Clayton Alderfer developed ERG Theory and simplified Maslow’s hierarchy of needs into a shorter set of three needs: Existence, Relatedness and Growth [‘ERG’].
– Existence – At the basic level is the need to stay alive and safe, now and in the foreseeable future. This includes Maslow’s physiological and safety needs.
– Relatedness – When we feel safe and secure, we deal with our social needs and are now interested in relationships with other people and our status from which we derive a sense of identity and position within our immediate society. This includes Maslow’s love/belonging and esteem needs.
– Growth – Ultimately we seek growth and self creative expression both for ourselves and for our environment. When we are successfully growing, we feel a sense of wholeness, achievement and fulfilment. This includes Maslow’s self-actualization and transcendence.
ERG Theory recognizes that the order of importance of the three categories may vary for each individual depending on the circumstances experienced by the individual and also how the individual perceives the circumstances. According to ERG theory, focusing exclusively on any one need at a time will not optimise effective motivation. The leadership and management implications of this are that change leaders need to recognise that people have multiple needs to satisfy simultaneously.
The theory is less rigid than Maslow’s famous “Hierarchy of Needs” theory, and human needs cluster more neatly around the three categories proposed by Alderfer than the five categories in Maslow’s hierarchy. Also, unlike Maslow, he saw these needs as a continuum rather than a hierarchy, and thus his theory is more flexible.
There seems to a general consensus that ERG theory provides a workable explanation of the dynamics of human needs as experienced and expressed in organisational situations specifically in terms of why and how people’s needs can change:
- To their own changing circumstances
- Their own perception of those circumstances
- To their leaders framing and communication of those circumstances
Practical Application of ERG Theory to change leadership and management
(1) Impact of change initiative programme planning
At the planning stage of a change initiative, and especially when reviewing the full impact of the change initiative on the people who will be affected by it, ERG theory informs the stakeholder mapping and analysis process and influences the communication strategy, as it focuses change leaders on the impacts of these 3 fundamental human needs.
(2) Leadership and communication
From a change management and change leadership perspective, understanding and recognising these needs can influence and shape a communication strategy and a leadership style. For example, there will be circumstances where, in the interests of business survival, recognition and growth needs are not going to be met as existence needs are addressed – such as in major restructuring and business turnarounds where redundancies and major change to working practises are announced.
People are flexible and will adjust and accept this is if it is communicated honestly and accurately and if leadership is acting effectively by addressing the emotional dimension.
The framing or positioning of a situation by the change leader is extremely important – especially in knowing how to focus and present a communication about a difficult situation in such a way that it addresses Relatedness needs and Growth needs wherever possible and appropriate.
I am not talking about “spin” deception or any other form of manipulation here, rather I am referring to a leadership style that is based on the qualities and characteristics of transformational leadership and primal leadership. A leadership style that takes full and honest account of the impact of change on people and especially acknowledges and leads them through the transitions that they have to move through if the change is to be successful.
(3) Leadership skill
In my view, a key change leadership skill is knowing how to reframe a difficult situation in such a way that even though there are [or could be] threats to existence needs, people are motivated by addressing their relatedness and growth needs. An obvious and extreme illustration of this is the wartime political leader of military leader.
Longer term, it is [in my view] the responsibility of the change leader to create, stimulate, sustain values and beliefs that will foster and engender relatedness and growth as the norm, and to integrate them into the organisational culture.