Homer’s epic poem, The Odyssey, tells the story of Odysseus’ journey home after the fall of Troy. Odysseus and his crew spent ten years at sea. Some of their encounters along the way were fortuitous, others were fatal.
While organizational transformation is less perilous, it can feel just as daunting. It is unrealistic and possibly counterproductive to expect smooth sailing if the goal is to undergo a transformation. By paying attention to four hidden forces of organizational transformation You can, however, improve your chances of a successful journey.
To remember the four forces, we use the acronym SCAN, which stands for Structures, Context, Assumptions, and Needs.
Keep an eye out for entrenched STRUCTURES
I worked for a restaurant chain that was looking to improve its customer service. Because the company did a lot of delivery and take-out business, the main customer interactions occurred during the phone call to place an order (this was in the 1990s, before online ordering).
After the training programs and updated processes failed to improve service ratings, we decided to investigate. We discovered that restaurant managers were instructing their team members to ignore the phone if the restaurant was getting overwhelmed with orders.
The managers received bonuses for getting food out quickly. The point-of-sale system tracked how long it took from an order being placed until the order was plated or packaged. If too many orders came in, things backed up in the kitchen, and the managers’ bonuses suffered. If you don’t want orders backing up, don’t answer the phone.
Before initiating an organizational transformation, spend some time identifying systems, habits, and routines which will preserve status quo priorities and behaviors.
Pay attention to CONTEXT
On paper organizational transformation provides an illusion of control. Leaders imagine that clear goals and a well-designed plan will create the reality they envision. In the same way that weather matters to the success of an outdoor wedding, an organization’s business context matters to a change effort. The best laid plans are still subject to unpredictable and uncontrollable conditions.
Given the relentless headlines about the lingering impacts of the pandemic, disruptive technological innovation, and deteriorating trust in institutions and governments, context has become hard to ignore. Still, you may want to give some thought to contextual factors closer to your organization’s operating environment. If it’s outside your control and could have an influence on the success of your transformation efforts, it’s worth your attention.
Consider, for example, the potent combination of social trends and demographics. Baby boomer executives are retiring. Millennial and Gen Z workers are less interested in staying put and moving up the corporate ladder to fill the vacancies. HR leaders would be well-served by keeping these generational shifts in mind as they develop new talent strategies.
As you think about transforming the business, how will you keep an eye out for changing environmental factors that might become sources of both opportunities and threats?
Challenge out-of-date ASSUMPTIONS
After decades of decline, the Eastman Kodak company filed for bankruptcy in 2012. In 1976, Kodak had an 80% market share in camera sales and a 90% market share in film and film processing. It would be tempting to conclude that the company failed to notice the emergence of digital photography.
Kodak knew about digital photography. In 1975, it was a Kodak engineer who invented the digital camera. People unfamiliar with the company’s history are surprised to learn that The Eastman Kodak company held the first patent for digital cameras.
Kodak executives couldn’t recognize the significance of their changing context because they were blinded by their assumptions about the business. Digital imagery wasn’t simply a novel version of photography, it redefined the way people share the stories of their lives.
In the 1990’s IBM’s bread and butter, the mainframe computer, was being threatened by the rise of personal computers and the introduction of the client-server model. In 1992, IBM posted a $8.1 billion loss. In 1993, IBM brought on a new CEO, Louis V. Gerstner Jr., to return the company to profitability.
Lou Gerstner was able to challenge assumptions about IBM’s business in a way that the Kodak executive team could not. Gerstner was not blinded by an emotional attachment to IBM’s business model, products, or culture.
Before you transform the business, undertake a clear-eyed assessment of the deeply held assumptions being challenged by your vision of the future. How will you help people adapt?
Prioritize people’s NEEDS
In 1985, Coca-Cola introduced a new formula for its flagship soda, which was widely known as “New Coke.” The company spent $4 million on market research and taste tests, which suggested that consumers preferred the taste of New Coke over the original formula.
However, the introduction of New Coke was met with widespread backlash from consumers, who had a strong emotional attachment to the original formula. The company was unprepared for the negative reaction, and sales plummeted. The company received thousands of letters and calls from angry customers, and some even boycotted the brand.
Needs are manifestations of emotions. Leaders often underestimate the role of emotion in the success of an organizational transformation. Understanding needs requires empathy, not survey data.
Think about the people who matter most to the success of your transformation. What matters to them? Think about the people who are most often excluded from the conversations about an organizational transformation, what can you learn from their lived experience that would never have occurred to you?
Any significant organizational transformation with bump up against fixed structures, unpredictable context, embedded assumptions, and unmet needs. Conducting a periodic SCAN will help leaders navigate the uncharted waters during the voyage from current realities to a desired future.
Jay G. Cone is the author of The Surprising Power of Not Knowing What to Do; Discovering Creativity and Compassion in a Time of Chaos. He is the co-founder of Unstuck Minds.