THE CHANGE PROCESS

THE ROAD TO RENEWAL

The first step in restoring a company’s lost vitality is avoiding the false choice between evolution and revolution

Organisations age.   As they mature, habits of thinking and doing that once served them well become sacrosanct.   They harden into custom, into tradition, whose existence is accepted and value unquestioned.   Form triumphs over substance.   Means become ends.   Layer upon layer of revisions encase processes that used to be simple and responsive.   Procedures grow labyrinthine.   Things no longer work.   People often feel a sense of malaise, but no real urgency to do anything about it.

We have all lived with the consequences.   Out-dated assumptions constrict our view of the world and permit only those courses of action that fall well within the comfortable boundaries of institutional acceptability.   Noble purpose fades.   Core values, eroded by cynicism and obscured by expedience, are ultimately discarded as the hollow slogans of an era gone by.   Lacking a clear sense of purpose, well-intended people work at cross-purposes, wasting precious energy.   Good people are the first ones to drift away in frustration and disappointment.   Slowly but surely, vitality and, with it, competitiveness, dies.

Even when managers recognise the symptoms of aging, they find them hard to reverse.   As John W.Gardner, a much respected Stanford professor who served six U.S. Presidents in various leadership capacities, has observed:-

“I once believed that it might be possible to design an ever-renewing organisation, one that would never run down, never lose its vitality.   It would provide for dissent, it would institutionalise the devil’s advocate, it would provide the seedbeds for new ideas and solutions.   It would never cease learning and developing.   But after many years, I concluded that human beings are much too firmly wedded to the status quo to let anyone get away with such a scheme.   They will discount the devil’s advocate.   They will silence the dissenter by outright punishment, or more commonly through blandishments of good fellowship.   They will root out the seedbeds.”

Evolution of Revolution

The challenge, then, is formidable.   Still it must be faced – time and again, by all but terminally ill companies.   But if the renewal process beings with a determination to restore lost vitality and competitiveness, it has no end.   Aging is relentless, remorseless.   So, too, must be the efforts to rejuvenate and rebuild.   Most executives understand this.   They accept the challenge.

Their doubts and hesitations usually take a different form.   How, they often ask me can I – how do I – make a quantum leap in my organisation’s performance that will restore vitality, close all major competitive gaps, and at least maintain parity going forward?   Should I aspire to do this through a one-time, step-change programme, or should I be satisfied with a series of incremental improvements spaced out over many years?   In other words, does renewal happen by revolution or evolution?

Current opinion is divided.   Some executives preach the virtues of evolutionary change toward an evergreen, self-regenerating organisation – one based almost entirely on a host of self-directed, committed, frontlining teams, fully empowered and fully engaged in problem solving, learning, and continuous improvement in the context of an essentially boundary-less, hierarchy-free organisation.

Others have trouble reconciling this seductive vision with their own managerial upbringing.   In their experience, planning and budgeting are powerful tools to achieve predetermined results.

In strategy, there is such a thing as the right answer, if only you subject the facts to sufficiently rigorous analysis.   Power does flow from structure and hierarchy – so much so, in fact, that a meaningful change in power can be accomplished only through personnel and/or structural changes.   Sustained improvements in performance do come from a series of well-planned, decisively-executive, one-off adjustments – a shift in product market strategy, say, or a re-organisation of the Marketing Department or a re-design of the performance tracking system.

Executives of both persuasions have tried to lead their organisations to renewal, and executives of both persuasions have failed to produce the kind of results they needed.   Those taking the evolutionary route to an ever-renewing organisation have often run afoul of the massive inertia inherent in established work practices and cultures.   After an enthusiastic start, the clutter of activities soon consumes much of people’s energy with little to show by way of results.   Worse still, some of these programmes run up against a credibility- destroying collapse in financial or competitive position.

Corporate ‘wellness” programmes that get caught mid-stride by life-threatening diseases requiring instant – and brutal – surgery, do not provide the kind of climate in which renewal efforts can thrive.

Executives attempting the decisive, even revolutionary, “step-function” changes often do not fare any better.   Their thrusts in downsizing, restructuring, repositioning and the like, do little to overcome old habits of thinking and doing or entrenched power plays.   Soon, improvement peters out.   Business-as-usual reigns again.

Lessons of Experience

The question, then, as framed, is incorrect.   The choice is not between evolution and revolution.   Neither by itself is enough.   Neither by itself will suffice.   Both are necessary.   Such, at least, has been the experience to date of the companies that have had the greatest success at self-renewal: they have found effective ways to marry the two.   Embedded in their experience are several important lessons.

Renewal can have a priority claim on management attention even when there has been no hardening of the organisation arteries – for example, when there has been an active attempt to create a different future through merger, acquisition, or restructuring.   In such cases, the renewal opportunity exists above and beyond the standard challenge of choosing between the people, procedures, and policies of the predecessor organisations.

To be sure, the merged or restructured company must move quickly to put together something that will work, at least in the immediate term.   But for the new organisation to truly reach its potential, it must establish anew, even if temporary, sense of purpose around which people can rally – in other words, a shared understanding of why we are here, what we are aiming at, and what success will look like.   This does not have to be a major strategic vision.   “To settle down our customers and employees over the next 60 days” will do nicely.

This kind of common purpose catalyses the work of resetting expectations, redefining standards of excellence, and developing new approaches.   Its regenerative nature helps people look beyond the trauma of the merger toward a better future, thus focusing energies that would otherwise have dissipated in unproductive wallowing.

Wise leaders of renewal do not approach the challenge with a highly planned set of fixed ideas that they try to impose on events.   Nor do they concentrate all their energies either on revolutionary jumps or on evolutionary moves.  By working carefully on both in tandem, they sharpen their sense of all the opportunities to come and their perception of the ways in which events relate to one another.   Wise leaders act with their minds open and their sights sets on how things ebb and flow.   Bob Waterman calls it “informed opportunism”, others call it “staying loose in the saddle”.   Either way, it helps prevent being thrown off by surprise questions.