Where a change costs one group something real, the sponsor offers a genuine offset, such as a new role, a budget, or a transition period, so that group's opposition no longer serves its interests.
An example
Five regional offices at a department store chain each bought their own home goods, and the merchandising chief wanted one central team to do it, which would end the regional buyers' authority over their assortments. The buyers had blocked a similar plan before by lining up their store managers. This time, before the proposal went to the executive committee, she met each of them and laid out what she could offer: senior buyer titles in the central team with a pay band one step up, a regional allocation role for anyone who wanted to stay in their city, eighteen months of guaranteed employment for anyone who preferred neither, and a say in which local brands stayed in the range. Three took central roles, one took allocation, and one took the transition period and left. When the proposal reached the committee, none of the store managers spoke against it.
Why it works
Resistance often has a plain cause: the change takes something real from a specific group, a role, a budget, a piece of authority, and opposing it is in that group's interest. A genuine offset matched to the loss changes that arithmetic, so agreeing becomes easier because the change no longer costs them as much as fighting it would gain. The proposal itself stays the same. The sponsor needs something real to offer within their authority, matched to what is lost and credible to the people receiving it.
The thinking behind it
John P. Kotter Choosing Strategies for Change (1979), by Kotter and Schlesinger, lists negotiation and agreement among six ways to deal with resistance: offering incentives to active or potential resisters. Each approach suits some situations and carries costs. Offsetting a group's real loss is that approach, aimed at resisters who could otherwise block the change, as regional buyers able to rally store managers could.
Richard M. Cyert A Behavioral Theory of the Firm (1963), by Cyert and March, describes the firm as a coalition of groups held together by side payments, with organizational slack as the room left over to meet competing demands. Compensating the losers is a side payment made openly: it keeps a group inside the coalition that a change would otherwise push into opposition, and it draws on slack the sponsor controls.
When it fits
Use it when the losers from a change are identifiable, their loss is concrete, and they have the means to block or delay it. You need resources or authority to offer, whether roles, budget, time, or a voice in how the change is done. It is worth the price when the change's value exceeds what the offset costs and the opposition would otherwise last.
How to use it well
Name the loss precisely and in the group's own terms, which means asking them what the change would cost them.
- Match the offset to the loss. People who lose authority need a role with authority; people who lose security need time and certainty.
- Make the offer openly, in writing where you can, and only within your own authority to deliver.
- Offer choices where possible, since people accept an offset they chose more readily than one assigned.
- Deliver on schedule. The next group facing a change will watch what happened to this one.
Put the same terms to the whole group, so no one feels singled out or played against a peer.
What it costs and where it backfires
Offsets cost money and set precedents, and the next group facing a change will expect similar terms. Some losers will take the offset and resist anyway. One too generous can look like a payoff and breed resentment among people who got nothing. Open compensation for a real loss, within your authority, is legitimate. It stops being so where the offset is paid from resources you do not control, or is offered in exchange for silence about the change's real effects.
When it is used on you
Offered compensation for a change that costs you, ask for the terms in writing, compare them with what you are losing, and negotiate. Accepting an offset does not oblige you to praise the change. If the offer comes with a condition that you stay silent about something people are entitled to know, decline that condition.