The Learning Curve of Change

In my discussions with nonprofit and social impact leaders over the last few years, I found that a common issue preventing them from moving forward with new, innovative ideas was the fear, uncertainty, and doubt (FUD) around how those ideas will be received by the broader organization. While it is important to recognize and validate those feelings, leaders cannot allow themselves to be dissuaded from taking action when it’s in the organization’s best interest.

Let’s explore the hypothetical adoption of an Agile Deployment structure for the Marketing and Communications (MarComm) team of a nonprofit organization. The MarComm team was tasked with creating more dynamic, timely, and engaging content to boost brand awareness and website engagement. To achieve these strategic goals, they collaborated with an organizational strategist who suggested a set of innovative ideas.

So, what should leaders do? Research from 麦肯锡 (1), 波士顿谘询公司 (2), and Professor of Economics C?t?lina Radu (3) reinforces the idea that the more organizational trust there is and the more inclusive the process is, the easier it will be to start to exploit the value that has been created by innovative ideas. Let’s take a look at The Learning Curve of Change (fig. 1).

The Three Components of The Learning Curve of Change

The Parameters

First, we have our parameters: Time along the x-axis and Change along the y-axis. When we think of innovation, we will always be hemmed in by time (unless you’re a fourth-dimensional being) and the overall effect of the change.? In this scenario, we’re focusing on our MarComm team’s shift to an Agile Development model, with the goal of positively impacting key metrics like revenue, donations, engagement, or legislative victories. It’s important to recognize that the impact of this change can be either positive or negative (which we’ll explore further below), depending on how well the innovation is implemented and adopted across the organization.

The Change Curve

Next, we want to look at the Change Curve. The Change Curve is a function of our parameters (variables) — Time and Change. The Change Curve is a line that stands in for the whole array of practices, processes, and people that are being affected by this idea. These practices, processes, and people (or, the entire organization depending on the size of the innovative idea) can either maintain the status quo or can be changed.?

The Change Curve goes through four distinct phases. First, it starts to move once Innovation begins. At first, nothing changes and the organization remains at the status quo. Then, we go through the painful part of the change when the idea is Disseminated to the organization and it is then Institutionalized by the organization. And, it ends once we are able to Exploit the value created by the innovative idea.

At first, nothing happens because the idea has simply been thought of. But, once the idea begins to be disseminated to the wider organization, pain will start to be felt as the idea works its way throughout the organization. Then, once the idea has been fully disseminated, we reach the nadir of the pain. We can then start to institutionalize the innovative idea. The idea gets fully subsumed into the people, processes, and technologies of the organization. Finally, our idea has moved up and beyond the status quo and we are able to realize those gains once we’ve fully recovered from the painful part of the change.

The Painful Part of the Timeline

There is no way to avoid some amount of pain during a change. This pain can be felt most acutely during the Dissemination and Institutionalization Phases, because this is when a new idea is at its most disruptive to an organization without having demonstrated any realized improvements. But, you’ll notice that the Dissemination Phase takes us to our nadir and the Institutionalized Phase brings us back out. Understandably, our goal here is to minimize the amount of time we spend in these two phases. However, leaders can find themselves trying to move too quickly through this zone (it’s a trap!). We can feel pressure to assume that the idea is so great that everyone will be on board or that the idea is so obvious that everyone will understand why we are making the change. And then, during the institutionalization phase, leaders can spend too much time on standard operating procedures that were developed without the input of end users.?

Looking at our MarComm Team example, we want to be sure that we do three things to ensure that we minimize the amount of time we spend here.?

1. First, we want to have established organizational trust with our team so that ideas can disseminate quickly and thoroughly.?
2. Next, we want the innovation process to be far-reaching and transparent so that all team members can both contribute and understand how certain ideas are moved forward.?
3. Lastly, we want to recognize that there will be a period of pain and we will need to create a psychologically safe environment that will provide individuals with a brave space to learn and grow.

So, what can we do as leaders?

Organizational change moves at the speed of organizational trust

In his book The Speed of Trust, Stephen M. R. Covey introduces the concept of Cultural Trust, which refers to the collective confidence within an organization that leaders and team members will act with integrity, transparency, and competence. This kind of trust is foundational for smooth adaptation to new ideas and fosters an environment of open communication and collaboration.

Cultural Trust is not just about believing in the honesty of colleagues; it’s about having faith in their abilities and intentions, creating a brave space for innovation and risk-taking. When Cultural Trust is present, organizations experience less friction during transitions, as employees are more likely to embrace changes and work together effectively. This trust reduces resistance to change and enhances collaboration, making the dissemination and institutionalization phases of change less painful(1).?

Rushing through these phases without building trust can lead to misunderstandings, decreased morale, and a lack of alignment. Conversely, taking the time to build trust ensures that employees feel valued and heard, which can significantly ease the process. Trust acts as a buffer, allowing the organization to absorb the shocks of change more smoothly and maintain a cohesive, united front. This, in turn, minimizes the disruption and discomfort that often accompany significant organizational shifts, ultimately leading to a more successful and sustainable transformation.

