Why do we change organizations?

In 1997 I was at the Kansas City Airport, I was getting ready to board a plane for a business trip and I needed something for the trip to read. I picked up the April/May issue of Fast Company magazine. On the front cover in big bold letters was the word, “Change.” I quickly identified with the content because I had just been promoted to manager and the company was experiencing explosive growth.

I can recall reading the entire magazine from cover to cover before I ever landed in Florida. There was a specific article called, “The 10 laws of Change” that seemed to describe what I was feeling about the changes personally and also what the company seemed to be experiencing. Also, in 1996 John Kotter published his book called “Leading Change” where he looked at several companies' efforts to transform their organizations. John concluded that there were eight steps to transform your organization:

1. Establish a sense of urgency

2. Forming a powerful guiding coalition

3. Creating a vision

4. Communicating the vision

5. Empowering others to act on the vision

6. Planning for and creating short-term wins

7. Consolidating improvements and producing still more change

8. Institutionalizing new approach

The question is not only how the transformation will work but a more basic question that I had was understanding why we needed to change the organization. If you look at what changes in our daily, monthly, and yearly lives and business you can look at these factors:

• Social-Demographics (People/Society)

• Competition/Substitutes

• Economics/Ecology

• Political/Regulatory

• Technology

• Industry/Suppliers

• Customers/Consumers

In Systems Thinking there is a concept called, “The Iceberg of Change" or "Theory of Change."

This concept explains that when you are going to change any system there are four elements that come into play. 0.1 Content. The content of the change; the change-related tasks and goals. 0.2 Processes. The process of change; is how we carry out tasks and meet our goals. 0.3 Structures. The structures or frameworks within the content and process operate; the arrangements we must set up to manage change. 0.4 Culture/Commitment. These are the values, assumptions, or beliefs that we have.

In most organizational change efforts we focus on the things that we can see which are those that are listed above the water line in the diagram below. The reality of what we should be focused on when changing organizations is that 87-90% of those factors/issues that are below the iceberg. The reality is that as organizations change and grow we should be focused on also building the appropriate amount of processes and structures necessary in order to make these changes. Additionally, we need to be listening to the organization to understand how these changes are impacting our beliefs, norms, and behaviors which make up our culture.

In the original Fast Company issue they talk about people being “Change Agents.” Over my career, I have never really viewed myself as a change agent but in the latter half of my career, I have found that most Entrepreneurs, Founders, and CEOs have hired me for that exact reason. They want my experience and expertise because they had a goal or mission to change their organization in some meaningful way. The change may come in the form of high performance, scaling the business, or using new technologies to create some optimization.

We naturally want to avoid change - we prefer the status quo, with its comfort and familiarity, and stability, rather than pursue change with its awkwardness, uncertainty, and ambiguity. However, we can increase our chances of transforming the organization if we have: (a) a clear understanding of why we need to change (b) a clear structure for change and (c) a framework that helps us manage the change

How mature is your organization?

Since I began my career in 1995, I have worked for 6 different entrepreneurs/founders. All of these individuals started these companies and have since either sold the company, closed the company or they still exist. I have kept a journal of all my observations of the organizations and the Entrepreneurs/Founders I have worked with. The majority of these notes were for me to be able to learn from the strategies that worked and to be able to learn from their failures or challenges. I recently went back through these notes to understand what some of the common themes were around their challenges. Here are my notes:

• The technical founder failed to acknowledge how his/her role needed to change for the long-term success of the company based on where he/she was at in the company maturity process. Over the course of time companies, leaders and team members go through a maturity process. Note: I created a maturity assessment checklist and matrix to understand a common way to understand where each company is within that maturity timeline.

• Entrepreneurs/Founders failed to acknowledge their lack of business acumen and waited too long to hire the necessary people or team. A relatively old book but still some relevant content around this topic can be found in the EMyth by Michael Gerber.

• Entrepreneurs/Founders failed to pay attention and respond to trends in the marketplace for their product or service and then lost their competitive advantage. Think of Polaroid not responding quickly enough to digital transformation. Note: Although there has been a resurgence as the old is now new again.
  

