How to ‘disrupt’ your own organisation without breaking it
Established organisations attempting to become more responsive and fast moving in the face of increasing change and uncertainty, need to overcome their own internal inertia.
How best to approach the challenge of building this continuous, sustainable change capability, that underpins both efficiency and innovation, is key.
In the face of increasing calls by Industry analysts, CEOs, media, governments and others to ‘disrupt’ your own business in order to drive innovation or embrace ‘digital’, question is: How helpful are these clarion calls for ‘innovation’ and ‘disruption for your organisation?
The challenge of change facing established organisations
Compared to established organisations, startups and newly created organisations are at an advantage in a changing environment. In their growth phase, they have not been around long enough to build up legacy technology, entrenched business practices and cultures. Additionally, they are constantly exploring new opportunities, and tend to be investing for future value realisation.
Unencumbered with legacy constraints, nimble startups and new entrants are generally able to rapidly adapt to, and adopt change.
For incumbent, established organisations, being able to rapidly adapt to perpetual change is typically more problematic.
Limitations of traditional change management methods
The ongoing challenge that established organisations face lies in identifying and then exploiting upside potential that change offers with a high probability of success at some point in the future – all in a constantly evolving and fast changing environment.
By the time traditional enterprise change initiatives have been identified, justified, budgeted, resourced, scheduled and implemented, the original requirements may well have shifted.
This results in adverse outcomes such as wasted effort, increased cost, missed opportunities, not to mention the risk of staff frustration and customer dissatisfaction, to name but a few.
It is important to recognise that established organisations operate under multiple concurrent restraints. These may include factors such as:
- Statutory, regulatory and other compliance mandates,
- Future customer commitments,
- Servicing legacy markets,
- Risk averse corporate culture,
- Depreciation burden for existing assets,
- Well established, organisational structures and business models,
- Non-adaptive internal processes,
- Entrenched, orthodox leadership competencies and practices, and/or.
- Individual KPIs and incentives that solely focus on reinforcing current capabilities
Fact is, because an incumbent, established organisation may exhibit many of the above attributes, should not limit its ability to develop a highly effective capability for responsiveness, adaptability and innovation, without jeopardising its current business.
To change, or be changed: That is the question.
For those organisations coming to grips with the apparent inevitability of ‘change or be changed’ should consider the following 6 factors:
- Asymmetry of perceived success
- Continuous, not discrete change management
- Building adaptive rather than change management capabilities is the key:
Let’s explore these in more detail
1. Context is king
Organisational change drivers are largely industry dependent. Aviation or medical industries will be substantially different from a bank, taxi, hotel chain, retail store or tech startup.
For example, each time we board a commercial flight, we take for granted that the entire aviation ecosystem that is supporting your safe and reliable journey from A to B has been effectively maintained, and changes are carefully considered and evidence based. The commercial aviation industry – for the most part, is governed by a suite of statutory, regulatory and other compliance mandates.
A retail chain has a completely different suite of constraints, as does a government agency, financial or legal services organisation.
2. Precedence is of limited value in fast changing ecosystems
The fact that showcase ‘disruptors’ such as Netflix for movies, Uber for taxis and AirBnB for hotel are referred to ad nauseam, how do these (and other) examples of disruptive innovation relate to your organisation’s specific context? The approach taken by organisations successful in transitioning to being responsive to change and innovative may not readily apply to your organisation.
Modelling other’s path to success in becoming innovative and responsive to change may not translate to your success.
The use of any particular digital technology will differ from one organisation to the next. Even though a standardised technology may be used, its application within and across the organisation will vary widely.
For this reason, reliance on reported ‘best practice’ in rapidly evolving environments can be problematic, if not risky, for your organisation.
3. Asymmetry of perceived success
Be aware of the asymmetry of perceived success of organisations that are ‘disruptors’ or ‘innovators’
Success is promoted, failures and poor outcomes are generally not.
Successes are marketed and promoted by organisations, technology vendors, media and other interested stakeholders, while disappointing results or failures are mostly not readily visible unless they end up in the media or through legal proceedings as occurs from time to time.
This may introduce a decision-making bias for your organisation’s approach in the adoption of new technologies to driving change and innovation.
This is especially relevant when dealing with a HIPPOs (HIghest Paid Person’s Opinion) within your organisation.
4. Recognise change as continuous
Organisational strategies and change initiatives that are characterised by elements such as a fixed scopes, budgets, timelines and resource schedules are likely to fail in business and technological environments that are subject to increasing uncertainty and change.
Deterministic change management methods may be more appropriate for building a bridge or skyscraper than for an enterprise digital transformation initiative where the value proposition may well change over time.
5. Build a capability for experimentation
“Things would never change if people weren’t prepared to experiment” ~ Cambridge Dictionary
Experimentation could apply to all aspects of the organisation such as products, services, internal processes, technology adoption, risk assessments, leadership styles, organisational structures through to business models. It is a proven, powerful method for validating the assumptions and expected benefits of your change management initiatives.
Prepare for failure as part of this process, however, recognise that failure is often a dirty word in the cultures of established organisations.
The reluctance to deliver bad news at work is a well researched and understood human trait known as the MUM effect. This needs to be carefully managed in the establishment of an effective experimentation capability.
To ensure that investments in building an experimentation capability yield results, set the expectation that rapid, limited scope, iterative, small-scale experimentation is preferable to large scale studies. This principle underpins the concepts of ‘fail fast’ (but don’t fail often!).
The most important fact remains: Don’t implement anything until there is evidence that it works – especially in risk averse organisations.
6. Building adaptive rather than ‘change management’ capabilities
An adaptive strategy and execution capability should be able to predict and accommodate the expected and unexpected changes in an effective manner. These could range from small operational fixes, continuous improvement or optimisation of processes, exploiting innovation or business growth opportunities or even through to a comprehensive enterprise-wide transformation initiative
An adaptive strategy and execution capability is an analytics-and-intuition informed ongoing activity or journey, which requires a whole-of-organisation, integrated engagement and governance capability.
This capability rarely exists in organisations that operate within top-down, functionally aligned structures and fixed strategic management approaches.
Key to building this adaptive capability lies in ensuring that at no stage are there material inconsistencies or misalignment between the organisation’s mission, strategies, tactics and operations.
The bottom line is that incumbent organisations that have established (or are in the process of establishing) an adaptive strategy and execution capability within their organisations are best placed to seize the opportunities that change offers in order to protect and grow its value.
Most importantly, this adaptive capability will ensure the organisation’s ongoing relevance in an increasingly fast moving and uncertain ecosystem.