Organizational change - Going Down the Rapids

Assessing the Route

In a previous series of articles, we have written about the two kinds of fundamentally different leadership: the Neo-Taylorist one, with its inherent conviction that the future of organizations in markets can be planned, directed and controlled; and the other view of reality, that we have called Agile Lean Leadership (ALL).

ALL is an aggregation and a consolidation of the work of many great thinkers with some of our glue to bind it coherently together. ALL understands organizations and markets as complex adaptive systems with lots of independent agents (the people) each operating and changing in their own right.

These two competing leadership world-views are profoundly different, on different sides of a major fence as we pointed out. Again, we will use Dave Snowden’s Cynefin model to make sense of things.

In this new series of articles, we will explore the journey that an organization has to take in order to change to the ALL paradigm. In his book “Managing as a Performing Art”, Peter Vaill uses a vivid metaphor for the constant change, uncertainty, and turbulence that is now everyday life in organizations: permanent whitewater. We believe this is to be expected, but when embarking on the journey from a more or less Neo-Taylorist founded organization to an ALL one, there are some particularly pronounced “rapids” in this whitewater, that have to be overcome. We will call such a journey an ALL-transformation.

This series of articles will be called “Going Down the Rapids” in accordance with the metaphor. The articles will cover the outline of a route to take, as well as various methods and landmarks to look out for. This can never be a simple checklist or a set of best practices. Organizational change is always complex, and oversimplifying can only be damaging. No two organizations are the same, so the starting point for the journey will never be the same.

This first article bears the subtitle ”Assessing the Route”. It is about what to look out for before letting go of the moorings.

Of course we hope that organizations will take the first steps on the way to Agile Lean Leadership based on our value proposition and any clarifying information we can give:

ALL guides organizations to become resilient and create sustainable value for all stakeholders – through times of change; by being fast, reliable and innovative with a consistency of purpose

ALL does so by creating an environment where the individual can engage, experience fulfillment and a sense of contribution, while having the right leadership structure to stay on track and consistently execute on its purpose

The triggers for change

Organizational changes often do not just start happening; they even tend to easily stop again once started. Organizations of a certain size have an enormous amount of inertness thus making it very hard to change anything substantially. In order for something to truly change, extraordinary things must be at work. Going from Neo-Taylorism to ALL is quite a radical change; the Japanese word for this is “Kaikaku”, as opposed to the small incremental improvements, “Kaizen”. Here are a few triggers, we have seen:

Blatant crisis

By far, the most common trigger for a change in an organization is an obvious crisis. For a crisis to be obvious it almost certainly means negative financial implications. Most organizations only face up to crisis when it hits the books or the bank pulls the credit away under them. By then it is already very expensive to recover. In fact, we would argue that the main characteristic of great leadership is the ability to detect weak signals of change or challenges before they explode in a crisis.

It usually takes a crisis to motivate deep change. But that isn’t some law of nature; it’s merely an artifact of a topheavy distribution of power - Gary Hamel

Once there is open fire and not just smoke, then everybody can see the need for change and the first obstacle is gone. Some managers use this actively, provoking a crisis in order to shake things up. It is not a very attractive way in our opinion, and it is certainly more expensive to put out open fires, than quenching smoke.

The problem with crisis-induced change is, that it often evaporates once the crisis is over. One large financial institution in our territory is currently introducing Scrum and Agile for the third time in the last 15-16 years. Every time it was done in response to a crisis, and every time they fell back - the Empire strikes back! There is also a tendency for classic managers to think that the strange Agile and Lean ideas may be fine for extraordinary situations, but when it all calms down they have to get back and be serious again.

Change of Control

If an organization comes under new management or ownership, there is an opportunity to change direction. The employees sort of expect it, the bank will allow it and it can also be used as a rebranding effort with clients. A new management also has a certain honeymoon period, where it is accepted that they try things out. So it can be a good start to piggyback on the change of control.

Radical leadership

Some leaders simply want to change things all the time. They loathe conformity and find stability boring. In another age they would have gone off to find new continents, the source of the Nile, or conquer some new enemy.

It can be a great opportunity to get to introduce ALL. The trick is to make ALL so compelling, and the built-in evolution sufficiently challenging so that the organization is allowed to make this a sustainable approach. There is always the risk that in a month the radical leader has picked up a new book on his last trip and now absolutely has to try this brand new principle out.

