As We Enter the "Next Normal" in a Disruptive Environment, Will you Master Change or will Change Master You?
By Quang Le
CEO & Certified Change Strategist, Le Transformations
As leaders, we crave and strive for stability because it yields efficiency and productivity. Naturally, we avoid change because it introduces variability that can't be controlled, managed, or easily predicted. It is well-documented that change breeds uncertainty, fear, and stress. Further, neuroscience tells us that stress triggers our fight/flight response, compromising our productivity and efficiency -- never a good combination when leading teams and organizations.
While change isn't necessarily new to leaders or organizations, disruptive change -- the kind that seemingly appears out of nowhere -- can be particularly daunting for the best leaders and efficient organizations. Disruptive change has vexed corporations for the last two decades.
Remember Blockbuster? Few people know that Blockbuster pioneered video on-demand service (aka video streaming). Their studies and research indicated a healthy consumer appetite and available technology for creating a video on-demand service; despite this, Blockbuster chose to ignore opportunities for change. Instead, they decided to continue chasing stability: looking for productivity and efficiency gains while ignoring change opportunities by continuing to build newer stores across the globe, increase their video selections, and resolutely charging late video rental fees. When disruptive competitor Netflix appeared on the scene waiving all late fees, allowing consumers to return videos by mail whenever they wanted, providing video selections via a website, and offering video-on-demand service, consumers abandoned Blockbuster. Netflix was the welcomed change consumers wanted. So much so that by 2010, Blockbuster, the 25-year-old video rental business veteran, the once multi-billion-dollar company with over 9,000 stores worldwide, shuttered its doors for good and filed for bankruptcy.
Blockbuster's change story is just one example of how organizations experience disruptive change. Other global change stories, such as Uber's impact on the taxi industry or how electric vehicles have shaped the automotive industry, serve as a warning beacon for intransigent organizations. Disruptive change comes when new technology, a better service, a re-imagining of what is possible, response to consumer awareness, and a satisfying user experience leads to a transformation of "how things were done" into "how things are done now." Without realizing it, our use of the new offerings, technologies, or services contributes to an industry's or company's demise. This is why disruptive change is so vexing for companies.
The success and stability of the past may no longer hold, leaving inflexible organizations "by way of Blockbuster."
In the past few years, disruptive forces have been especially pronounced during this "Fourth Industrial Revolution" (4IR) with the acceleration of digital transformation, automation, artificial intelligence, and the global use of mobile internet-connected devices.
Of course, the proliferation of technological advancements and access to data has in many ways been a boon—but if we don't carefully understand and leverage disruptive change in a chaotic climate, the results can be devastating.
Blockbuster's video barcode tracking system was considered innovative for the 1980s to track video rentals and charge late fees; however, by the 2000s, their inability to implement a change strategy to embrace the technological landscape came far too late and ultimately led to their downfall.
Today, in this warp-speed cyber-world, we are living through multiple disruptions in the 4IR across a wide spectrum of industries simultaneously. Throw on top of this warp speed a pandemic, and navigating change gets really complicated. Disruption isn't just coming from competitors; today, it comes from anywhere and everywhere, all at once. Finding a new way of approaching change is the new way of life.
The "Next Normal"
Welcome to the next normal as we confront the lingering effects of the ubiquitous pandemic. Yes, the widespread use of COVID-19 vaccines should have a healing effect, but the corporate landscape will never be the same.
Pragmatically, leaders need to push ahead to ensure a workplace that protects the safety and well-being of staff and visitors who will slowly return to the office or the factory; this may involve changes in systems and designs that address protocols such as workforce distancing. Additionally, since many office employees have proven they don't need to occupy expensive office space or suffer through horrible commutes, they simply won't, thus enabling many CFOs to determine that they can stop paying leases re-deploy that capital elsewhere. Therefore, in the "next normal," organizations must accommodate a blend of staff, some of whom will continue remote work while others will return to the office part-time or only for large group meetings. In balancing these changing workforce dynamics, leaders must weigh the studies that point to corporate savings and increased productivity with a virtual business model, as well as other reports about the adverse effects of workplace separation along with increased family anxiety at home.
Indeed, COVID-related matters are also tied to much larger macro issues such as ongoing physical and mental health issues, social isolation, political polarization, economic inequality, racism, xenophobia, global outsourcing, sexual harassment, and generational discord.
Taken in its totality, this confluence of crises has created a perfect storm that has sent worldwide ripple effects not only through the workplace but also through the marketplace.
