Leading Exponential Change

by Erich R Bühler

  I used to think that anyone would readily adopt a good idea without delay or hesitation. I figured a good idea plus a plan equaled certain change. I now realize how impossible this is without a prior understanding of basic social, psychological, and organizational functioning. Simply put, having a good idea and a business plan is far from enough.

  The first steps are to bring the problem to light, use collaborative thinking to analyze the problem, and explain the foundations of complex and complicated problems. Later, you can focus on getting support from within the organization to gain more traction.

  Above all, remember that training courses, PowerPoint presentations, or a leader’s desire for a better company will not lead to cascading change throughout the company. Old techniques such as the “stick and carrot” no longer obtain the best results. Real change results from using techniques that turn transformation contagious and exponential. And these new tools are the ones that you will learn about in the coming chapters.

  Are You Tasked with Driving Organizational Change?

  By: Dr. Sebastian Vetter, Innovation and Strategy Consultant

  Traditional change management relies on linear thinking in a stable world. You conduct a status quo analysis to define the current state (A) of your organization.

  You then define a clear future state (B) you want to achieve. You are looking for the shortest distance to get from A to B. Therefore, you make a plan and a roadmap with sequential steps you need to follow. With each step you take, you move closer to your desired future state.

  While this linear way of thinking about organizational change has proven successful in increasing operational efficiency and cutting costs in the late 90s it falls short in today’s VUCA world (volatility, uncertainty, ambiguity, complexity) where effect-result relationships are exponential, chaotic or simply unknown.

  How do you approach change when there is no defined future state?

  How do you navigate change when there isn’t a path you can follow?

  How do you stay on course if there are external forces that influence your speed and the direction of travel?

  One of my clients, a leading professional services firm was experiencing these challenges. The task was to install a business unit that would envision how the future for the whole organization could look like and act as an accelerator and instrument of organizational change. The challenge was to figure out how this unit should operate and stabilize in order to best fulfill its’ mission.

  You can learn more about VUCA in the following article: en.innova1st.com/20A

  The organizational context this unit was to operate in can be characterized as ambiguous with multiple stakeholders voicing conflicting demands, the occasional hostile response from the corporate immune system and powerful political forces.

  The first thing to be aware of is that in an ambiguous environment not seeing the path you should follow is normal because there is none, no one has walked here before. You need to become comfortable with ambiguity as you will face some unknown unknowns.

  As you don’t know exactly what your future state will look like you need to have a strong vision of what could be, and you need to share this vision with your team. Start moving as soon as possible, hit the market with whatever you’ve got. Don’t spend too much time with planning and overthinking, you need feedback from your customers to see what works and what doesn’t.

  Action creates speed and speed creates momentum. Run experiments on how to engage with clients, how to organize yourself, how to approach leadership, how to run meetings, how to track key performance indicators, etc.

  See what works and what doesn’t. A hard thing to realize is that failure is an option. What you are tasked with is hard. It has not been done before. You can actually fail. You can run out of money, lose the trust of your organization, lose valuable employees or fail at the market.

  Why do I say such a depressing thing no one wants to hear? Well firstly because it’s true, there are so many change initiatives that have failed. Secondly because I want you to understand that navigating change in a VUCA world is not an easy thing to do and that you can’t do it on your own. You need to be humble, you need to have a team that shares your vision and supports you when the goings get ruff.

  Think about the people from the south pacific venturing out in their canoes in a quest for new land. There was no path to follow, they did not even know if there was any land to discover. They must have had a strong belief that there could be land. Navigating by the stars they were able to change and to correct their direction of travel. Some canoes have reached New Zealand but… how many canoes did they send out that must have vanished somewhere in the Pacific Ocean?

  It’s impossible to find the shortest path to an unknown destination. It’s about exploring and learning and sailing with (and against) the wind and using currents to create momentum.

  Knowing when to pause in times of decreasing winds and when to pull out the rudders and start rowing. The key is to keep going and to continuously course correct based on what you learn along the way. In order to successfully navigate change in a VUCA world you need to:

  Become comfortable with ambiguity.

  Create a strong vision of what could be.

  Start moving and gain momentum.

  Have a mindset of experimentation.

  Continuous measure results and course correct accordingly.

