Tag: Strategy

The Odyssey of Change: Anticipating the Four Hidden Forces of Organizational Transformation

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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.

How Do We Get Started? versus Where Do We Go?

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Consider your immediate reaction to two different ways of describing the activity of setting direction:

  • Defining a strategy
  • Choosing a way forward

If each of the above activities defined the purpose of two different meetings, which one would you rather attend?

To me, defining a strategy raises the stakes; it suggests that we seek an answer. Choosing a way forward acknowledges that there are many ways to go and our task is to pick one. A way forward can be abandoned in favor of another path without much fuss. An abandoned strategy feels like a failure.

As someone who has studied strategic thinking and facilitated my share of strategic planning exercises with organizational leaders, I want to go public with a recent heretical conclusion I’ve come to: Strategies are worthless.

To be clear, I’m not saying that formulating a strategy is a waste of time. Thinking together with other stakeholders whether on behalf of defining a strategy or as an exercise in taking stock helps build commitment and ownership. The mistake is presuming that the product describing the group’s conclusions matters as much or more than the process of reaching the conclusion. As Dwight D. Eisenhower famously said, “In preparing for battle I have always found that plans are useless, but planning is indispensable.”

Strategies in my experience suffer from a mythology that the daily activities of managers must conform to a set of strategic do’s and don’ts as if strategies were commandments rather than choices. At best, strategies inform investments of time and money. However, once the investment decisions have been made the organizational system and the marketplace react. Suddenly, the assumptions under which we defined our strategy no longer pertain. You can plan your next few moves in a game of Chess, but if your opponent responds in an unpredictable way, your strategy becomes useless. In today’s business environment unpredictable conditions are the only thing we can be sure of.

Essentially, strategies are marketing statements that most often put a positive spin on what you are already doing. Organizations don’t pause like an army before a battle waiting for a plan of attack. Everyday choices are being made that lead to outcomes that hopefully lead to better options. Your best bet is to develop a strategic question that will orient and focus the activities of the organization. A question that will inform what leaders pay attention to when making decisions and assessing outcomes.

Organizations and teams need a shared set of working hypotheses from which to choose a way forward; they don’t need (and almost never defer to) a strategy. Finding a way forward depends on asking thought-provoking questions before you get stuck. Here are four questions based on the Unstuck Minds Compass that can be applied in the flow of work rather than at some fictional starting point.

What is changing?

To ask, “What is changing?” is to zoom out and conduct Contextual Inquiry. In traditional strategic thinking terms, investigating what is changing is similar to conducting an environmental scan. Contextual Inquiry focuses the environmental scan on emerging trends and potential disruptions. By asking about contextual changes, we force ourselves to evaluate our assumptions. An adaptive organization does not wait for the strategy offsite to consider whether an emerging technology makes its product obsolete.

What do we take with us and what do we leave behind?

In light of what you discover about what is changing, use Critical Inquiry to zoom in and assess what will continue to work and what can be suspended. Consider what aspects of the current situation people find satisfying. Now consider the subset of the satisfying activities that contribute to your future customers’ future needs. Let go of the rest. 

Whose needs should we organize around?

In conjunction with Critical Inquiry, use Collaborative Inquiry to clearly define who benefits from what your organization produces and specifically how they benefit. Given what is changing, who are your future customers, clients or communities and what will be different about their needs in the future?

What question will define our path forward?

Note what is changing and compare it to what you’re currently doing and for whom. Now use Creative Inquiry to find the question that will reorient the organization’s attention.

By the way, if members of your organization, your board or your investors still insist on a clear statement of your strategy, you can always do what most organizations do. Retrospectively review what has worked so far and declare that you will do more of it and even better.