Agility – why companies struggle to adapt to change

“…in this world, nothing can be said to be certain, except death and taxes.”

The famous quote by Benjamin Franklin has never been truer than today.

As political certainties are turned upside down and surprises come at us from all angles, organisations could add another rare certainty: CHANGE. And change is, err – changing.

Of course, business has always known that change is inevitable. But in the past, most of it happened over time.
Sure, events like evolving consumer demands, the arrival of new technologies or competitors caused businesses to change, but, even if companies didn’t prepare for them, they did (theoretically) have time to spot them.

For example, everyone knows that Kodak missed the boat on digital photography. But the reality is that Kodak was not caught out overnight – in fact, they had three good chances over a 25year period to get into the game.

The kind of change we are dealing with now doesn’t give you that much time.

Change has become faster – roughly following Moor’s Law. Think about it: 30 years ago, we didn’t have the smartphones that are now ubiquitous. 30 years before then, people didn’t have personal computers.

It’s not just technological change. Rapid shifts in attitudes, new social demographics and falling barriers to market entry are just some of the things that are threatening established organisations.

That means businesses must adapt faster- or perish.

But more importantly, it calls for a different way to generate this change. No longer is it good enough to discuss major (and minor) change at the annual strategy day, then set up steering groups that get progress updates at monthly 2hr committee meetings.

While I am all for good governance, this process is too slow to stay ahead of the change needs. And, crucially, it misses out on the dynamic creativity of the wider organisation that *could* be harnessed.

Instead of “doing” change or transformation, the most successful businesses build the ability to respond to threats and to pro-actively look for opportunities into the very DNA of their organisation.

It’s called business agility.

Def: In a business context, agility is the ability of an organisation to rapidly adapt to market and environmental changes in productive and cost-effective ways. (Wikipedia)

Agile businesses strike a balance between stability and flexibility. Agile organisations have structures and processes that are lithe enough to avoid change inertia while also preventing a decent change chaos. They exhibit greater flexibility, nimbleness and speed in the way they do things.

And the results are convincing:

  • companies with high agility grow revenue 37% faster and generate 30 % more profits
  • 70% of agile organisations score in the top quartile for organisational health and performance – compared to 23% of the other categories of organisation 

So why are too many businesses struggling to be more agile?  

The reason lies in the very nature of how established organisations perceive themselves and how they are structured and manage themselves.

The organisation as a machine.

The concept rooted in the Industrial Revolution is still the guiding metaphor for management in many businesses.

Structures and processes are designed to make sure that, like cogs in a machine, the different parts of an organisation work together efficiently. Centralised management holds all the information and therefore made decisions for the business as they are the ones with sufficient overview and insights. Sometimes parts need to be replaced, other times, initiatives provide the lubrication to make it run more smoothly.

And this approach made sense at the time. It was the time of building railroads and steam ships. The companies that constructed these were designed to coordinate the work of a largely uneducated workforce who performed repetitive tasks. These companies were built for stability and repeatability – doing the same thing day in, day out; over the years.

Modern businesses need more than repeatability

Fast forward a hundred years or so, and it’s clear why that approach to business management is no longer appropriate:

  • Modern businesses are full of educated, creative employees – most of them hired for the cognitive resources they bring.
  • Organisations in the 21st century operate in a dynamic, complex world where the landscape shifts rapidly and responses cannot be deferred.
  • The amount and complexity of information impacting businesses cannot be processed (even if it can be amassed) by just a few people at the top.
  • Hierarchy based decision-making creates bottlenecks, delays decision-making and overworks those at the top and while frustrating those further down.
  • For example, traditional reporting that is prepared weeks in advance of meetings are outdated by the time the decision is due.

Most importantly, the traditional machine concept means that organisations miss out on the collective insights and creative intelligence that their people could bring.  

Time for something different:

Building agility into your organisations requires a mindset shift as well as strategic leadership and commitment. A thoughtful auditing of current capacity for agility is a starting point. As is an insightful reflection on how your people at all levels perceive the organisation and how to shift this perception from the machine concept.

It highlights the need for pushing strategic thinking and shared responsibility across and down the organisation, creating leadership at all levels, no longer just defined by boxes on the organisation chart.

Building business agile capacity becomes a strategic imperative as the pace and disruptiveness of change continues to accelerate.

TAKING THE RISK OUT OF CHANGE

Uncategorized
We all know that creating real positive change in organisations is tricky. So tricky, in fact, that 70% of change projects fail outright to achieve their objective. That means 70% of all that time, effort and money you’ve spent were futile.

And your reputation?

Seven out of ten times you put it on the line only to get it back tarnished by poor outcomes. So it’s no surprise that McKinsey talks about senior executives’ “recoiling” at the mere mention of the word change management.*

Some organisations, however, are doing something clever. Instead of announcing big culture change programs or business transformations, they quietly and persistently experiment with ideas and changes. And they are getting are remarkable – both regarding learning and generating real sustained positive change.

Experiment, Play, Prototype.

Whatever you call it, the essence of this approach is to take a series of small, inexpensive steps that carry low risk to the business and your reputation. It allows you to learn and develop the changes needed in your organisation. It lets you explore ideas and the consequences of new processes, structures and decisions before realising them across the business.

