6 principles for successfully leading change in the cyber-physical age

Leading change employer of choice investment leadership

When it comes to successfully leading change, a more inclusive 6-step approach will yield better results for leaders, writes Anthony Mitchell

In 1996, John Kotter published his well-known and influential work, Leading Change, which TIME magazine selected in 2011 as one of the 25 most influential business management books ever written.

While business academics and practitioners had written on the topic of change before, this book – with its eight stages – struck many as the first compelling framework for change leadership. Of course, many more frameworks have followed in its wake, generally structured around 5-10 key steps, five-letter acronyms, and so on.

Unfortunately, while many of these frameworks, including Kotter’s, were intelligent and certainly contain useful advice, they simply weren’t designed for the cyber-physical age. Leading Change was written 20 years before the smartphone, had no awareness of the phenomenon of social media, the impact of machine learning, the leaps of neuroscience, the methods of agile and design thinking, or the turbulent disruption of the cyber-physical age that has led infrastructurally tiny organisations such as Uber, Netflix and AirBnB to decimate the ranks of hitherto impervious incumbents.

A massive paradigm shift
These are not simply new developments – they collectively constitute a massive paradigm shift in our conceptualisation of competitive advantage, organisational design, culture and ways of working. If we think of the change frameworks created from 1996 to around 2010 as houses, no amount of redecorating can fix their shortcomings – it’s the foundations that must change.

Why are these historically sound frameworks inadequate as change models for today and tomorrow? Because they don’t reflect how organisations now need to work and how the most successfully disruptive organisations already do. As I’ve written before, organisations are now compelled to:

  • Move from ‘hierarchy’ to ‘networks’ as the basis for organising, communicating and collaborating
  • Move 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

“Successful change has almost nothing to do with a few people knowing the right answer”

When John Kotter prescribed eight stages, he didn’t envisage a future where:

  • In the typical cycle time from stage one to stage one, a seemingly robust corporation could be disintermediated and wiped out. While corporate failures certainly occurred in 1996, they weren’t because a 50-person two-year-old start-up had created a business model that rendered an industry obsolete!
  • Even in traditional organisations (say, ANZ Bank), the CEO would largely eradicate middle management and replace it with fluid, project-based, self-leading teams
  • Neuroscience would get inside people’s brains and detect the precise reward and threat neurotransmitter triggers that would inform change messaging
  • Mobile and digital tools would enable organisations to crowd-source employee views as a basis for developing strategy in real-time
  • A gig economy would drive portfolio careers, where many of the organisation’s most valuable people would not actually be employees
  • Agile and design thinking would reshape not only project management and R&D, but actually replace the prized value of ‘getting things right’ with a preference for experimentation and fast failure

Leading change in the cyber-physical age
So what should change leadership look like in this kind of context? At Bendelta, we have researched, designed and applied the alchemy of change, deliberately attuned to the new kind of organisation for the cyber-physical age. It reflects increasingly holocratic models of culture and key insights on the neuroscience of change.

What have we found about leading change in the cyber-physical age? These insights stand out:

  • Successful change has almost nothing to do with a few people knowing the right answer. Rather, more than ever before in organisations, it comes from felt co-authorship.
  • As a result, the how (‘how to achieve felt co-authorship’) is vastly more important than the what (‘the right end state’). As a modern leader, it will be your skilfulness at the “how” that will determine the success of the changes you lead, far more than your capability at the “what”
  • Culture is at essence anthropological. It is a reflection of your deepest beliefs, whether manifested intentionally or unintentionally. To make it intentional, ensure your desired culture is reflected in your stories, symbols, language, rituals, norms and incentives.
  • Success comes from leading change through both your overt organisation (e.g. the reporting lines and structures) and through your informal networks. However, each responds to quite different drivers and incentives. Far too many leaders over-rely on the formal structure, when increasingly, it is the informal networks that best catalyse change.

“As a modern leader, it will be your skilfulness at the how that will determine the success of the changes you lead, far more than your capability at the what”

So, what does all this mean? It means that leaders can’t rely on a linear series of steps to manage resistance and drive through their solution. Instead, leaders need to invert their thinking so that the solution is generated inclusively and collectively, meaning that there is little or no resistance to be managed, because (almost) everyone sees themselves as a co-creator of the solution.

And one more thing. This approach makes the solution itself better too!

6 steps to leading change in the cyber-physical age
So, you’ve got change to lead. What practical steps should you take, if you want it to succeed in a contemporary culture?

1. Before you start designing the technical solution, ask yourself: “How can this be approached so that we design the solution?” The size of ‘we’ may vary – for a small initiative it might involve a cross-section of end-users, for a major transformational it might mean the whole organisation, and customers too.

2. Consider how this change could be seen as an exciting opportunity to co-create the future, not a threat to people’s sense of safety and status quo. This changes everything. Those working at NASA during the space race didn’t fear change – it was precisely why they worked there. If you can create the same sense of pioneering spirit, you’re likely to generate positive tension, not negative tension.

3. Engage a broad audience in imagining the future state and its benefits. Make the process aspirational and creative. This will release oxytocin in people’s brains, fuelling imagination, optimism and faith.

4. Model the change you want to see. If you want to create a more nimble, innovative, collaborative organisation, undertake the design process in a nimble, innovative, collaborative way. Don’t do it by writing a dry, static, single-perspective report!

5. Split your focus evenly between the formal structure and informal networks (which may need to be created). The greatest power for change will come from volunteerism, so find people who want to get involved in creating the future state and fuel them with a sense of autonomy, stretch, purpose and connectedness. While ensuring that you don’t lose the support of those in formal authority, give your volunteers space and encouragement, then see what they can do

6. Finally, don’t give up because there are challenges. No important change is ever easy or straightforward. While you should pay attention to negative feedback, don’t be dispirited but rather simply use it as information to refine your approach. Those who are against the change now may be the same people who, a year from now, say they were always behind it!