How To Build Organizational Trust

Prioritize Diversity and Inclusion

We can start by building our organizations on foundations of diversity and inclusivity. Research from McKinsey(4) and Boston Consulting Group(2) shows that organizations that prioritize diversity and inclusivity perform better than peers that don’t specifically prioritize these traits. And, in fact, organizations that don’t prioritize diversity and inclusion find themselves falling behind. This makes it an easy choice for leaders. So, spend the time to build teams that are representative of the stakeholders of your organization. Make sure that individuals are both seen and heard. And be sure that your words and actions are aligned. For our MarComm team, we have worked to build a team that accurately reflects the communities that our organization works directly with. The team lead has also spent time building individual trust with and between the team members and encouraged an environment where individuals can constructively argue about ideas and then come to consensus to move forward as a team.

Recognize the pain

Loss aversion is real. Pains are felt more than gains —generally about a 2:1 ratio!(5). Since we know this, it's crucial for leaders to acknowledge that a part of the process will be painful. At the same time, we can make sure to demonstrate that the gains will be much greater than the pains. What does that look like? One of the key steps is to show quick and early success. This can be done by running an experiment of the idea. Assuming that the results of the experiment showed that the gains were greater than the pains (and, if it didn’t show that, let's go back to the drawing board); we can use that as evidence that our idea will improve the overall standing of the organization once implemented.?

Additionally, one of the key steps we can take is creating a psychologically safe organization that allows folks across the organization to discuss and address these pains openly. Research indicates that creating an environment where employees feel safe to voice concerns without fear of retribution enhances trust and collaboration(3). Dimitri Antonopoulos , Managing Director of transformation consultancy Tank, has a great framing for why we want to create Brave Spaces (as compared to Safe Spaces):

“Brave Spaces provide for us an idea and a framework, where we can genuinely engage with one another with all the mess and contradictions of our lives show up as our authentic selves, and ensure with this discomfort comes the necessary ingredients for us to grow.”

As our MarComm starts the process of disseminating the Agile idea throughout the organization, they can proactively communicate the vision to stakeholders by framing the idea with the gains in the forefront. This avoids forcing team members to play catch-up, which carries the risk that individual stakeholders may focus only on the negatives. They will also want to have a clear iterative process for institutionalizing the idea as soon as it has been fully absorbed by the organization. This should involve focusing on power users and advocates to get folks excited, working closely with potential blockers to ensure their thoughts and feelings are recognized, and having their executive sponsor champion this idea throughout the C-Suite and Board.?

Utilize Design Thinking

“Design thinking helps democratize innovation by providing a common language and a problem solving methodology that everyone can use to create better value for the stakeholders they serve.” (Dr. Jeanne Liedtka , University of Virginia) By implementing design thinking at the outset of our innovation journey, we can give more individuals at our organization an opportunity to innovate. Innovation is no longer the domain of the solitary genius (if it ever was…). Instead, innovation comes from the bottom-up, middle-out, and top-down. Organizations that prioritize a culture of innovation are more successful than their peers at transforming their people, processes, and technologies(3).?

In addition to fostering a culture of innovation, design thinking also emphasizes empathy-driven approaches, which are crucial in understanding and addressing the real needs of stakeholders. And, this process deepens the trust that we built earlier in the process. This methodology involves deeply immersing oneself in the experiences of those affected by the problem at hand, leading to more human-centered solutions. By conducting interviews, observations, and user testing, organizations can gather valuable insights that inform the development of more effective and relevant interventions. Furthermore, design thinking encourages iterative prototyping and testing, allowing teams to experiment with new ideas, learn from failures, and refine their solutions continuously. This iterative process not only helps in developing better products and services but also cultivates an organizational mindset that embraces learning and adaptability. In the nonprofit sector, where resources are often limited, design thinking provides a structured yet flexible framework to maximize impact, develop strong cultures, and create meaningful change. By leveraging the collective creativity and insights of diverse team members, organizations can develop innovative solutions that truly resonate with their communities and stakeholders.

Innovation is a journey that inevitably involves some level of discomfort and pain. However, by strategically managing this process, leaders can minimize these challenges and maximize the benefits. By focusing on these strategies:

1. building organizational trust,?
2. prioritizing inclusivity and diversity,?
3. recognizing and managing pain,?
4. and utilizing design thinking,

nonprofit leaders can navigate the complexities of change more effectively, leading their organizations toward greater impact and sustainable growth.?

Innovation, when managed thoughtfully, can transform challenges into opportunities, driving meaningful progress in the social impact space.

References:

1. Ellsworth, D., Goldstein, D., & Mahadevan, V. (2021, November 15). Why inclusion matters—and how to foster it. McKinsey & Company. https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/the-organization-blog/why-inclusion-matters-and-how-to-foster-it
2. Lorenzo, R., Voigt, N., Tsusaka, M., Krentz, M., & Abouzahr, K. (2018, January 23). How diverse leadership teams boost innovation. Boston Consulting Group. https://www.bcg.com/publications/2018/how-diverse-leadership-teams-boost-innovation
3. Radu, C. (2023). Fostering a Positive Workplace Culture: Impacts on Performance and Agility. IntechOpen. doi: 10.5772/intechopen.1003259
4. Diversity Wins - How inclusion matters McKinsey & Company
5. Kahneman, D. & Tversky, A. (1992). "Advances in prospect theory: Cumulative representation of uncertainty". Journal of Risk and Uncertainty. 5 (4): 297–323.

About the author

Benjamin Childers is CEO & Co-Founder of Stratovation Partners, a strategy and innovation firm that focuses on modernizing nonprofit and social-impact organizations by focusing on their people, process, and technology so they can grow sustainably in the 21st Century.