By Gary Cassidy
The global internet, with its swarming customer communities, is making profound and rapid changes to the customer’s value equation; Tech and Digital offer lots of opportunity to create additional value at much lower cost; management systems are getting smarter; data mining can generate new perspectives from existing data; new operating methodologies help larger companies operate like start-ups; and if you are not talking operating rhythm you might be perceived as not in the game.
So how can your organisation not only keep pace, but keep adapting in ways that fully exploit these fantastic customer and business enabling opportunities?
To build an adaptive organisation, CEOs need to lead their people on a journey to create an organisation with:
In today’s changing world, these characteristics will probably decide an organisations fate. For existing organisations, changing to this mode of operation will come with significant challenges – most likely because of their embedded hard and soft capabilities that have underpinned past success.
Internal organisation inertia kills successful change management. Most inertia comes from a lack of willingness by people to change their belief system (mind-set) and this impacts their adaptive behaviour. When employees consider the prospect of change they do so from two frames of reference – either a gain frame or loss frame. If change is viewed from a gain frame perspective, people will adapt their behaviour to move toward it.
Conversely, unless it is understood how change will impact livelihood, status and workplace relationships then people will shift very quickly from ‘gain frame’ to ‘loss frame’ and move away from it. To keep people in a gain frame, try to scope the impact of change on the work place in your strategic narrative. Also, if you don’t need to, try not to put everything and/or everyone in play when talking about the change journey.
When seeking to make cultural change, remember that culture is an output, not input. The culture you end up with will be an output of how people are treated on the change journey and how your destination organisation eventually operates with regard to leading, teaming, values, organisation design, financial and management systems. It follows, that if you are talking about cultural change, your approach to analysing how to achieve it will need to be holistic.
To de-risk the change management journey the CEO needs a deep understanding of the capabilities of both the current and future organisation and the impact on operations of moving from one to the other. A basic tenant of systems thinking is that before changing a system you need a deep understanding of how it works today. This can be hard if you have been part of the existing wood work for some time. This is when an external view can be extremely helpful. Without this knowledge, you risk knocking the business off its operating axis during the change process. This will start to destroy present day value and erode belief in your change journey.
This will mean all hands to the pumps to right the ship before your change journey can continue. ‘Group think’ commitment by the leadership team to driving change no matter what will result in an off-axis scenario deepening. The CEO needs to work hard to encourage informed opinions to bubble up through the organisation about the impact of the change journey on day to day operations.
Stalled transformation due to rejection of the new:
Business leaders are bombarded by providers extolling the virtues of a range of new wave of solutions to help them change their organisations (e.g. digital, SaaS, data mining, customer centricity, agile, fast operating rhythm, fast fail project management, co-creation hubs). Adoption of these solutions as stand-alone drivers of change can deliver sub-optimal outcomes when they are not well integrated with the existing way of doing things.
Recently, a CEO confided in me that their mid-size organisation had tried to address inertia in their IT projects by adopting ‘fast fail’, a process adapted from start-ups that in a nutshell means ‘start fast – fail fast – learn quickly– adapt – redeploy’.
Unfortunately, while their fast fail approach enjoyed some success, it seriously damaged IT’s previously hard earned reputation for focus and reliability. Fast fail was not accompanied by a contextual change management narrative to shift mindsets. As a result fast fail was viewed through the lens of the existing operating paradigm.
Internal customers did not understand why fast fail was an important change management tool and what they should expect. There is nothing inherently wrong with a ‘fast fail’ approach, however in this case:
This foray into fast fail had significant repercussions. Overall momentum slowed in the execution of a new digital strategy. The good news is that they were quick learners and took decisive action. New external leaders were hired and a recasting of their change management strategy is underway.
Organisation inertia impedes successful change management.
Most inertia comes from a lack of willingness by people to change their belief system. To get people into a gain frame about change, CEOs and the leadership team need a great strategy story narrative that describes the from-to journey and the bumps along the way in human terms.
Keeping people in a ‘gain frame’ requires sensate leaders prepared to listen and address the impact these bumps will have on their people.
Gary Cassidy
Managing Director