WHAT IS COMPLEX, CONTINUOUS CHANGE?
Change and adaptation have always been necessary for organizations to survive and thrive. Since the 1940s, the field of organizational development has generated hundreds of methods for managing change, from large-scale engagement to individual coaching and empowerment. Yet research shows that between 50 to 70 percent of planned organizational change initiatives still fail. A key reason is that most approaches to navigating change assume linear movement and offer a step-by-step, one-change-at-a-time methodology, when this is not the reality organizations face. Today’s organizations operate amid complex, continuous change, a “series of overlapping, never-ending, planned and unplanned changes that are interdependent, difficult to execute, and either cannot or should not be ignored.”
When companies try to undertake multiple change efforts using strategies designed for one-time changes, they end up with incomplete efforts, wasted time and resources, overlapping processes, and poor coordination. No real progress is made and companies fall further behind. Complex, continuous change demands a different method, one with the following five aspects based on experience of my new role as chairperson with Indian Society for Training & Development #istddelhichapter:
1. Prioritization: Navigating multiple change efforts requires trade-offs and therefore the prioritization of such things as resources and leadership attention.
2. Integration: When multiple change efforts are undertaken simultaneously, there needs to be a clear understanding of the big picture and recognition of where change efforts will be redundant or contradictory.
3. Not exceeding capacity: Too much change can be as damaging as too little. Leaders need to be careful not to overload a company’s resources and employees’ emotional capacity to deal with change.
4. Broader and deeper engagement: Complex, continuous change requires drawing on the intellectual capital of everyone in the organization. No one team or person can solve everything.
5. Agility: Multiple change efforts cannot simply be “rolled out” according to plan. Every change effort must be subject to the adjustments necessary when new information arises, unexpected results occur during implementation, or new priorities emerge.
LEADING COMPLEX, CONTINUOUS CHANGE
The model for leading complex, continuous change consists of four key actions — Discovering, Deciding, Doing, and Discerning — that are in “constant interplay.” While there may be greater focus on one action or another at any given point, there are no start points, end points, or steps in the model; instead, companies should always be moving among all four actions. At the core of the model are four corresponding mind-sets — think fewer, think scarcer, think faster, and think smarter — that must be adopted to succeed amid complex, continuous change. Leadership as a whole, not just the CEO, must adopt and share these mind-sets and generate the shift in how change is managed from the top.
DISCOVERING: THINK FEWER
The objective of Discovering is to locate viable business opportunities, craft a vision, and revise the vision as needed. Discovering requires a big-picture view and the examination of external realities that determine the overall direction of change efforts. Common problems during Discovery include an overreliance on internal perspectives, allowing past experiences to cloud future opportunities, and committing to too many big ideas. There are three subcomponents to Discovering: stepping back, scanning, and visioning.
Discovery requires a “time-out” to examine realities and possibilities. While this is typically the exclusive domain of top leadership, a Discovery team should include representatives of other key units and functions in the organization, with only a couple of members directly representing the top team. The team should steadily rotate members, but not all at once. This ensures that internal history is remembered but also that the redirection of resources or efforts is not shied away from. Stepping back means recognizing that even currently successful companies cannot stand still. They must always be assessing what competitors are pursuing, thinking about future industry changes, and using networks to gather feedback and insight. Pasmore suggests a 10-10-5 rule: The top 10 percent of leaders should spend at least 10 percent of their time thinking 5 years into the future of the organization.
The goal of scanning is to collect information about current external realities to determine what needs to happen internally. Data should be used to challenge internal views about what is critical and achievable. This means getting out of the internal company culture, interacting with other people, and observing customers. When employees interact with products from a user’s point of view, they often realize what needs to change. Scanning is not just about challenging current hypotheses but about creating new ones. The goal is to stop being in a knowing mode and shift to a learning mode to see what this reveals.
Most companies have a vision, but most visions are too broad to be useful to the people working toward them. Visioning requires crafting a specific and clear picture of an organization’s desired future. The vision should not simply inspire, it should be a call to action that guides Deciding, Doing, and Discerning in the short term. Companies should still dream big and set their sights high, but they should only do so with one or two major goals. This thinking fewer mind-set increases the odds of success by providing focus, urgency, and clarity. Visioning must be done by the senior team, because without commitment and alignment at this level, the vision will not be realized.
DECIDING: THINK SCARCER
The objective of Deciding is to prioritize the organization’s efforts so that the vision is realized. Organizations must avoid becoming overloaded with change efforts or they will not be capable of responding to inevitable, rapidly arising threats and opportunities. Deciding requires focus, discipline, and investigation to determine what needs to change internally so the vision can occur. The three subcomponents of Deciding are diagnosing, focusing and prioritizing, and scoping and designing.
Before a road map to change can be made, companies need to understand the nature of the gap between where they currently are and where they need to be to achieve their visions. Organizations cannot simply build on their strengths; they must identify barriers to success as soon as possible. For instance, it is not effective to notice sales are down, assume a single cause, and begin a change effort. Companies need to perform a thorough diagnosis and find evidence for what is happening. Typically there is more than one factor responsible (e.g., poor sales team training, product development, supplier quality, or competitor pricing) and a diagnostic model or framework can help. Companies should not minimize the effort necessary for diagnosis; better diagnosis leads to fewer but more targeted actions — it encourages a think scarcer mind-set.
Focusing and Prioritizing
With a list of diagnoses in hand, it can be tempting for companies to jump in and tackle them all. As was true during Discovery, companies must again take a step back, which is a core tenet of dealing with complex, continuous change. Once options for closing gaps are developed, they must be prioritized. While many leaders affirm that this is a vital skill, few claim to be effective at it, and the evidence suggests they are right. Many resort to a top-down approach, but this does not ensure that the best choices are made. Prioritization is improved in a collaborative process that uses systems thinking to discover overlaps and how actions can be combined. When people view the company as a system, they focus on how they can expend the least amount of effort to produce the greatest benefit for the whole.
