Dear CEO, 2

I hope you are well, and that the world swirling around you is swirling a little less and that you’re feeling less stress about the path forward. Unlikely, but it’s okay to hope! As I shared in my first letter, the challenge for us all is that the pace of change is now faster than our organization’s current natural capacity to change. The disruptions we face, the torrent of new competitors, new technologies, and even new ways of connecting the basic dots of how to run a business are overwhelming, befuddling and down right debilitating. Because rather than rise to the challenge of change, most organizations and most people either run the other way or simply stop dead in their mental tracks, ignoring the truth while longing for the good old days. Until it’s too late.

So in order to respond to change we must get better at it. We must increase our organization’s capacity not just to change but to change quickly, effectively and in perpetuity. Because the other ugly truth is this dynamic is not going away. In fact, I think you’d agree that the pace of the change and the consequences it carries are only going to get bigger. 

So what exactly do we do? Well, it turns out that the only way to substantively increase your organization’s capacity to change is to motivate it, teach it, exemplify it, require it, align around it, and measure it. And interestingly, measuring it is the essential starting point. For in order to make something better, we first have to agree on what better is. So, when you tell me you want a nimbler organization, what do you mean? When you say you want to create a culture of innovation, what does that mean? And how do you know that you don’t have one already? How are you measuring your current innovative or change capacity? If you’re like 99% of the organizations I talk to, you don’t.  So, we have to start there. We have to define what we’re after in really specific terms, and then use those outcomes as guides for what we actually need to do to make the outcomes happen. It’s basic systems design thinking but not often applied by organizations seeking to change their capacity to change. 

After years of working at this What are we after? question, I have come to believe that the measures of a more change capable, innovative, nimble organization are both functional and behavioral. Sure, the old measures of revenue and profit growth are still valid, but they don’t really capture whether the organization is better at creating, connecting, and manifesting value out of the aforementioned swirl. Remember an organization is nothing but an aggregation of individuals. So, if we want it to be more innovative and nimbler, then we want/need them and us to be more innovative and nimbler, and that should be the focus of our outcome definition and what we’re measuring. 

I call my measurement dashboard for an organization seeking to be better at change, at innovating, the Latitude Index. It’s an amalgam of hopefully positive movement measures across multiple dimensions that measures how people (leaders, managers, employees, and customers) feel, think, behave and are able to actualize their potential for positive change, i.e. latitude. The Latitude Index looks at structural, cultural and individual components of the organization, from how aligned the leadership team is around the vision and values of the organization to how safe individual employees feel regarding their ability to tell the truth about what’s working and what’s not, and how to make it better. It looks at things like learning growth, personal happiness, definitional clarity and cross-organizational collaboration or the lack thereof. It seeks to measure not just how an organization works but how good it is at working to work better. 

For our organizations to become better at change, to become more innovative and adaptive to the swirl around us, we have to start by doing the hard work of defining what better is. And then working at each of the attributes and variables. The Latitude Index is just one approach, but it does underscore another essential truth. If we want to create new change amenable behaviors within our organizations, we have to measure the behaviors that will result in those behaviors. Including yours and mine.  

I hope this helps. I’ll be in touch next week with some follow-on thoughts.

Chris