• Entrepreneurs/Founders lack the ability to leverage or learn from their network/community. When the business is struggling, his/her unwillingness to rely on their network or community for help. I think if you are willing you can find your community of executives who have already lived through some of the challenges you are facing. I always find it surprising when I still talk to CEOs who think they are the only ones that can solve their issues or problems. The organization and maybe your board may not tolerate this approach or attitude.

• Entrepreneurs/Founder's inability to think strategically about innovative ways to grow the business beyond traditional methods. (new markets or new applications of a product or service). I worked for this company that built software for the fintech world. They had one product that they kept iterating around but the idea of building anything else for a different industry or selling services around that product was just foreign to the leadership team.

• Entrepreneur/Founder failure to hire competent executives and leadership team members. Also, inability or unwillingness to fire incompetent executives or leadership team members. The old term is “hire slow, fire fast.” I have witnessed more damage done by CEOs to their own organization because they were unwilling to fire underperforming leaders. Conversely, I have observed senior leaders unwilling to pay top dollar to executives that could take their company to another level.

• Entrepreneurs/Founders ignored or did not understand how to build a culture of excellence. Yankees vs. Brewers. The Yankees have won 27 World Series titles. The Rangers, Padres, Brewers, Mariners, Rockies, and Rays have never won a world series. I have worked for companies that were considered the Yankees of their industry and the culture was so distinctly different, expectations were high from each other, and being really good was always a lot of fun.
  

A yearly reflection on your career.

I understand there has been a lot written about the “Great Resignation” however several years ago I decided that I would use every November/December to reflect on my level of satisfaction in my role with the company. I don’t use any tools in order to make this evaluation but just put some serious thought around the following questions or topics: (1) Value of my time. Do you find the work that you are doing challenging and engaging? Do you find the work you are doing rewarding?

(2) Check your values. Do your personal values still align closely with the company values? And vice versa. (3) Check the culture. Organizations are living, breathing things and therefore so is the culture. Has the culture changed or evolved? Does it still align with the culture that originally attracted you to the company? Has the culture become toxic in terms of its willingness or desire to solve issues or problems? (4) Work/Life Balance. Does the organization make it easier or harder for you to achieve some sense of balance?

(5) Rewards. Have you achieved the goals that were set? If so, are you being properly rewarded for your performance and the organizational results? (6) Benefits. Have the company's benefits both traditional and non-traditional changed and improved? (7) Reputation. Is the organization that you are working for still viewed as a leader, innovator, or creative in the marketplace? Are they continuing to create value or have they become complacent?

(8) Learning and growing. Two somewhat different perspectives on this topic. Has the broader organization learned from its mistakes with respect to people, processes, and performance? Do you feel as an employee that during the past year you have grown in your own knowledge, skills, and experience? (9) Leadership/Management and Transparency. Do you know how well (or not) the company is doing? Do you have confidence in the team that is leading the organization? Have they made good decisions to achieve the goals of the organization? Have they connected you to those goals clearly? (10) Team members. The people you come to work with each day matter greatly. Has the organization done a good job of finding new team members that fit well within the team? Has the organization done a good job of working with those team members whose performance is poor? Have they acted quickly when it was obvious the team member was impacting the overall team's performance?

Lastly, and maybe more importantly, while you can choose to do this sort of self-evaluation it is non-negotiable that on a frequent basis the organization must solicit your feedback on how satisfied you are in your position/role. Of equal importance is what they do with this data once it is provided to the organization because sadly a fair amount of organizations fail to act on this feedback.

All of these questions and topics are all interconnected and our level of satisfaction for each moves along the continuum between dissatisfied to very satisfied. However, it is critical that you spend some part of your time reflecting and determining how satisfied you are in your position or role. I remind myself that life is short, and working with people who I like and respect is ideal, working with an organization that is respected for the work they do for their clients/customers and is financially rewarding is what we are all in search of.