Five key insights for finance professionals into creating profound, transformational change, quickly and easily. Sounds impossible? Then check out these concepts for a more constructive and robust alternative to change
Let´s get started.
Insight 1. Change is not a journey - it is "constant flipping"
The most widely used metaphors of change are related to that of a journey from the current state (often labeled ‘status quo’) to the desired state (a.k.a. ‘vision’). The desired state, in this metaphor, is seen as a place out there in the future. Or a north star - never quite to be reached. We tend to believe change-as-a-journey has to be long and arduous. That it is hard and dangerous. Consequently, armed with delusional maps, project plans, or blueprints, we embark on what we imagine will be a long and difficult journey. We start to foresee all sorts of obstacles - that don’t actually exist, as we will see later in this article. But we find ourselves believing the milestones we invented are real, and get anxious when they don’t appear on the horizon.
This approach misrepresents change as a "controllable process" composed of a sequence of discrete stages, phases or steps; and it deludes us into thinking we have to make a map for getting from the current state of affairs to the desired state. So this approach also trivializes change. We call this approach Planned Change. This is what we commonly think change management is all about: planning and controlling the change journey. The journey metaphor tricks us into ignoring the possibility that the desired change might be accomplished quickly, with little effort, right now, with existing resources and with minimal disruption. The metaphor itself makes change hard.
"Profound transformation never takes more than 2 years - independent if it´s about an organization with 20 people, or 200.000."
Now, spill a tiny bit of milk into coffee, and with this tiny nudge a new pattern is instantly being created. It’s altogether different from the original one, pure coffee, and the change is permanent. there’s no way of returning to the first pattern. This is much more similar to what change actually is than calling change a journey.
"Change is like adding milk to coffee."
This is a more helpful metaphor than the wide-spread notion of seeing change as a "journey from here to there". It means to see change as a something of a flip from Now (the current state) to New (the desired state). What is important: Both Now and New are in the present, not in the future. The New can be produced right here, right now. Profound change, different than problem-solving, requires a sequence of flips. Or many flips.
"Profound change means sequenced flipping the system from Now to New - right here, right now. A thousand times or more."
Insight 2. There is no such thing as Resistance to Change -
only smart response to dumb method
The man who invented Resistance in Change is Kurt Lewin, one of my heroes. Lewin, the brilliant founder of social psychology and of organizational change as such, introduced the term resistance as a systems concept: as a force affecting managers and employees equally. Unfortunately, only the terminology, but not the context, was popularized. We now cast resistance as a psychological, individualized issue, personalizing it as "employees versus managers".
In this mental model, it´s always the others. Employees "resist", top management "isn´t committed". We judge others saying things like: "They have an interest in preserving the status quo.“ The They is very important, of course. The resistance assumption is implicitly arrogant. As long as we accept this mental model, it confuses our understanding of change dynamics, perpetuates the status quo and command-and-control organization. It´s better to let go of the term and embrace more helpful mental models for change.
So let´s give it a try:
"People don´t resist change."
Can you say that to yourself, in your head? Now that´s a start. But what is behind the behavior, then, that we are observing all the time, in change efforts, if it is not resistance to change? Take a step back and you will see that people act consciously and intelligently (overall), to other things than the change itself. They may resist loss of status and power - which is quite intelligent. They may resist injustice, stupidity and being changed. Which is also intelligent. The change may also cause need for
"The more resistance to change you observe, the likelier it is that your methods suck."
Instead of watching out for the possibility of resistance, we should watch out for common mistakes in implementing change and deal with the perfectly natural reactions to (our) poor interventions.
Let me be clear: The notion that people resist change is not held up by social sciences. It is actually completely opposed to our scientific knowledge about human capability to change (Alan Deutschman wrote a wonderful, summarizing book about this). But It is a fairy-tale that people resist change. There are symptoms of struggle with adaption and the new that should not be confused with resistance to the change itself. Once you start with kind of projection, the trouble really starts. We generally tend to have a hard time imagining future possibilities, though. This is why any change effort will have to deal with the need for imaginization, or visioning.
