The Latest Trends in Change
Six Strategies for Business Leaders
by Gaurav Gupta | Kotter, Franz Schwarenthorer | ICG
Preparing for an Unpredictable Future
At the start of a new year, a plethora of forecasters and prognosticators share their views regarding what the coming year has in store for businesses and individuals. Unfortunately, the track record in terms of accuracy for these forecasts is not great. So, while predicting precisely what changes we will be seeing in the next few years is a fool’s errand, some trends can help businesses and leaders to prepare for navigating the changes that will happen.
What is becoming increasingly clear is that the level of uncertainty, complexity, and the pace of such change is unlikely to decrease. Against this backdrop of a greater need for agility and adaptability, we postulate six theses that can help leaders prepare to act in a more unpredictable world:
Continuous change with episodic spikes
Driven by longer term trends like demographics, technology, and globalization and, more recently, the pandemic, as well as supply chain disruptions and the war in Ukraine, the external pace of change has been accelerating. The internal ability of organizations to match this pace has not kept up, and the traditional approach taken toward relying on episodic changes, such as re-organization, mergers, and acquisitions or large capital investments, is not sufficient to close the gap. In addition to the large-scale change driven through these episodic initiatives, organizations increasingly need to cultivate the desire and ability to make more continuous pivots in their strategies, operations, and ways of working.
The idea of a burning platform as a motivation for change has been around for a while, accompanied by quotes like “don’t let a crisis go to waste” and “engineer a crisis to inspire change” being thrown out by advisors and leaders. The latest scientific studies on change have clearly demonstrated that, while a burning platform may create some urgency for change, it does not lead to sustained action or innovative solutions. If the momentary need is just more of the same, but with a greater intensity over a short duration, the burning platform is fine. But when a need exists to find new and innovative solutions that require creative, sustained energy, taking advantage of an inspiring business opportunity to motivate change is far more effective.
Inspiring opportunities rather than burning platforms
Create urgency through a movement
Research conducted over more than two decades indicates that most large-scale change efforts fail because they don’t create enough of a sense of urgency in the broader population. More recent research has shown that this sense of urgency is most effectively created by taking an approach akin to creating social movements. It makes sense to rely on peer-to-peer interactions rather than only top-down communications, apply a see-feel-change rather than an analyze-think-change model, and attempt to capitalize on the early adopters and innovators to help inspire the majority.
Since the Industrial Revolution, the primary purpose of management systems has been to ensure greater efficiency and reliability by controlling processes and minimizing deviations. Organizations of the future must master ambidexterity, that is by achieving both operational excellence and innovation. To achieve this, it is important to implement a learning culture in which more self-organized teams act with accountability. Taking small steps and performing rapid prototyping should enable rapid learning loops, which make it increasingly possible to develop new things together with the customers. So, in addition to increasing their efficiency and reliability, today’s organizations need to be adaptable and agile, which often requires amplifying deviation rather than controlling it. To successfully create truly change-capable organizations, leaders will need to establish informal networks, fluid information channels, and dispersed decision-making to supplement the formal hierarchical decision-making process.
Today’s organizations are built for efficiency and stability; in the future we need adaptable organizations
Organizational culture: A “soft” topic that is turning out to be very “hard” with respect to change
The new demands of Gen Z and social change, on the one hand, and agile working methods, on the other hand, have brought organizational culture more sharply into focus in recent years. Organizational culture is based on the sum of norms, values, and basic beliefs (i.e., the way organizations do things and solve problems). The demand for this culture has changed dramatically in recent years. For this reason, it is vital to analyze the future success of the organization: Which aspects of our cooperation are conducive to this, and which are obstructive? As further developments occur, beneficial aspects can be strengthened and obstructive ones can be overcome. It is important to remember that we operate within a self-reinforcing loop: Our attitudes ("how we think and feel") shape our behavior ("how we act"). We need to break this loop by making new experiences. For example, if an attitude of mistrust has prevailed in the organization, this may have manifested itself in a very strong culture of control. If we want to change this, the control should be reduced, and the growth of trust should be encouraged.
Until the end of 2019, face-to-face work was predominant, virtual work was becoming more common or still the exception, depending on the setting, and hybrid collaboration hardly happened at all. The term is ‘face-to-face format’. We meet ‘in presence’. As of March 2020, economy has entered a painful but incredibly rapid learning process, integrating virtual and hybrid meeting formats in their organizations. Meanwhile meetings held by using such online platforms as Skype®, Teams®, or Zoom® are commonplace, and tools that can be used to support collaboration virtually, such as Miro®, the Mural® visual collaboration platform, and Trello®, have been mastered by many. Agile methods and rituals, which were originally still used more by agile project teams, have proven to be especially valuable during the pandemic and have spread immensely. This spread will continue in the future. For future collaboration in daily work and in change processes, teams will work together by using face-to-face, virtual, or even hybrid meeting formats and will use rituals such as standups, reviews, and retrospectives. Our opportunity is to take advantage of these possibilities and integrate them appropriately into all development processes.
Working together using face-to-face, virtual, and hybrid meeting formats – our future world of cooperation
In conclusion, the latest trends in change emphasize the need for businesses and leaders to adapt and navigate the increasingly uncertain and complex landscape. Overall, the mentioned trends highlight the need for leaders to embrace change, foster agility, and create a culture that supports continuous learning and adaptation. By understanding and applying these trends, businesses can better prepare for the challenges and opportunities that lie ahead in an unpredictable world.