Navigating a New Frontier of Change Leadership™
In this time of turbulence, we are searching for a sense of calm to help us stay afloat. But we need leaders who will be the catalysts to chart the new course. Of utmost importance, we need executives who will engage workers in navigating the way toward business transformation—this is the essential element in a new iteration of change management. This is, in fact, a new frontier that we call Change Leadership ™.
Organizations are increasingly acknowledging that they need to mitigate the risks that threaten their operations; they need to overcome their fears and act responsibly but quickly. Yet, with so much at stake and so many decisions, they typically don't know how to begin the transformation.
The steps toward transformation will vary with every organization, with no "one size fits all" solution. Various routes toward transformation include:
In-house. One route is to plan for changes in-house, typically with the help of internal change professionals. The drawback here is that internal people rarely have the specialized skills required to deal with today's vagaries and complexities that require both breadth and depth of salient disruptive change issues and change strategy.
Large Management consulting firms. The large consulting firms have much intellectual capital. But they usually don't provide senior-level, personalized attention; if they do, it is extremely limited since their consulting model isn't designed for this. Instead, it is intended to provide limited time with subject matter experts; and maximum time with an army of less experienced consultants for the duration of your engagement. Their services come at a substantial price tag.
Change management firms. These consultants offer a more narrow approach — they generally tout an off-the-shelf formula, and they may not accent Change Leadership ™ with staff engagement. Their model emphasizes a "one size fits all." The reality is that all organizations, even organizations in the same industry, approach leadership, work, and culture in different ways.
Change Leadership ™ firms like Le Transformations is an example of a new breed of consulting firms that help leaders work with staff to manage change objectively, holistically, and cost-effectively.
Specialized firms like this should also have a contemporary breed of change consultant leading the interventions with their clients — a CEO who has expertise in information technology, organizational strategy & effectiveness, enterprise change initiatives, executive coaching, team coaching, and applied human psychology.
Whether you go the in-house route or partner with a consultancy, you need to perform due diligence to optimize your success. Here are questions to ask and factors to consider with regard to your Change Strategy:
Strategy & Culture:
How will you drill deep and be strategic in getting to the source of your problems?
How, overall, will you respond to volatility, uncertainty, complexity, and ambiguity with regard to disruptive change?
Which elements of your organizational culture will you bolster, and which will you side-line?
How will you measure the ROI in your culture change strategy?
How will you know if your leaders are too entrenched in maintaining the status quo?
How will you equip senior leaders to respond to disruptive change and provide ongoing support?
How will leaders address the varied needs of multi-cultures and multi-generations, including Gen-Z, Millennials, and Baby Boomers in the workplace, recognizing different skill-sets and anxieties?
How will you create a nimble organization that can respond to real-time data and pivot as circumstances dictate?
How will management work with staff to collaborate and innovate across the enterprise?
How will the organization know when to seize opportunities to be proactive and leverage the upside of change?
These are heady questions that merit considered counsel.
Viewed through this lens, firms experienced in the Change Strategy and Change Leadership™ space may offer distinct advantages. Le Transformations (LETS) has created a Roadmap to Transformation that we present in an infographic with the acronym "ASSET" -- Analyze. Strategize. Start. Engage. Transform.
Technology Meets Humanity
Technology underpins all industrial revolutions, and it is easy to be lured into thinking that technology will solve all challenges. After all, much of the successes are due to technological improvements and advancements in science. Traditional change management certainly involves strategic thinking regarding technology and processes. But that's not enough to sustain long-term transformation. The missing ingredient is people who will embrace the plan and be part of the solution. Ultimately, change is about benefiting people. In the 4IR, those leaders and organizations that factor in humanistic approaches and factors will leapfrog ahead of their competitors. And it is not sufficient to plan for the impact on people. Rather, we need to think about how we enable people to be active contributors to this new future.
As mentioned earlier, central to our philosophy at LETS is the critical role that leaders play in engaging staff. We work with leaders to help them leverage Change Leadership ™ to engage their entire staff, employ a Change Strategy that includes all workers who drive production and are on the front-lines, and staff in support areas, sales, infrastructure, etc. Leaders must solicit their feedback and input, earn their buy-in, and begin to build an agile, learning organization based on trust. In this light, communication, and education, through workshops, videoconferences, virtual collaboration, webinars, etc., are critical.
This process generally includes identifying and nurturing a network of formal and informal influencers. These people will be involved to inform, engage, and support the organization. In this manner, by turning would-be critics into advocates, you move away from in-fighting and toward consensus-building or collaboration. The result is a more motivated, united, and productive organization. In our experience, in working toward a common goal and promoting the greater good, workers will likely be excited about the process when they are invested in the change effort.