Spotting true opportunity

From time to time the leadership in an organization will begin to see the patterns of possible improvements; they will perhaps sense some things beginning to squeak in the corners and realize that something can and should be done. We say “they” on purpose, as this scenario mostly unfolds where the leadership is already a Team in some shape or form. Different people intuitively have an eye for different perspectives and spot potential.

This situation represent the most fertile ground for a transformation. There is a basis for real exploration, objectivity can probably be sought, and if there is real concern for value and improvement then there is a “better chance than average” for doing some good.

Working with an organization like that can be highly rewarding and should be treasured.

Understanding the present

The first step when attempting a change in the complex domain is to understand the present as well as possible. Since interventions in the complex domain are experiments by nature, where we need to verify if our assumptions about initiatives are correct or not, we need to be able to detect change from the present.

There are many ways to acquire a good common understanding; many workshop methods can be deployed. One of our favorites is the so-called “Future Backwards” exercise described by Dave Snowden. It consists of a group of people working together to find:

• The current state, 5-9 narratives, describing where we are now.
• An ordered series of important events that led to the current state.
• A heavenly state (5-9 narratives) that describes how things would have been now, if we had it our way.
• A series of plausible events linking into the past (not the present) and leading to the heavenly state.
• A state of absolute hell, a situation everybody agrees they would hate to have seen.
• A series of plausible events linking into the past (not the present) and leading to the hellish state.

At the end of the session, the group will have an elevated understanding of the current situation and will also understand what direction they might want to go in, and where they don’t want to go. They can then start to think about interventions and initiatives that move in that direction, and because of the illustration below, they also now have a better idea of plausible cause-and-effect relations so far undiscovered.

Read more at Dave Snowden’s website here…

The vision for the transformation

Any initiative deserves to have a properly stated vision, so does an ALL-transformation. We always liked the 4W pattern for communicating a vision:

A catchy, memorable statement expressing the value proposition followed by:

• Why - the identifiable values to be harvested through the initiative.
• Who - the people experiencing the benefits and the values achieved.
• What - the different components or elements of the solution.
• When - important milestones in the roadmap of the initiative.

Let us look at each part:

Why

Very often things are started in organizations without really being clear on the desired outcome, or at least without all parties involved understanding why things are being done. Remember, in the complex domain people are bound together by common values and vision, not by rules and regulations. People are motivated intrinsically by a combination of purpose, autonomy and mastery. It is a key prerequisite for success that the organization is reasonably aligned on “why” they embark on the journey.

Even when good work is being done upfront and the desired outcome is made clear it often happens that no one really looks at the actual results en route. Sometimes when an initiative is over, an evaluation is done; it often bears the revealing name of “post-mortem”. This is suboptimal as the value has to be regularly inspected so that adaptation can be carried out if needed.

It is of vital importance to watch carefully how the value develops on the way down the rapids. There is no fixed, ideal end-state to reach; there is only clever movement in the right direction. The question is how to verify, is everybody on the right track? Are the assumptions correct? Do the implemented enabling constraints work as expected? Remember this is the complex domain, everything is by nature an experiment, where the outcome needs to be monitored.

Who

This may seem to be an obvious point. An organizational initiative is for everybody; the whole organization. However, each person should preferably be able to see how this initiative will affect him and hopefully improve things for him. It is vital to be clear on how each person or group of people will be affected.

As we shall see later, some may feel exposed or even threatened by this journey. It is better to deal with it upfront than to just let things happen and then come as big surprises. Even worse, of course, is to manipulate some people into believing in some false benefits for them.

What

Try to come up with a few explanatory statements about the major elements of new ways of operating, like building teams, using circles as the building block, new artifacts, new ways of interacting and escalating etc. They should be so few and so clear that people readily can tell the story about how the organization is changing currently.

When

Whenever an initiative is launched there are constraints to what can or should be done. Many of those constraints typically exist in the time domain. Certain things cannot be started before a certain time and other things need to be completed by another time.

This is always important; but in our opinion even more so when the initiative is one of organizational change. A key quality for everybody in an organization is psychological safety; part of that is to know what is expected of everybody. With a modicum of discipline the timing aspect is manageable.

