Leading Responsibly in Response to Change

 

Art Stewart
Managing Director, Strategic Impact Partners

A recovering economy always ushers in new, more complex dynamics as organizations pursue renewed growth opportunities. Various challenges ahead on the global landscape portend change on a scale we have not experienced before. Corporate responsibility practitioners will likely expand their influence with the C-suite as the necessity for perpetual change also demands increased vigilance over the differentiated values that are fundamental to brand equity.

This post is the first in a multi-part series on some fundamentals regarding leading change. It is edited from a White Paper I authored a few years ago and is offered as a retrospective on how some of our thinking about managing change may, or may not, have evolved.

“If anything is certain, it is that change is certain. The world we are planning for today will not exist in this form tomorrow.”
– Philip Crosby, Reflections on Quality (McGraw-Hill; 1995)

Change is the constant shared by all organizations. If you’re operating the way you did five or six years ago (or less), in all likelihood you are finding it increasingly difficult to achieve success as you have known it. The result, as so aptly put by R.D. Laing, author of The Politics of Experience (Random House, 1983) is that, “We live in a moment of history where change is so speeded up that we begin to see the present only when it is already disappearing.”

There have always been the anticipated challenges facing an organization – internal politics, competition, and pressures to lead into the future without sacrificing market share, profits, or the trust and confidence of stakeholders. But the world is a lot smaller today, and much more interdependent. So much so that unanticipated discontinuities can rapidly alter the current playing field in a way that organizations must respond quickly or risk losing key advantages and experience setbacks.

Economist Peter Drucker identified four major sources of discontinuity: Explosion of new technologies; globalization of the economy; the growth of pluralism; and the spread of knowledge. As corporate responsibility practitioners understand better than most, that list should now also include any breach in the trust and confidence of a full range of stakeholders.

With discontinuities now producing change that arrives like an unannounced visitor in the middle of the night, companies must adapt to an operating pattern of perpetual innovation. If they’re not careful, executive leaders can inadvertently induce havoc as they scramble to either catch up or cut losses – creating further setbacks. Forward-anticipating organizations, while not knowing exactly what changes are coming or when, do their best to prepare for an appropriate response that will lead to opportunity. Squeezing greater efficiencies from their current dealings will be balanced with having the ability to protect the organization’s competitive position. This is why C-suite leaders need the guardianship of the CR practitioner, who innately understands the criticality of maintaining vigilance on all behaviors related to trust, integrity, credibility, and reputational equity.

The Strategy of Change: Changing the Strategy

“To change and to change for the better are two different things.”
– German proverb

Ideas about how to best bring about change are evolving. Some of today’s thinking requires rewriting the manual on how to lead an organization in an age of discontinuities, while other concepts come from proven practices that have served the most respected organizations for decades. Those that have mastered change demonstrate the advantages of evolutionary vs. revolutionary processes to introduce, and manage, change as an opportunistic transformation.

Successful organizations refrain from the philosophy of “change for change’s sake.” The throwaway American consumer market puts tremendous pressure on leaders to constantly reassess a brand, sometimes with little regard for the heritage that grew the equity in the first place. However, certain circumstances such as a corporation’s need to shore up shareholder value or an institution that must address scandal, may indeed require drastic action.

Radical changes (or any change for that matter) that pay little heed to the organization culture and values, overlook the best interests of constituents, and engage in an ill-conceived or poorly communicated vision, are usually traumatic and disruptive to the entire entity. Instead of creating a new dynamic for achieving goals and objectives, excessive change tends to create chaos, cynicism, distrust, and burnout. This is not to suggest that new leaders must relinquish their latitude to run the operation as he or she sees fit. However, according to Columbia Business School Professor Eric Abrahamson (“Change Without Pain”; Harvard Business Review, July/August 2000): “To change successfully, companies should stop changing all the time. Oscillation between big changes and small changes helps ensure dynamic stability in organizations. More critically, it paves the way for change that succeeds.”

Organizations usually change primarily in two ways: through drastic action or evolutionary adaptation. Drastic action is, by nature, discontinuous. It is often forced or imposed in response to disruptions (innovations by others), a lack of resources, or shifts in the competitive context from regulation, legalities, cultural or political dynamics. Evolutionary adaptation is more pliable, often incremental, more evenly distributed, and less disruptive.

Looking back over the reign of Jack Welch at General Electric, his holistic transformation of the corporation may appear to have favored upheaval. But Welch saw his strategy for change as the “evolution of a central idea through continually changing circumstances” (“Straight from the Brain”; Strategy + Business, 2002).

This approach has been described as dynamic stability – where the focus on strategy is less about what is done than what is lived. It interprets change as a strategy of semi-continuous transformation, not just anticipating the next event but evolving to a state of continual readiness to transform. By stressing the desired outcomes or key objectives, change becomes an embedded discipline of mobilization that drives the enterprise to new strategic positions.

While pursuing change through dynamic stability is more difficult than coming up with the ‘big’ change, it does entail far less pain and disruption to the organization. Eric Abrahamson describes it as being part art and part science, and suggests four operating guidelines to achieve it:

Reward Shameless Borrowing: “Noodle with what already exists, inventing from scratch only as a last resort. Words like ‘copycat’ and ‘impersonator’ should be compliments, not insults.”

Appoint a Chief Memory Officer: “Only by remembering the past as we tinker and kludge can we avoid making the same old mistakes – and take advantage of valuable opportunities.”

Tinker and Kludge Internally First: “Dynamic stability is much easier to manage if you stay inside the organization… an organization has greater difficulty reconfiguring imported parts.”

Hire Generalists: “Their range of skills lets them combine disparate ideas, techniques, processes and cultures. In other words, they can tinker and kludge.”
 

Posted May 15, 2014 in CR Blog