“In life, change is inevitable, in business, change is vital.”
So says Warren G. Bennis, an American scholar, organisational consultant, and author.
We’re certain that most, if not all, business people would agree with him. However, the sheer pace of change continues to accelerate. How can leaders help organisations to thrive in a constantly changing environment?
Two Types of Organisational Change
A new technology emerges. New legislation is passed. A new competitor surfaces—or a former competitor leaves the market or goes out of business. Each of these types of changes is sudden and generally unexpected. Sudden changes require people to respond in new ways—ways they may not have anticipated.
Other types of changes are more incremental or process-based, and may be more within one’s control. For instance, a process within a department or division needs to be redesigned, or a new team member is joining the team. In each of these cases, there is prior notice of the change allowing all those involved some time to think about and plan their responses.
Let’s take a look at five ways leaders can help to effectively manage these two broad categories of change.
Scan the Environment
As management continues to face pressures to turn a profit, quarter after quarter, and year after year, leaders have increasingly been focused on more short- than longer-term goals. This is unfortunate because in many cases, leaders tend to focus on exploiting whatever current resources they have while discounting the future. Consequently, they are less prepared for unexpected changes that are likely to occur.
Continually scanning the environment to understand current, and potential, impacts on the company and industry it’s in, and the movement among competitors, can help leaders anticipate and prepare their organisations for potential changes.
Turn Data Into Insights
Your environmental scanning activities will arm you with a great deal of data. Sometimes so much data that it may be overwhelming and difficult to turn into action. Leaders who are able to turn data into actionable insights will be able to make predictions for how the present will be impacted by the future. Those insights can lead to significant innovations and business success.
Consider Steve Jobs, for instance. In 1996, Jobs predicted that commerce was going to be killer on the web. He was right. Jeff Bezos, the founder of Amazon was paying attention to Jobs’ predictions and taking action based on the insights gleaned. In 2015, Amazon did $105 billion in net sales; today, even large retail chains like Walmart are struggling to keep up.
That’s turning data into insights.
Balance Strategy and Culture
As we wrote in a blog post in 2014, culture can be defined as an aggregation of the mindset and beliefs of an organisation’s employees. It’s the manifestation of the principles, vision, and mission that bind an organisation’s people together.
However, as you’ve likely experienced in your own career, culture can mean different things to different people within an organisation. This means that any organisational change is likely to be felt, and reacted to, differently by different employee groups. Consequently, the cultural component of change needs to be managed very carefully. If not, the ramifications can be severe.
The best examples of how culture can impact organisational success can be seen during merger and acquisition activities, as two or more companies come together to form one. The DaimlerChrysler merger failure is one example of this.
One of the main hurdles for this merger was the difference in communication styles between Chrysler, an American firm, and Daimler-Benz, a German firm. As Michael Gates points out in a blog post covering the DaimlerChrysler merger case study, Americans tend to evince optimism and put forward best-case scenarios. Germans, on the other hand, tend to be more comfortable with exercising caution and have a somewhat pessimistic view that focuses more on worst-case scenarios. They proactively seek a lot of background information before approaching any important decision. The “let’s-get-on-with-it” approach that Americans are more likely to take can increase Germans’ need for caution and can cause friction.
Aligning a company’s strategy execution with culture reduces the disruptive nature of a change. Leaders need to ensure that culture and strategy work in collaboration for success, but in a balanced and efficient manner.
Beware of Illicit Emotions
Unconscious, or illicit, emotions are often a result of our past experiences, which impact the way we think about things. To lead effectively, leaders must understand both their own, and others’, emotions. Training can help. INSEAD’s Executive Master in Change, for instance, helps leaders learn how to regulate their own emotions as well as to accurately interpret others’ emotions. This is particularly helpful during tense discussions, confrontations or conflicts. The ability to see emotions as information, rather than a personal attack, can help boost understanding and lead to better outcomes.
Use Organisational Politics in a Positive Way
Organisational politics refers to a variety of activities associated with the use of tactics to influence or improve personal or organisational interests, as we discussed in a 2017 blog post. Understanding the political terrain can help fight dysfunctional politics and reframe them as a natural, useful tool necessary to lead change positively.
For example, leveraging political connections internally to fulfil a personal agenda, is generally a negative use of politics. On the other hand, a coalition of employees who leverage their internal political connections to bring about a change that positively impacts a customer group would be an example of using politics in a positive way. The difference is a focus that is driven toward personal, versus organisational impact.
It’s trite but true. Change is a constant. The pace of change is rapidly increasing and is likely to continue to do so for the foreseeable future. Organisational leaders are in a pivotal position to help their organisations, and all of the people within them, to navigate change both when it is sudden and when it can be predicted.