It is much better to state the start time and a set of milestones, where a solution to certain challenges will be found than to state an exact end-result. We may not know exactly what the solutions are; they will emerge; remember we are in the complex domain. It gives everybody a clear expectation of when to expect more earth-shattering activities and changes and when to expect consolidation and smaller constant improvement steps.

In this respect such an organizational journey is handled the way of agile projects, typically fixing the timing and the level of investment, but letting the scope vary as the situation unfolds and understanding of reality improves.

The ALL Canvas

The 4W pattern has many parallels with another concept that has been popularized the last few years. It is called the Lean Canvas and is a simple template for working with business plans, especially for startup companies. The basic idea is however very useful also in other situations. We have used it to put structure to everything from whole companies, projects, down to individual feature epics in products. It provokes communication and interaction; the technique will be covered in detail in a later articles.

We also use a variation on this theme called the “ALL Canvas” for capturing the top-level vision for an ALL Transformation. The ALL Canvas is an A3 paper like this:

The idea is to work through the canvas starting with the section numbered “1” and ending with “7”. The section numbered “0” is for capturing all those concerns about constraints and risks that typically pop up during such a mental workout.

The reader will immediately recognize the 1. Why, the 1. Who and the 3. What sections from above. The canvas contains some extra fields to capture more important insight:

2. Value Proposition. A short, sweet and to the point statement summing up the reason for embarking on this journey and giving people reasons to participate. When someone asks: “Why are you doing this?”, this statement should be a reflex response from everybody.

4. How - to Introduce. A description of the top level steps planned to be taken to first of all inform people about what is intended, get them involved, their input and finally their support.

5. Cost Expectation, Value Expectation. Any serious initiative deserves a business case. Will sufficient benefit be harvested in relation to costs incurred (time, money and other resources)? We also recommend to try and be as specific as possible about cost of delay of certain parts of the initiative.

6. How - to Measure. Any initiative in the complex domain is an experiment, organizational changes are not exceptions to this. It is solid practice to secure feedback loops to ensure that the initiative is heading in the right direction. So the question here is how it is possible to get indications early on whether the initiative produces desirable results (which should be amplified) or undesirable ones (which should be dampened). If some of the assumptions prove to be faulty, then it is better to pivot quickly or stop altogether.

7. Because - Rationale. This is a list of the reasons to believe the initiative will produce desirable results. Perhaps there is evidence from other situations? Perhaps there is reason to believe that a solution known from another domain will work here? The solutions should be coherent and plausible, that is, consistent with the fragmented knowledge already possessed.

Conclusion

An ALL Canvas should be made rather quickly; it should be possible to tell the story to stakeholders, colleagues and advisors quickly and simply. It is important to enter a series of iterations where feedback from relevant people is secured. It is unlikely that the first hipshot will be an optimal one. It is also unlikely that a way forward can be designed without the insight of the people who will be practically involved.

During these iterations it is more than likely that considerable detail comes to the surface. All of a sudden people have a lot to say. “You only know what you know, when you need to know” says Snowden, now there is a need to know and the subconscious part of the brain erupts with insight. Try and capture these details for the next phase of building a backlog for the ALL initiative.

The actual building of the backlog is a topic for the next article, but in closing this one let us look at something else that often surfaces during these ALL Canvas iterations: Resistance.

Resistance

The biggest risk in an organizational change is practically always the resistance from individuals and groups. Human beings are mostly uncomfortable with change; there seems to be a conservative bias dragging us towards following rules and regulations instead of constantly observing, assessing and navigating. In some ways it is understandable as it is mentally more challenging to be on the alert and trying to make sense of things all the time, but this approach is also more rewarding and provides people with a sense of growth and mastery.

There will very often be resistance to a transition to ALL principles. Many people’s jobs will change, some profoundly; communication will flow along different channels and decisions will be made differently. Here are some examples to look out for, some dangerous rocks down the rapids; some are visible and some are under water, only revealing themselves in the cross currents they create.

Defending control, power or prestige

Through all the years working with these transformations of teams and organizations, by far the biggest challenge has always been people resisting changes because they protect their own position, their turf. In a way this is a very sad thing, but one that we have to face up to. No amount of management literature, reasoning or psychological manoeuvres can make this fact of the human being’s natural tendency to be self-serving go away.

