Ch-ch-ch-changes
Change management is a mess. Can it ever be fixed? How about using the power of networks?
In 1993 I was a partner in a small, three office firm of British Chartered Accountants. At the time I was enamoured of technology and was busy building Paradox databases.
I was concerned that relative profitability among partner portfolios was all over the map and so ran an analysis of the some 2,400 clients we had at the time.
Surprise surprise. I discovers that 20% of our billings accounted for 80% of our profits. I reasoned that we could sell that 80% for a handsome capital gain and double our ongoing income if we operated as a networked business and not in departmental silos. And I had the calculations to prove it.
Naturally, it meant a fundamental restructuring of the business and a radical change in our technology landscape which was already networked but far from operationally efficient.
My fellow partners fought me, questioning my cost predictions and seeking to arbitrarily allocate mythical costs in an effort to disprove my theory.
It quickly became clear to me that what they really wanted was to continue with the status quo. Net-net, I could not win. Not because my theory was necessarily wrong but because I didn’t have enough allies to even try.
Within three months of making my first presentation I resigned and never looked back. Today that same firm has shrunk to a single office with a sole practitioner. None of my contemporaries remain and only one senior ever made partner.
In my last 18 months or so in business I saw many examples of firms wrestling with change.
By that stage I was convinced of two things:
True 180 degree change requires an existential threat so overwhelming that there is no choice.
Incremental change doesn’t cut it.
Since retiring, I’ve modified that view to incorporate a third element.
What I instinctively knew for years was that having a better plan is not enough and that even in the face of threats, organisational leaders need allies in order to execute.
That’s never easy in any firm and only gets harder as businesses become more organisationally complex. But there is one way that leaders can instantiate lasting, successful change. And that is to create a network of allies.
I don’t believe it matters where those allies come from, hence the need for a networked approach. The idea is to build a tribe of believers who will execute on the plan and demonstrate step change value, not the outcomes of tinkering around the edges. .
Why does this work? It’s well understood that human nature resists change. This is especially true in environments that have proven successful in the past. Even where obvious threats exist, change is hard. How many times do you hear: “If only we tinkered with this then all will be fine.?”
The problem is not of resistance but of belief. You only have to look at religious belief systems to understand this. There may be a hairs breadth between the bases of belief between Jews and Muslims but it doesn’t prevent them from going to war with each other. In modern Britain, the gulf between those who believe Brexit is right and those who see it as fundamentally flawed is impossible to bridge. And the same belief principles plague businesses challenged by the need for change.
Creating a network isn’t a slam dunk. Even proven execution can fail. I’ve seen many examples where what I call the ‘institutional antibodies’ sabotage efforts to bring change or where proven success is written off as a sideshow when in reality it represents a model capable of replication.
But…if leaders don’t try then there is no chance of success.
The good news is that today’s technology provides a solid on-ramp for creating the networks needed to provide the essential conduit through which a plan can be executed.
What do you think?