Companies today have to be run in a very different way from a decade ago, but because we adapted so well, we barely noticed how much changed – which has an important number of inplications for leaders, according to Anthony Mitchell
There are these two young fish swimming along, and they happen to meet an older fish swimming the other way, who nods at them and says, “Morning, boys. How’s the water?” And the two young fish swim on for a bit, and then eventually one of them looks over at the other and goes, “What the hell is water?”
Not only do we sometimes fail to see what is in plain sight, but also we fail to see that things have changed. Despite all of our talk about how people resist change, humans are incredibly adaptable. In fact, it is our adaptability that makes us resist change!
How can this be? To take Wallace’s parable further, if humans had to move from swimming in fresh water to swimming in salt water, we’d adapt. We’d adapt so well that we’d barely notice the change. But if someone told us “In five years, we’ll all be swimming in salt water”, we’d say this was unthinkable, because we don’t realise our proven skill at adapting to changes.
The same is true of our changing business context. Companies today have to be run in a very different way from a decade ago, but because we adapted so well, we barely noticed how much changed. (And if we joined the workforce in the last decade, we didn’t have anything to compare it to.)
How are we working most differently? Increasingly, being a successful organisation is driven by two key factors:
“There is always a period of time when the old frameworks don’t quite work any more but the new paradigm has not yet been accepted. During that time, some try to bolster the old ways while others champion the new”
- Designing, inculcating or leveraging the exponential technologies that underpin the next business model breakthrough; and
- Realising the full potential of people in terms of their most quintessentially human capabilities (e.g. creativity, collaboration and empathy)
To access these drivers, company cultures and ways of working are changing in three key respects:
- Moving from ‘hierarchy’ to ‘networks’ as the basis for organising, communicating and collaborating
- Moving from ‘precedent’ to ‘wisdom of crowds’ (especially customers and front-line employees) as the basis for decision-making
- Moving from ‘activity’ to ‘outcomes’ as the basis for evaluating human contribution to performance
Some cultures embody the above, while many have moved too slowly. There’s a clear correlation between the organisations which are working this way most and who is winning in the market. Most of us will be able to think of companies, divisions or teams where the levels of empowerment, engagement, collaboration and innovation are higher and where that entity is achieving stronger outcomes as a result.
However, to get to this point, most organisations will have to make radical change to structures and ways of working. Such change is undeniably an enormous challenge – it requires a paradigm shift.
The term ‘paradigm shift’ was coined by Thomas Kuhn’s work The Structure of Scientific Revolutions. Kuhn identified that scientific revolution occurs when scientists encounter anomalies that cannot be explained by the universally accepted paradigm within which scientific progress has previously been made.
What this means is that there is always a period of time when the old frameworks don’t quite work any more but the new paradigm has not yet been accepted. During that time, some try to bolster the old ways while others champion the new.
“That’s what we are seeing in the business world today: a clash of pioneers and conservatives. What’s interesting though is that the battle, at least in terms of business results, is already tipping clearly towards the pioneers”
That’s what we are seeing in the business world today: a clash of pioneers and conservatives. What’s interesting though is that the battle, at least in terms of business results, is already tipping clearly towards the pioneers. Why? Probably because exponential technologies are enabling organisations to take advantage of superior strategies more rapidly than in the past.
All of this means that leaders need to take responsibility for rapid change. Even if some fish are saying they could never swim in different water, leaders need to change the operating environment and help people see that they can swim better than ever.
How can leaders champion the new?
Organisations of the future must be organised to markedly increase levels of self-determined motivation. The current levels of employee engagement seen in many companies will simply not equip them to deliver their potential public value.
Specifically, leaders (whether line managers or in HR) should look to drive seven key shifts:
- Make it possible to move swiftly from current technologies to ever emerging technologies that enable greater value creation (e.g. through automation and machine learning)
- Enable employees to feel the strongest sense of autonomy, mastery, growth, purpose and connectedness
- Eliminate antagonism, hierarchy and competition between different business areas and levels so that everyone can focus fully on collaborating on creating public value
- Make it frictionless for brilliant ideas from the coalface to make it through to practical implementation
- Make it easy to experiment and blame-free to learn from ‘fast failures’
- Invest deeply in helping leaders and others to develop their full potential, using the best possible methods to rapidly and durably build much higher personal capability
- Foster rapid and effective collaboration and joined up responses
“Even if some fish are saying they could never swim in different water, leaders need to change the operating environment and help people see that they can swim better than ever”
Apart from simply focusing on these seven shifts, how can leaders best bring about change? In most ways, this is no different from any other cultural change. (It’s just that the outcomes are different.) If you are a leader, you can shape the future by:
- First and foremost, role modelling the shifts that are required
- Listening to voices of change, especially from the frontline, customers and even unrelated industries
- Crafting and communicating compelling narratives that build desire for a new future
- Rewarding aligned behaviour and never walking past misaligned behaviour
- Putting in place the change tools required (e.g. measurements, feedback loops)
And always asking themselves “How could I foster more self-determined motivation than we currently see?”