The Nature of Change: Why Companies Need to Adapt or Die
What’s the biggest disruptor of companies and organizations in the 21st century? Undeniably, it’s high speed change and shifts in the global economy and the business environment. What was business common sense a few years ago do not solve the complex challenges of the present. The business behemoths of today could easily be the downsizing company of tomorrow.
Successful companies are, by nature, rigid and highly structured. And in many ways, rightly so as success typically depended on scale, quality, and the optimization of a business model. Yet, success can also breed complacency, which can inevitably place a company in an untenable situation. It’s no longer a question of whether companies will adapt, it’s a question of how fast they do.
The game-changing trend of digital transformation is a case in point. According to Accenture CEO Pierre Nanteme, digitalization is “the main reason just over half of the Fortune 500 companies have disappeared since the year 2000.” The digitalization wave is transforming businesses mainly through the introduction of artificial intelligence, the rise of disruptive business models, and innovation initiatives that discover and create new value. Entire business landscapes are changing with the fast pace and growth of innovation and technology. The message is clear: organizations and businesses need the capacity to change and adapt as quickly as possible.
But why is organizational change so difficult? Instinctively, no one likes change. Humans, who are mostly creatures of comfort, crave a certain degree of predictability and stability in all areas of life – including work.
Center for Asia Leadership Teaching Fellow Craig Brimhall is one of those inquisitive minds looking deeper into the principles of and insights into the nature of change and why it’s imperative for organizations to adapt. Brimhall is a Business Instructional Designer and former Design Thinking Consultant. He is also a current doctoral student at the University of Utah where his research focuses on organizational transformation; and holds a Master’s Degree on the Mind, Brain, and Education at the Harvard Graduate School of Education.
Brimhall states that it is not change itself that people fear that makes them resistant – rather it is the fear of failure. Venturing out into the unknown carries the shadow of possible loss and disaster.
In this interview, we catch up with Brimhall on his current research and teaching on the nature of change.
Your research focuses on the nature of change and organizational transformation. Was there a particular incident or experience that inspired you to pursue it in depth?
My passion for organizational transformation stems from two key experiences when I was still a university student and later, when I taught as a university lecturer. First, I played baseball in college and was on a team that experienced a large organizational change that led to unprecedented success for the program. I became curious if the principles that engendered our successful change could be implemented in other organizations.
Later, when I taught university students, the lack of ability to quickly change to meet student demands led to poor outcomes for students, staff, and the community. Simply being willing to try and change would have made a large impact on many people’s lives.
Tell us the most interesting and intriguing findings you’ve discovered about overcoming inertia and why it’s so hard to change traditions and culture.
The most interesting finding about organizational change I’ve found is the paradoxical relationship between success and change. Organizations that avoid failure likely become entrenched in the status quo and are often unable to quickly adapt and change when it is necessary. Organizations that eschew all forms of failure do so at their own peril.
Second, on an individual level, employees often look to other people in their organization to make sense of change initiatives and these influential peers can have a massive impact on whether an organizational change is embraced or resisted. Having a leader (whether formal or informal) championing a change can go a long way in ensuring successful implementation.
Could you describe a case of an individual or a company that successfully navigated change? How was it done?
Organizational change is difficult and few companies seem to be successful in implementing change initiatives, however, one of my favorite examples is the creation of the Behavioral Insight Unit by the British Government. The unit was created as an experiment to try and apply behavioral insights to governmental policy. What started out as a small scale experiment has exploded into a team of 150 employees who work regularly to understand the human side of policy decisions. The rapid growth can likely be attributed their ability to propose novel solutions that work to seemingly intractable human problems. The unit’s work has led to an increase in organ donations, increases in money being invested into retirement funds, and an improvement in diversity on the British Police Force. Because of their successes, behavioral insight teams have popped up all around the globe.
You are also a design thinker. Could you tell us about how design thinking principles inform how you approach organizational transformation?
As a behavioral scientist, I have two favorite design thinking principles: empathy and experimentation. Successful organizational transformation begins by truly and deeply understanding the humans involved in the organizational change. Once the human element is understood it becomes possible to rapidly experiment with different designs created to meet the needs of the employees or customers. Using empathy and experimentation create immense power to quickly try out ideas, fail, and try again.
The beauty of design thinking is its emphasis on experimentation and rapid prototyping. Essentially, design thinking encourages organizations to fail quickly and often at the beginning of a change and these failures often uncover new paths to success. By encouraging experimentation, design thinking lowers the risks of trying new things and searching for new ways to meet the present and future challenges.
What can organizations do then to ignite change in their organizations?
This is a great question, and likely the most important one. It is easy for organizations to give lip service to experimentation and failure, however, actually recognizing the value of failure and embracing it is a different story. To be successful and agile in today’s fast moving economy, organizations can create “safe” spaces where employees are allowed to take calculated risks without fear of being punished if the risks taken result in failure. Conveniently, this also connects back to design thinking. By encouraging rapid prototyping, organizations can harvest the powerful lessons failure can teach without being exposed to too much risk.
I know of an organization that created small teams that operated outside of the structure and rules all other employees and teams had to follow. These teams were organized explicitly to generate and try out new ideas without having to fear punishment for pursuing dead ends or for using too many resources. Creating this sort of experimental sub-organizational environment can reap huge dividends for companies.
What are the particular characteristics or behaviors of “change agents” that have successfully led their organization through change initiatives?
Often, when we think of change agents we immediately think about C-level executives. Absolutely these individuals have the power and position to be change agents. Just look at what Peter Cuneo did at Marvel Entertainment. He saved the superhero company by focusing on licensing its characters for movies, TV, and products. However, a person doesn’t have to have a lofty title to be a change agent. I recently worked on a project with a hospital that was trying to implement a new patient safety protocol. We found that a few nurses had a large impact on the buy-in other employees had for the initiative. By championing the change, these change agents were able to corral support and lead its successful implementation.
Regardless of title, change agents often have to make hard decisions that may be unpopular at the time. However, change agents recognize the long-term value of the change and are resilient in getting other people onboard with their vision for the change.
By Nirva’ana Ella Delacruz and John Lim