In fact, the concept is nothing new:  we’re all familiar with the idea of prototypes in say, the car industry, or in product design terms. Manufacturing has benefited from using prototyping concepts for decades, and it has become the standard practice in all things software development.

Using it in a business change context: Whole businesses** are being built using the approach.
It is fundamental to the Lean Start Up movement, and Stanford design school has dedicated study courses to the subject.

Deceivingly simple, immensely effective

Just like in product design, change prototyping involves an in-depth understanding of those who are going to be impacted by or asked to make a change.

But instead of spending weeks and months on gathering data and getting stuck in analysis paralysis, prototyping moves to practical testing quickly, using basic mock-ups, walk-throughs, illustrations or even storytelling to test and evaluate ideas. Learnings from tests are incorporated into the next round of prototyping.

Pebbles in a Pond

The most useful prototype keep expanding in scope, sophistication and reach with each iteration. They include more and more people, thus promote buy-in and overcome the “not-invented-here-syndrome”. They come closer to the finished product (e.g. a new process) while retaining the flexibility to incorporate real-life challenges to assumptions even at a late stage***. And while initial prototypes will be limited in their testing reach, over time that scope is expanded until, hey presto, at some point the prototype is THE way thing are getting done around here.

It’s not a walk in the park

Though prototyping is a simple approach that can lead to uncommonly good results, that is not the same as saying change is easy or it will all be plain sailing. There will be objections, resistance, gaps that open even though you thought you were well past a particular issue. Sometimes the solutions will seem too simple for people to accept them as useful and sometimes issues will come out of nowhere, undermining the change efforts.

A practical alternative

While change prototyping won’t make change easy, it gives you a good chance to create change that is sustainable, fully tailored to your particular business’s situation, culture and circumstances and avoid the risks and costs of externally created, template “solutions”.

*Calling it business transformation doesn’t help, either.

** Think how Facebook or Zappos started, revolutionary healthcare firm Buurtzorg still has the approach at its heart which ensures it can maintain its amazing culture and vision, despite growing from 10 to 9,500 employees in 7years.

***This avoids the classic issue of traditional change management where reality does not conform with plans but because it is late in the day of the project, workarounds are invented to squeeze reality into the plan.

FED UP WITH THE NEGATIVITY?

The one simple thing to engage your employees

Here they come: your company’s annual Employee Survey results. 

Do you wonder how you did?

You open the report with trepidation. This is your people’s chance to tell you what they think – about their job, about the company, about you.

It all gets packaged into a neat little report entitled “Employee Engagement Score” or some similar title. And of course you know that the score is important: companies with a high score are more productive, have higher profits and attract more talent.

“Well”, you tell yourself, “last time wasn’t too bad.” Then you see the score…

You’ve probably heard the phrase “what gets measured gets managed.” But when you look at the numbers, you start to wonder: what else can you do to raise the score? Can it be improved?

You might think it would be impossible, but it’s not. You just have to start to from a different point.

Introducing a radical approach: stop measuring employee engagement.

For years, organisations have been collecting data from Employee surveys, 360º feedbacks, pulse checks and culture assessments.

Yet, after years of measuring, we still haven’t managed to improve engagement scores in any meaningful way.
The annual numbers move up and down a notch, yet the trends show that 65-85% of employees remain disengaged, and more than half say they are likely to leave their current job.

Seems that not everything that’s measured is managed (well).

So what is happening? 

Organisations insist that they want more employee engagement. It’s high on the list of priorities, they say. Maybe your boss says this too. And maybe you say it. And I am sure you honestly mean it.

I also bet you already cover the basics:

  • you have a clear Reward and Recognition policy
  • you pay within industry standards
  • you provide perks and have annual socials and the company Christmas party.

Maybe you are doing a lot more than this.  And these things are important.

But while you review your engagement strategies and look at the plans for the company barbeque in 6 months’ time, I want you to ask yourself one question.

How will these initiatives and activities grab the heart and soul of your people? Are any of them going to appeal on a deeply human level? Are they speaking to your people as individuals? As unique beings? As humans?

Step away from the jargon.

So here is the simple thing to improve your engagement scores:
Instead of talking about employee engagement and your company scores, get clear on what you are trying to do. Start asking yourself what do you actually mean by engagement. If your people were fully engaged, what would you see them do? Or not do? How would they behave? What would they say? What would someone visiting your office notice?

Pro-tip: start having a conversation with your people. Ask what being engaged means to them. This does not need to be a comprehensive scientific study, but an open conversation so you can test your assumptions around engagement.

To create genuine employee engagement you have to get down to specifics.

Getting down to specifics of what engagement means to you and your team clarifies what changes that are needed.

It allows you zoom in with laser precision on the areas where changes are needed, where you should focus your efforts.

It provides a platform to dive into two-way a conversation with your people – to start appealing to their hearts and souls. To truly engage them.

So when are you going to start having these conversations? Get your diary out and book a no-strings-attached strategy session – contact us on wecare@coincidencity.co.uk