow.
Knowledge represents the information, facts, data, and education and training requisites to know how to change. Knowledge is important but it cannot come before awareness or desire because we typically do not seek out how to do something we don’t want to do.
Ability represents our capacity to consistently execute on the change; it implies there is a level of quality associated with knowledge we possess. Think of ability as turning knowledge into meaningful action over time. Just because you know how to do something doesn’t mean you have the ability to do it. I think golf is a perfect analogy for this. The same goes with financial planning – it’s really not for everyone even if you know how to do it.
Reinforcement represents those factors to sustain change; it includes recognition, rewards and celebrations. Consider these “the carrots” for a job well done and not always the consequences for missing the mark. Most change studies have demonstrated that negative consequences tied to change tend to impede the change process – a much greater factor for continued performance is when positive reinforcement is tied to the behaviour.
What does this theory and this model have to do with financial management?
ADKAR® can be a powerful model for your financial journey since just as it’s my organization’s goal to realize its objectives it will only do so when it follows these change steps. Managing change at the organizational level must go beyond being busy. Organizations are far more successful when they follow a disciplined change recipe and in doing so, engage all relevant individuals involved.
When it comes to your financial plan, ideally you need to have the same discipline. It starts with awareness, it ends with reinforcement, and it includes the things I mentioned above in between. Reflect on this model and see how you measure up. If you discover you need help with your financial plan, that’s great. Consider reading books, blogs, joining online forums and meeting with a fee-only advisor to help coach and direct you along. You might be surprised to learn a little awareness might eventually take you a very long ways.
What’s your take on ADKAR® or other change management models?