  Be humble and realize that you can actually fail.

  Those elements might sound like soft skills; believe me they are not. They can make or break your change journey.

  What You Have Learned

  Some ideas that will help you think when you start a change initiative.

  The six principles to change your world and people around you.

  The non-linear relationship between cause and effect in a company.

  The differences between complicated and complex problems.

  The simple loop decision process.

  When it’s feasible to successfully use the complicated thought process for a complex problem.

  Have you ever missed any of the six principles of change?

  What are the differences between complex and complicated?

  Describe a time when you analyzed a problem as complicated when in fact it was complex. What would you do differently if faced with the same problem today?

  Can you identify three instances where a simple loop decision was made?

  “Change is the law of life. And those who look only to the past or present are certain to miss the future.”

  John F. Kennedy, 35th President of the United States

  The power of a single individual or group to peacefully alter the fate of hundreds of people, and even entire civilizations, is amazing. We’ve seen it in history and we observe it every day.

  I truly believe that every person can think and act as an agent of change. For companies, every employee is a potential change agent.

  Thinking it’s impossible to modify the company’s direction because you have a lower salary or lack authority is an outdated belief. I regularly see well-intended revolutionaries materializing changes where there was once only a desert. Being an effective revolutionary doesn’t mean having to go against current practices, being the strongest, or having the highest salary. It’s about knowing how to sit at a table with a firm point of view and help people connect with a better future. So what’s needed to make this happen?

  You might be considering transforming your company into a more sustainable model, trying to achieve greater competitiveness, or looking for possibilities to implement new products or services. To achieve all of this, you need to start with an idea and an explicit vision of change that enables those around you to walk in the same direction, talk
ing and dreaming together of that better future.

  The First Steps Towards Change

  Every change starts with someone with a different point of view and a passion for achieving something. If that person also possesses the right skills and mindset, he or she will help others take over the idea and turn it into a roadmap. For this to happen in a company, people must be able to see the beginning of that near future, trust the person who facilitates the change, and have no associated fears with modifications to their status or role.

  I’ve often heard conversations stating that X is better than Z, that Waterfall is better than Agile, that using estimates is better than not using estimates, or that less hierarchy is better than rigid corporate structures. You can argue along these lines to prove a point, but we know scientifically that this less-than-positive thought process leads to unfavorable mental behaviors that increase resistance and alienate people’s support.

  When a high-impact change materializes, we say there’s been a company reorientation. This reorientation alters original strategy, making it possible to reinvent the organization. But for this to happen, you must first establish that powerful vision of change. Ask yourself, What do I wish to achieve? Why must I do it now? What’s the intended benefit? Do I have the capabilities to make the change or develop the product?

  Your vision of change can motivate people to modify a specific area of the company (software development, marketing, human resources, etc.) or the processes of the entire company. But don’t confuse your vision of change with the corporate or product vision. Both are equally important, but they have different objectives. Both are equally important, but they have different objectives.

  The corporate vision speaks about the personality of the organization and how it will achieve success through its values, principles, and unique abilities. You won’t be able to implement a change if your company doesn’t have a clear company vision with a consistent message about what is said and what is done. All visions instill emotions and indicate opportunities for reaching the new state. Visions bring to light the challenges that have to be faced.

  An extraordinary vision of change should be easy to understand, occupy no more than half a sheet of paper, be able to be expressed within sixty seconds, be intellectually sound, and have great emotional appeal. It must constantly be reaffirmed by company leaders to remind people how important it is to go in that direction.

  I have seen more-traditional companies build large transformation plans. But nowadays we know that profound impact within an exponential growth company does not have to rely on a plan of great magnitude. This is where your vision of change will work its magic.

  Creating a Powerful Vision of Change

  Having an explicit vision of change helps everyone imagine and aspire to a better world. It also creates alignment within the company. This vision is one of the tools that will allow you to have greater impact. A vision of change also makes it possible to diminish feelings of uncertainty, which in turn leads to positive psychological attitudes and brain activation that largely eliminates the fear of failure.

  “If you do not know where you want to go, any road will take you there.”

  Cheshire Cat, fictional cat in Alice’s Adventures in Wonderland

  Start with a draft of your vision of change. Support your vision with numbers or other relevant information. Humans are usually motivated by positive messages that connect them to their own purpose and emotions—and that contain at least one of the following four items:

  Numbers: $123.874, £10.723, €253

  Stories/Anecdotes: I remember once when...

