Management Excellence by Art Petty

Jack Welch, in his 2005 book, Winning, offers the following thoughts on change:

“For more than a decade, there has been a whole industry devoted to the topic (change), all of it selling pretty much the same line: change or die.  Well…it’s true.”

Mr. Welch also offers up the following advice in his usual, blunt style:  "You have to change, preferably before you have to."

I bring these quotes up because the other day I was asked to put together my thoughts for a talk at a gathering of community leaders in business, education and government on "How organizations can improve at recognizing the need to change."  The talk itself encompasses the full continuum of change issues, but my part is specifically focused around recognition.

I like this topic and think I it is brutally important to leaders and organizations regardless of whether they operate in the public or private sector.  I believe that it is important for organizations to develop competence at translating marketplace and macro-environmental changes into appropriate changes to better serve stakeholders.  No easy task, especially considering the "noise" that we all face in this era of accelerating change, time compression and growing complexity. 

I also think that improving an organization's ability to recognize the need for change, requires  an organization to improve in a number of areas that are essential for survival and success, namely leadership, strategy and execution.

First, A Few Thoughts On The Topic of Change:

• Change is a profound issue for most organizations, and a profoundly personal issue for people inside of organizations. 

• Most people are not wired to seek out change.  When talking about improving our ability to recognize the need for change, we are engaging in a tug-of-war with our nature.

• Leaders have the toughest job when it comes to change.  First, they have to ask and answer: "How should we change?" and then they have to succeed by gaining commitment from their organization on: "We should change."

• It's easy to overload on change.  There are ample opportunities for organizations to flail at the changing forces in our environments, never certain which ones are material or immaterial.

Organizations and People Have a Change IQ (Change Quotient)

It's hard to consider helping an organization improve their ability to recognize the need to change without taking into account that everyone and every organization has some predisposition towards the issue.  While there are a variety of perspectives on the topic of Change Quotient, a search will show common agreement on at least 3 components:

1. The ability to recognize the need for change: high change quotient leaders recognize the need to change before it is too late.

2. Understanding and mastering the change process: high change quotient leaders develop organizational competence at translating the need to change into actions that create value.

3. Emotional comfort with change: high change quotient leaders develop an inherent comfort with change based on their relative intelligence in components 1 and 2 above.

A number of practitioners offers assessments or audits to rate individuals and organizations on the three broad areas of Change IQ, I'll attempt a simple and practical audit for just #1, the ability to recognize the need for change.

Rating Your Organizations Change Recognition Quotient:

1. We have a current, clearly defined strategy.

2. Our employees would describe themselves as extremely comfortable in offering new ideas to our executives.

3. Our leaders (at all levels) are accountable for providing feedback on what they are learning about our
business and our customers.

4. Strategy meetings include individuals from all levels of the organization.

5. Someone or some group is responsible for external monitoring and report-back (market forces, trends, new advancements).

6. During the past year we have acted on something we learned externally by taking action to create a new
(program, product, service etc.).

7. We have an excellent understanding of how our customer's expectations for our offerings are changing.

8. Our offerings resonate with our customers so well that they practically sell themselves.

9. Strategy review and planning occurs multiple times per year.

10. We regularly engage in scenario discussions, where we imagine the impact of trends and forces on our business and on our customers.

11. Our employees would describe our approach to change as proactive.

12. We frequently have animated discussions on future directions.

13. New ideas come from people at all levels of the organization.

While I have yet to thrift these questions down and attach a scale, I would submit that a "strongly agree" answer to most of them would indicate a high Change Recognition Quotient score and a "strongly disagree" the opposite.   (I would love any input from readers on fine tuning the questions to create a viable Change Recognition Quotient survey.)

How Do We Improve Our Ability to Recognize the Need to Change?

I offer a number of "Best Practice" ideas for raising the effectiveness of an organization at recognizing the need for change.  These include:

Change your strategy habits.  Strategy is not an event, but a process and an effective strategy program incorporates ideas and insights from the broader organization (not just leaders).  Additionally, traditional tools (SWOT, Porters Forces etc.) often fall short in providing the level of depth you might need on change issues.  Consider scenario planning, even at a basic level (best case, worst case, continuation of current state) as a tool to inspire lateral thinking about your business and how forces might impact you.

Change your strategy communication habits.  Everyone in an organization must pass the "Walk In the Door" test, which simply means that as a person shows up to work, they understand very clearly how their priorities tie into the organization's strategic priorities.

Get your organization talking candidly.  Whether you call it robust dialogue or candid conversations, everyone at every level of an organization must be comfortable in providing ideas and insights on tough issues without fear of reprisal.  Many cultures are not like this, and moving from a less than candid or a collegial environment to one where the tough issues are fair game for everyone, is a significant leadership challenge.

Create forums for ideas and insights to be exchanged.  Make certain that the dialogue of the organization is about the marketplace, about customers and that it includes a lot of "What if?" and "Why don't we?" types of discussions.

Get leadership on the same page regarding their role in facilitating dialogue.  If you are at the top of the leadership chain, this is your job.  Your leaders must understand the importance of identifying the right change opportunities, and they need to carry this message and requisite behaviors to their reports and teams.

Establish accountability for turning insights into actions.  Ultimately, you need to do something that creates value for your customers through change, so teams have to learn when to stop talking and start acting.  As a leader, you must encourage your organization to develop the protocols for implementing ideas and then reinforce both the victories and the losses as part of the learning process.

The Bottom-Line for Now:

If you are intent on maintaining and developing an organization that contributes to society, grows and runs profitably, the need for or possibility of change is omnipresent.  The good news is that as a leader there are many ways for institutionalizing the recognition for the need to change.  The better news is that improving in this area requires you to improve in the ways that your organization fundamentally creates value.  I prefer to turn "Change or Die" into "Change and Prosper."