Scoping and Designing
At this point, the company begins to create a road map for change — who, when, where, and how — with more specific decisions. Details are clarified later, but the trajectory for change has been set and will be difficult to reverse. It is particularly important at this juncture to create space for newly prioritized work. Rather than constantly adding to people’s workloads, companies need to let them know what they can stop doing so they have the capacity to refocus their attention. It is also important to practice selective engagement during Deciding, involving only those people who are truly necessary. Trying to engage everyone during scoping and designing is disruptive and slows down the process.
DOING: THINK FASTER
The objective of Doing is to engage the whole organization in executing the change strategy. Execution is always occurring, and speeding up the pace of change requires new processes and the mind-set think faster. Contrary to entrenched assumptions, hierarchy and top-down decrees that try to push change through quickly actually make the process slower. Doing requires a counterintuitive slowing down to communicate, engage people, and pilot ideas — the three subcomponents of Doing — in order to speed up the pace of change.
Busy people often ignore communications about change efforts, consider them a disruption or distraction, or are overwhelmed by the prospect of more work being added to their plates. The delivery of the message is crucial; it needs to grab people’s attention and sustain it long enough for the information to be truly comprehended. Hearing about a change effort directly from the CEO usually garners people’s attention, but this must be followed up by communication with mid-level managers with whom people can ask questions and raise concerns. Therefore, mid-level leaders must be equipped for this task before the CEO’s unveiling and have their own opportunity to ask questions and understand what is happening. Constant communication with mid-level managers is vital to complex, continuous change. Keeping them well-informed and aware of shifts helps them engage their direct reports and ensures everyone stays in touch with current priorities.
Part of communicating effectively is also listening well — effective communication flows two ways. This does not mean ending a meeting with, “Does anyone have any questions?” and a five-minute time allotment to field them. Companies need to keep channels of communication open throughout a change’s rollout, not just at its launch. People often do not know what their questions are until they start executing the change, and there are usually unanticipated consequences that they need to communicate back to senior leaders.
Good communication is a prerequisite for engagement; well-informed people are not yet taking action, they are simply prepared. Engagement prompts people to shift from a mental recognition of “This is important” to “I personally have to do X, Y, and Z about it!” The three key ways of sparking engagement are representation, repeated processes, and large-scale interventions. Representation commonly takes the form of a project team, with a representative from each team or unit responsible for enacting changes. Repeated processes often focus on quality control (e.g., Six Sigma), where a process is established and people are asked to apply it to opportunities they identify. Large-scale interventions are best for specific changes that are not likely to recur. They involve gathering large groups together to capture a vast number of inputs, reach major decisions, or solve a complex problem. At its core, the goal of any form of engagement is to transfer responsibility for enacting change “from the few to the many.”
Piloting and Implementing
Thinking and moving faster also requires new ways of working. When companies try to perfect a design, product, or process before implementing it, they often invest as much time perfecting the last 10 percent as they did creating the first 90 percent. Using rapid prototyping and piloting can speed up the process of change while also saving time and resources. More frequent iterations also reduce the cost of any failures and improve learning for future developments. Even creating mock-ups of a product or inexpensive prototypes and observing potential users interact with them can offer insights that are far more useful early in the process than they would be in the final stages of product development. An idea that looked attractive in a focus group may not look as stellar when people test a prototype. Also, users’ interactions during piloting may give designers ideas for new features.
DISCERNING: THINK SMARTER
The objective of Discerning is to improve an organization’s capacity to change over time by learning. When change is viewed as a linear and one-time event, the benefits of learning are not as great as when an organization seeks to get better at complex, continuous change. The learning process of Discerning is an investment, but one that will pay future returns because the pace of change is not going to slow. While Discovering involves an assessment of external realities, Discerning focuses on internal progress toward the vision. It requires the mind-set think smarter and uses data, metrics, and critical review to gain insight from past change initiatives that can be applied to future ones.
Aligning and Integrating
Too often companies plan only for first-order changes when they should always expect second-order changes, given the interdependencies and connectedness within an organization. In complex, continuous change efforts, achieving second-order change requires aligning and integrating actions so there are no barriers or major consequences to change initiatives. This requires leaders to listen to feedback directly from those enacting change while also gathering data to understand effects on the company as a whole. They cannot get lost in the details of what each direct report wants, nor can they always be out of the fray looking for larger trends; they must manage a balance between the two and resolve any conflicts between units quickly.
Success in complex, continuous change is measured not by hitting one-time performance goals, but by tracking how well a company improves in key measures over time. What measures are used will depend on the company’s vision, but the measures should be predictive or forward looking instead of historical. For instance, past sales trends or employee turnover rates can be observed, but there is no guarantee those trends will continue. Measures such as spending on new product development, training, and business development or number of customer visits by executives are predictive indexes that track investments in change.
Thinking smarter also means learning from past change efforts to move progress closer to today’s vision. Asking four key questions — What was expected? What happened? Why? What do we do different next time? — and regrouping to discuss them are vital to leading better change efforts in the future and making important adjustments to current ones. Rigorous testing, not guessing, should be used to determine what adjustments are needed. Once these are identified, acting quickly is more important than researching an ideal solution.
Successfully addressing complex, continuous change is a long-term process, but if organizations are truly committed to the method, they will reap the benefits. It will require new levels of rigor and deliberation, a willingness to learn by trial and error, and perhaps the help of mentors, coaches, or advisers. Leaders must be absolutely dedicated to it, willing to see things differently, and focused on changing their mind-sets first. They must take control of the change surrounding them to avoid becoming overwhelmed by it.