Create transformative innovation

Creating a culture of change

The old stop-start approach to change management is doomed. Today’s fast-paced world requires enterprise-wide platforms that make continuous evolution integral to corporate culture.

Creating a culture of change

“Unfreeze-change-refreeze.” For decades, that’s how change management could’ve loosely been described. But technology has accelerated the pace of innovation and that staccato approach is no longer fast or responsive enough to keep up with current business practices.

Management Innovation eXchange founder Michele Zanini, writing for McKinsey & Co recently, noted that, “In a world that’s relentlessly evolving, anything that is frozen soon becomes irrelevant … What we need instead is constant experimentation.”

Zanini argues the need for a change platform rather than a change programme to support ongoing rather than episodic change.

The importance of ongoing communication to facilitate change was most recently highlighted in the 2013 Change and Communication ROI Survey, which demonstrated that 75 percent of change projects lose momentum over time because the underlying business culture is not open to change.

Put simply, change must be baked in, not bolted on; to be successful change must be part of the corporate culture.

Creating the culture

As director for the Emotional Intelligence Institute (EII), Rachel Green has worked with senior executives throughout the corporate sector to help them adopt a culture tailored to smooth, constant transition rather than big bang disasters.

She points out that a culture of constant change is fundamental to the success of contemporary enterprises – because transition has become fundamentally linked to success in many industries.

“You can’t wait two years to change, because your competitors may have changed last night,” Green says. “Then in the scurry to keep up with competitors change is rushed and the emotions of change are often overlooked”.

To make a functional transition from stop-start change to a smooth regular transformation, businesses must prepare stakeholders emotionally for the transition.

“Most people have a stronger emotional response to imposed change than to accepted change,” Green explained. “Successful organisations are able to acknowledge how people are feeling and allow their feelings – and then manage the feelings.”

Samsung’s success story

When Korean manufacturer Samsung famously blew up its status quo – a command-and-control structure managed by long-term insiders – it decided to crystallise the benefits for employees.

Samsung’s “New Management Approach”, in which the firm’s chairman very publicly championed the hiring of outsiders with fresh ideas, also socialised profit sharing, so that all employees benefited from successful change. They became invested in embracing change. As a result, Samsung has transformed from a low-cost OEM business to a world leader in R&D, marketing and design. And it continues to make tweaks in response to changing market conditions and expectations.

Australian organisations are following suit. The Commonwealth Bank revealed in its most recent half-year results that it was now making changes to its information systems at the rate of 3852 a month. That pace is simply not possible unless an organisation has a culture focused on innovation and embracing change.

“You can’t wait two years to change because your competitors may have changed last night.”

Rachel Green, director of the Emotional Intelligence Institute

The agile approach

Agile work practices, which originated in IT departments, are increasingly pervasive in the rest of business according to Denise Wright, a director at Changeworks Consulting. Wrights says it’s increasingly common to see stakeholders from across a business participate in collaborative techniques such as stand-up meetings and storyboarding to scope any change.

Wright says stakeholders can then use social media such as Yammer to communicate about the planned changes, essentially forging the sort of change platform Hamel and Zanini lauded.

“If you don’t get the business involved, you will get resistance further down the track,” she adds. “And if you don’t have senior buy-in and sponsorship … you will have an unsuccessful implementation.”

Finally, Wright says captains of industry must lead the way. “They need to be modelling new ways of working and change,” she explains. “We spend a lot of time coaching leaders on that.”

In summary
  • Technology has accelerated the pace of innovation; a stop-start approach to change management no longer works
  • Agile enterprises need to acknowledge employees have an emotional response to change and manage it, allowing them to embrace new ways of doing business
  • Change management practices can’t be bolted onto a business – they must be baked in
  • Business leaders need to model change behaviour for the enterprise – if it must change, so must they.

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