Insight 3. The problem is in the system - almost always
If resistance does not come from people, then where does it reside? Resistance is much more likely to be found elsewhere. Edwards W. Deming said: “94% of the problems in business are system-driven and only 6% are people-driven.” Which means: If the problem is in the system, almost always, then change should mostly be about working the system.
Removing obstacles in the system to promote profound change is clearly easier than introducing entirely new features, rituals or memes within a system. This is what makes organizational hygiene such a compelling idea. But whether you are removing something, or introducing something new while flipping from Now to New: Making changes effectively in organizations requires specific, targeted action - not blaming. Which means: If the anticipated change will result in the loss of status by some employees, then we must develop strategies for dealing with the loss of status. Likewise, if the change will result in the loss of jobs, that issue must be dealt with. If the change will result in the need for learning, then let´s take care of that. If the change will come at a cost, then there should be space for emotions and mourning. Labeling these difficult, real-life problems as resistance to change only impedes the change effort. Resistance then becomes a self-fulfilling prophecy. Put differently:
"Change done well does not produce losers. Only consequences."
Power interests are also very real and often ignored by change „agents“. And they shouldn´t. John Kotter, another one of my heroes, stated that individual resistance out of self-interest exists, but that it is "rare“. More often, he said, the obstacle is in the organization’s structure or in a “performance appraisal system [that] makes people choose between the new vision and their own self-interest”. In other words:
"What we interpret as resistance to change is an intelligent response to inconsistencies between the organizational model and the desired state."
Change in this sense is successive re-negotiation of the organizational model - not revolution! Kotter´s NoNo has good reasons to oppose the change - reasons that are probably triggered by the current system, not the individual´s twisted psyche. Again: What we observe should ultimately be coined lack of consequence, not resitance to change.
Which all leads us back to the conclusion: In change-as-constant-flipping, we must work the system, not the people. Diverting from this path leads to blaming, and almost inevitable to self-induced failure of our change efforts.
Insight 4. Org change is socially dense - the technical side is (almost) trivial
The idea of Emergent Change, or continuous flipping from Now to New acknowledges that change happens within complex pattern that cannot be predicted or controlled - but only observed. One of the first to describe this kind of thinking on change coherently was John Kotter. His Leading Change approach neatly outlined profound change as dense, social movement: The collective, emergent side of change, so to say.
The element that was still be missing from this change approach is the individual side of change - the need for individual adaptation that members of an organization have to undergo to flip or when flipping. Adding the individual side of org change to the collective side, one starts perceiving change as two-dimensional. We call this the double helix nature of change.
Many change agents are enamored with their method of choice. Many of us like to believe that this method or tool is wonderful, effective and impactful. Change as flipping, however, is based on the assumption that
"Relationship is everything, method is secondary"
There are many decent or effective methods, but what really matters is creating different relationships within the system, and relationships of higher quality. Many methods can help doing that. In fact, the more complex the problem is, the more complex, or social, the method must be. Nothing is worse than crystallized method - or "dead" method, applied to living problems.
"Method must always be appropriately complex, and social."
We will explore this aspect of change and complexity-robust method in future articles.
Insight 5. The is no such thing as transformation - instead, everything´s an intervention
I am guilty. I am guilty of talking about transformation myself. A lot. And I like it! I like to say things like: Organizations should transform from the organizational model of the industrial age ("Alpha") to a contemporary, complexity-robust one ("Beta"). I keep saying that kind of thing, even though I know the term transformation is neither helpful, nor accurate. I just can´t help it!
The truth is probably closer to: There is no transformation.
"Constant flipping is the only thing there is in change."
This is consistent with the old adage "Everything is an intervention." Which is one of the most beautiful things that has ever been said about change (which probably is not a very good term, either). That everything is an intervention does not mean, of course, that every intervention is good in itself. It just means that everything, really everything, influences, or potentially flips an organization.
Instead of change management, we should practice the craft of change as exercising constructive irritation - as we like to say in systems theory. According to systems theory, the only thing you can do is to irritate a system. Then observe the consequences and ripple effects. Then irritate again. Then observe. And so on. Any irritation can flip the system into the New state. If you are lucky and if the irritation was smart enough, the state is a form of desired state.
In any case: irritate again. This is never supposed to be over. It´s not a journey, remember? Welcome to the world of, well, eternal flipping.