Since a blatant self-serving attitude is normally not appreciated in our society, the arguments encountered against a transformation will rarely be directly addressing a potential loss of position. More often we find people expressing concern over loss of continuity, efficiency, next quarter’s numbers or quality of service.

Very often the concerns come from middle managers, and that is understandable. In an organization with deep hierarchies, going to a team-based Agile Lean structure will reduce the classic top-down reporting hierarchy. Actually, it doesn’t seem to follow that the need for people will diminish, but rather that they can do much more than before; however, jobs - especially for the middle managers will change.

Our western culture has, in the last 40-50 years since the breakthrough of Neo-Taylorism, adopted a dominant view of management as something detached from and superior to actual work. In fact, this is just a return to old views from the days of the feudal societies with nobility and peasants. Management is promoted by popular culture as something above work and a desirable and superior position to be in. That is of course; unless you hold the opposite view and consequently almost demonize leaders. So we have a very unfortunate polarization in popular culture that is often stuck in people’s mind; this makes it hard to conduct an organizational transition with objective and rational arguments. There are too many hidden emotions and unspoken conflicts in play.

People who exhibit this kind of resistance will often hold a view of the world and the organization that more or less fits with the Obvious domain in Cynefin terms, with a dash of Complicated perhaps.

We will deal with some ideas for how to overcome this in later articles. But one thing to state very clearly here, is that a clear path for purpose, growth and mastery plus a certain autonomy (the key aspects of intrinsic motivation) must be shown also to middle managers for them to embrace any change.

We would hope that the prospect of increasing the value creation in the organization could appeal to such people. If not, well…, there might be people in an organization that really derive their sense of accomplishment from either their ability to boss others around or from purely bureaucratic activities. They do not fit in an organization working in the complex domain trying to find solutions and adapt to discovered challenges.

Defending skills-based ivory towers

A variation of the above is often found in large, typically older, knowledge-heavy organizations. When there is a large body of deeply competent technical experts like engineers or computer scientists in an organization, towers of experts have typically developed. It can be very hard to get people in such towers to participate in teamwork in an ALL organization. They will often resist, as they feel it erodes standards of competence. This may be a genuine concern or a better sounding cover up for a more classic protection of own turf and influence.

This has to be dealt with. Either these people must be challenged and inspired by the opportunity to produce more and better results and intrinsic motivation, or if their skills are currently irreplaceable, a compromise of working with them as single experts (one-man bands) can be considered.

Distrusting people in lower ranks

Occasionally, real old-style managers are still encountered. They strongly believe that people just need to be controlled minutely in order to create any results, and the employees should be given very specific task based instructions. It follows that they believe that more or less perfect plans can be made and executed. They are therefore very reluctant to bestow power on Teams and to try the distributed decision power structure in ALL.

This is by now quite rare to encounter openly in western societies where this “doesn’t sound good”, so the more subtle kind mentioned above is more prevalent.

If an organization with such a leadership operates firmly in the Obvious domain, the advice is probably just leave them alone, they may not need ALL. The question is of course, how long that situation will last; not many organizations (outside government or other monopolies) can stay comfortably in the Obvious domain for a long time.

Otherwise, we have no recipe for transforming such an organization, it is firmly located in the Zone of Complacency. Just wait until a crisis develops, perhaps someone will pick up the tremors and start moving before a sudden collapse into Chaos; maybe then a change can be attempted.

No interest in results

The final example of resistance here is one of passive resistance. In organizations where there is little passion for the results generated, it is hard to introduce ALL. We have come across people who said: “Sure, we will attend, but just tell us what to do, and we will do it”. It has often been old organizations, some of them monopolies, with no external challenges to keep everybody on the alert; a quiet acceptance of mediocrity has set in, and every day is series of shades of grey from 9 to 5.

If this is a dominant attitude in an organization, it is probably better to wait for a crisis to unfold, then there will be motivation for change. If it exists as an isolated corner in the organization, then there are other ways to try and break that protective shell of complacency. It can even be conducted with respect for parties involved; but more on this later.

Postlude

So we have looked at the route, prepared well, we know undercurrents and underwater rocks will be down there, but let us embark on the journey. Stay with us on this channel as we let loose, watch out for next week's episode.