Culture is Key to the Equation
To realize digital transformation, it is necessary to orchestrate cultural change. Addressing an organization's culture starts with looking at where they are now and where they need to be… and what new mindset, skills, and tools are necessary to promote progress.
Which factors of your culture are facilitators, and which are detractors? Answers to these questions should come through a collaborative approach between the client and the consultants, who will illuminate blind spots and provide an outside, non-biased perspective. The answer will undoubtedly reveal those core tenets of your culture are great and need to be emphasized while uncovering that there are aspects that just don't help you move forward and adapt to the next normal. Referring back to the triangle of technology, processes, and people, it is important to note that these three forces work together in driving culture change. To visualize this dynamic, LETS has developed an Agile Leadership Transformation model.
Culture change is difficult and seldom do leaders want to go down this road, thinking that too much emphasis is placed on culture and not the bottom-line. In reality, successful leaders who have to lead their organizations through the chaotic, turbulent waters know that you can't ever over-invest in tackling elements of culture head-on.
A final note about effecting cultural change is that it is imperative to focus on and optimize resources. To guide organizations so that this will materialize, LETS utilizes the Pareto Principle, which states that 20% of effort can yield 80% of results (LINK?). In other words, the least effort to produce the maximum return. Again, the goal is not to throw the baby out with the bathwater but to identify which cultural changes will make the most impact and enable the organization to navigate disruptive change.
Where Does Change Transformation Resonate Most?
To be sure, all industries are now dealing with the new normal in varying degrees; all are confronting disruption. That's why transformative change programs must be tailored to address many nuances.
Certain industries are particularly vulnerable to disruption in the wake of the coronavirus. Those include:
Healthcare & Pharmaceuticals
These and many other industries are scrambling to put together Change Strategy ™ plans, and it may be too soon to see which will become exemplary case studies. But those organizations in the formative stages of change should be able to benefit from "lessons learned" from the last economic downturn of the Great Recession. Analysis of the Great Recession companies that invested and pivoted during the downturn were posed to overtake competitors who simply retrenched. The good news is that the major tenets of Change Leadership ™ and Change Strategy ™ are applicable across the board.
Overcoming Myths About Change
It's clear that most organizations are intrinsically reluctant to switch gears; most are risk-averse; many are afraid that tackling change may be too onerous and financially prohibitive, and many think the potential rewards of a change program may seem dubious.
More and more companies are moving away from denial and intransigence. They accept that change is inevitable, and they are exploring options for execution. The savvy, forward-looking companies are discovering the positive aspects of change. Indeed, they realize that their companies can be resilient. They are seeing the silver lining of disruption: turning lemons into lemonade.
Unfortunately, many organizations that have admirable goals also have a questionable methodology. Many are being short-sighted and are spinning their wheels by keeping the exercise too insular and limited by in-house resources. Too often, companies report they made ill-conceived and costly (sometimes multi-million-dollar) decisions that could have been averted.
Our change roadmap at LETS calls for cost avoidance and risk mitigation, both of which result in quantitative financial benefits. Business models like ours feature a lean approach, a fast turnaround that doesn't compromise quality, and excellent ROI (typically 70% or better). The point is, every moment you waste in not making a decision or making the wrong decision can be a threat to your competitive edge and perhaps to your very survival. Accordingly, organizations are encouraged to dispel the negative notions about change and celebrate the potentially aspirational nature of change.
Taking The Lead
No doubt, we are living in uncertain and stormy times. But with informed captains at the helms of their ships, along with energized crew members, companies with the right plan can reclaim a sense of calm and chart a new course towards effectiveness and profitability. Executives, guided by an objective, third-party Change Strategist ™ can reverse a rocky course and truly manage change, not be managed by it.
Still, this is not a quick fix. The change lifecycle is fluid and complex, so companies must be prepared to adjust to further disruption (digital, health, economic, social, etc.) in a world that will always be in flux. In this new frontier, however, Change Leadership ™ can be an answer to navigating and conquering disruptive change.
It starts with a clear vision and strategic approach. It takes candor, courage, and concerted effort. But with the proper execution, the right type of Change Strategists ™, the results can be nothing short of transformative.
About Le Transformations
Le Transformations (LETS), a pioneer in the field of Change Leadership, is a leading Change Strategy consulting firm based in Washington, DC, with clients worldwide. LETS helps leaders navigate disruptive change and engage staff in the process. It specializes in industries that are most vulnerable in the post-pandemic world, including healthcare, manufacturing, financial services, automotive/transportation, & technology. LETS' approach features a blending of technology, processes, and people, with a particular focus on culture. Leadership change coaching is a key part of LETS' services.