I can sum up most organizational change theory for you in a couple of words: “Typically, HR-owned, process-laden garbage.” Change happens at a micro level. It can be set at a macro level, yes — new strategy — but each person is going to internalize it, process it, deal with it, and ultimately act on it very differently. Some may do it right away. Five years later, you might still have 2-3 employees who are using six-year old systems. Don’t believe me? Visit any organization of more than about 200 people and you can find 1-2 like this. Change management plans terrify people. It’s probably even worse in the modern era, because “We’re going through a re-org” is usually code for “We are going to fire a bunch of people,” and everyone knows that. Also: automation.
Organizational change theory in the modern business climate (which sounds like an awful title for a presentation) pretty much runs on these tracks:
- Most business models were about assets for 40-50 years (owning stuff, in other words)
- The rapid rise of digital and mobile changed that
- Now how we think about “what a company is” or “what industry it’s in” is very different
- For example: is Google a car company? They may be. But wait. Aren’t they tech?
- The way you run your business now is more about platforms and less about assets
- Problem is: a lot of our valuation systems are still screwed up, at business and personal levels
- Huge sums of money fly around for things that may or may not really have that value
- There’s a lot of confusion and fear (and some people getting rich)
What happens at the intersection point of confusion, fear, and a few people getting rich? Most people bury their heads in the sand. They chase what they know and understand. “I am a product marketing guy,” someone screeches, “and I have these KPIs to hit.” In reality, that company barely does product marketing anymore — and those KPIs died 11 years ago. But the pace of communication in the workplace is usually well behind that of “What’s really going on,” and so we come to many problems with setting up an organizational change theory.
Here’s maybe the biggest.
Organizational change theory: Do not linger
Good article here called “Why Leaders Are Still So Hesitant To Invest In New Business Models.” I outlined some of those reasons above. This paragraph pops:
Despite the shift to intangible assets, executives and their strategists are sticking to the status quo. It is easy to understand why this is the case. According to our research at the SEI Center for Advanced Studies in Management, it’s the beliefs of leaders that drive organizational investments, board selection, and management team development and selection, and these beliefs do not change quickly. Outdated beliefs about the world can linger for decades in a leadership team. Further, it simpler and less risky for managers tend to stick closely to the previous year’s budget.
“Outdated beliefs about the world can linger for decades in a leadership team.” Ha. Does that explain work in one sentence, or what?
How does this happen?
Couple of different reasons:
Technology moves faster than personal belief change: So you may have a bad-ass new CRM, but it’ll take another 3-5 years for teams to want to change how they’re doing stuff.
Loss aversion: People are always scared of moving from “A” (where they are now) to “B” (a new thing), because most of us fear loss more than we want gain.
Homophily: Senior leadership teams stay together for years sometimes, because — why leave at that salary/perch, right? When a team is together for years and years, severe “group think” and/or “We’ve always done it that way” results. It’s called homophily. Not good for consistent growth, sadly.
Playing it safe: As noted above, much safer for managers and P&L owners to stick to what they know and what they most recently did. There’s an incentive (bonus) for finding new revenue streams, but if you flop hard on that, the loss (fired?) is much worse. Play it safe.
… and the other reason:
Most “changes” at any job are handled by either HR or external consultants. Regular employees distrust both sets of these people. HR is a joke at most companies, empowered to do virtually nothing. People look at external consultants and think “I’m getting canned.” So right away, we’ve ripped trust completely out of any organizational change theory approach. That’s a good start!
Communication about these things is typically awful as well. “Transparency” has become a buzzword, and that’s sad, but most orgs do nothing to practice it. (Maybe that’s why it became a buzzword.) You have a much higher probability of key information being withheld down the business chain than you do of learning something “change is coming.” People love to hoard info at work. It increases their own professional relevance.
So what can we do to make organizational change theory better?
Off the top of my head? Here’s a few:
- Be honest with your employees about the state of the business
- Explain the rationale for any change
- Remove ownership from HR and hand it to individual managers in 1-on-1 conversations
- The owner of each silo should do “office hours” twice a week for rank-and-files to come ask questions
- Keep communicating
- Train managers on how to have these dialogues with others if they feel uncomfortable
- Regularly look at your market — or the market you actually compete in — and try to forecast where it might be in 12 months, and what you’ll need
- Hire for the right things in 2017, not the same crap you’ve always hired for
Are most managers capable of this?
You’d hope, but the real answer is probably not. It requires a shift away from thinking about work as “I am Mr. Productivity and I hit my KPIs for the people above me” to — > “This is a place populated by other human beings with feelings and insecurities about changes taking place.” It’s much easier for people to conceptualize work in the former way. That’s why we choke everything in process. You can control process. It’s targets, numbers, deliverables. It makes people feel comfortable.
When you bring emotions and real discussions into it, people get terrified. Now there are work/personal lines. There are questions about self-worth, value, future employment, and more. For the execs, a business they built/shaped is potentially losing market value to some app a 25 year-old kid created. All this stuff has major emotional resonance. But most organizational change theory is like “Here’s Lisa from HR with some paperwork to fill out…” That’s a massive, massive disconnect between “what people need in times of change” and “what they’re being offered.”
My friend sent me something once, after he got laid off. He called the process “inhumane.” This post isn’t about being laid off. But organizational change usually does involve a few terminations, etc. And how do most companies deal with it? In a third-party, process-driven, completely-unemotional way. You might argue that’s the best thing. Maybe it is. But I also think it highlights the bigger problem here: we don’t treat people as people at work. We treat them as numbers, plain and simple. And organizational change theory will always be bullshit until we stop doing that.