  Analogies: The new product will be as important as the discovery of penicillin!

  Emotions: Gestures, tone of voice, emotions sparked through your stories, etc.

  When you create a vision of change, you become the sponsor of the initiative—unless you are embarking on a transformation of great magnitude within a very large organization, in which case there will be multiple leaders. As a sponsor of change, you’ll have to count on the day-to-day discipline, time, and commitment for clarifying the change strategy and supporting those who need to understand what’s happening.

  To be a good sponsor, you will need to work on the following:

  Reinforcing the change’s message and increasing its visibility.

  Removing any initial obstacles.

  Promoting a healthy environment with values that match the change vision.

  Inspiring people and leading by example.

  Connecting people and resources to support the change.

  Pulling the “political strings” to facilitate the strategy.

  Always helping when requested.

  Evaluating economic factors.

  When taking a new path, people often have conscious and unconscious fears about how their role and position will change within the company. That’s why you must repeatedly clarify the rights, obligations, and expectations of each position during the transformation of your organization. Remember that the sponsor is not there to control. The sponsor is there to lead using motivational techniques.

  I know from experience that you’ll face situations where managers and other employees will have a dire need to know if the proposed change is viable, and this will generate a lot of nervousness. You’ll need patience when communicating your vision, because people have different perspectives, expectations, and personal challenges.

  To create a vision of change, bring together a small group of people in a room. Your goal will be to collaborate on a message that includes real (informal) stories that are meaningful to those who should change.

  Years ago, a close friend presented an improved mathematical formula for the calculation of motor vehicle accidents to the board of directors of the National Association of Garages in his country. He believed that the results of this formula would motivate the executives to change their existing accident-evaluation processes and habits. The workshop seemed to go well. He spoke for two hours on how accident scenarios would be calculated, the reasons why the formula should be used, and its benefits. But at the end of the presentation, one of the executives stated that no one had understood the formula and that they didn’t see why they should change the way they did things.

  To avoid a situation like this, the creation of your vision of change must be a collective effort. Those around you should also take ownership. Adopting your idea is an important part of their day-to-day life as well. Keep in mind that you can count on several visions of change, depending on how many change plans you have. But your vision of change should always be connected to a single company vision.

  The Importance of a Sense of Urgency

  A sense of urgency plays a crucial role in the success of your plan and in consolidating a change. People won’t feel energized if the vision is static, if a document is written by someone who isn’t part of their reality, or if it doesn’t matter whether the change is implemented immediately or within three years.

  There must be a clear sense of urgency before taking the first step. This sense of urgency is not a group’s frantic activity following a PowerPoint presentation, nor is it created by a meaningless date. The sense of urgency you need results from the following:

  External pressure from markets or competition.

  Abrupt changes in the organization.

  The economic consequences of inaction when facing a new market challenge (cost of delay) or understanding what action to take for urgent change without destabilizing the health of the organization.

  Clients who understand and support the change plan and would like to see the advantages as soon as possible.

  A deadline with a significant penalty if not met.

  Positive and visible results when removed obstacles lead to a new reality and a company with greater adaptability.

  Employees who recognize the benefits of chan
ge and who urgently want to change.

  Without a clear sense of urgency, such as a random deadline set by management, there can be no real and sustainable alteration of behavior, and the change will begin to lose traction after a few months.

  Before taking your first step, you must collaboratively identify the sense of urgency and make it explicit in the vision of change.

  Learning to Change

  I usually ask executives, “What do you want to learn from the transformation that you’re about to start?” On many occasions, I am met with silence or a response that only includes the desired outcomes (what they want to obtain from the transformation, or part of the objectives).

  I’ve worked in large corporations that spend millions of dollars a year in the management and communication of the change strategy. But very few invest money to empower people to take the transformation as a learning experience that will change the way they think.

  For many years, our education has rewarded those who simply follow a process correctly or offer a quick, single solution to a problem. But this differs from what is needed today to increase innovation and deal with volatile market situations. We must offer multiple solutions to the same problem from different perspectives, and we must question others to encourage the evolution of how they work and think.