Transformational change: what to do?

Are you feeling discouraged and tired? You're not the only one. The global challenges are overwhelming and the pace of disruptive change is accelerating. Organizations and professionals are running to keep up, learn and innovate. Uncertainty, turmoil, despondency, and exhaustion are part of the equation. This period is tough, but also special. "We are the lucky ones who are experiencing a change of era," says professor Jan Rotmans, professor of transition science and sustainability at Erasmus University.?

In this article, we’ll look at the crisis as an opportunity. See how you make a difference and understand the S-curve of transitions. Organizations can make a positive contribution if they focus on agility and resilience. That’s why organizations need a positive organizational culture with a positive purpose.

"We are not living in an era of change, but in a change of era,” according to Rotmans. "That creates turmoil. But chaos is necessary for complex systems to move toward a transition." In his new book "Embrace Chaos," written with Mischa Verheijden (only available in Dutch, to date), he offers a realistic but also positive perspective.

Crisis and chaos

Many systems no longer function well. We have a financial-economic crisis: the financial sector is four times larger than the real economy and financial values take precedence. In addition, an ecological crisis: loss of biodiversity and climate change. Also a moral crisis: through globalized trade, travel, food, and how we treat the planet, we use others and natural resources as means. We take but don’t give back. In capitalism, the human dimension has been lost. We have created cold systems: we live in a "spreadsheet society”. The Edelman Trust Barometer has been showing declining trust in governments, companies, and media for years. Trust is also low on democracy. Divisions and inequalities are on the rise.

We also want to limit global warming to a maximum of 1.5 degrees. At 2 degrees, the Arctic ice is gone, all the coral dies, and sea levels rise 20-30 centimeters. By 2050 greenhouse gases must be reduced to zero, so within thirty years we must get rid of oil and gas, we must stop using coal and start reforesting in ten years. These are stark figures for a world that runs 95% on fossil energy. If we continue at the current rate we will end up with 3-4 degrees of warming. If we pull out all we can there is a small chance global warming stays at 2 degrees. Hence, Rotmans identifies ten major needed transitions in the fields of energy, raw materials, the economy, circular, financial education, healthcare, democracy, agriculture, and spatial planning.

You, too, make a difference

Rotman's book resembles Otto Scharmer's work Leading from the Emerging Future. Rotmans also emphasizes how change emerges as a "social movement" that can grow exponentially. The linear top-down model of change management doesn’t really work. We have to rely on bottom-up movements; people who show how things can be done differently and who are copied by others, influencing outdated ways of thinking and thus slowly but surely bringing about transformational change. This is how I facilitate organizational culture development: by engaging the social movement, the influencers, and the copy-coach-correct dynamic between people.

Rotmans' vision and mine coincide. When you work on organizational culture, you work with a complex system that can react unexpectedly. Culture cannot be managed as a project but involves a collective and individual learning process. Everyone's individual contribution influences the thinking and actions of others: culture is something you create together. This also happens in large organizations, because people in teams influence each other and so real change starts. Real change is only successful if you persevere and get a social movement going.?

Rotmans also mentions the illusion of powerlessness in large organizations or systems. Structures and systems influence people but people can also influence the structures and systems:

• Think stationary and you underestimate your power.
• Think transformative and you see that you too can make a difference. The direct effect may be small, but the indirect effect is meaningful.

Crisis as an opportunity

A crisis serves as an opportunity in a complex system. Especially in chaos, you can achieve change with a smart energetic group. Moreover, every crisis helps, because about 5-10% of people start thinking differently. At 25% you reach a tipping point in systems, also in organizational change. After the first quarter of people, change can continue exponentially. So hang in there, because it takes a while for the first 25% to start thinking and acting differently.

That's not always easy for impatient people like me. But zooming out to a longer timeframe helps to prevent cynicism: a transition takes one to two generations. First, people have to become aware of what is going on, then change their opinions and beliefs, next their behavior. For example, smoking went from cool to not-done, and that took fifty years. We need time, but we also need swift action given the urgency. For a transformational change in organizations, we need about ten years.

Transitions develop in an S-curve:?

1. Pre-development: innovation and experimentation,?
2. Tipping period or interim: chaos, uncertainty, disagreement, and yet you have to make decisions,?
3. Development phase: of the dominant new ways of thinking, doing and being

Moreover, a transition cannot be managed. Like organizational culture development, it is not a project but a process. It is not goal-oriented but goal-seeking: the result arises in the course of doing and evolves because you adjust and navigate and look for what works in reality. You cannot design this in advance on paper. Don't start with a broad top-down program, says Rotmans. Start "deep" and fast and bottom-up: start experimenting with those who want to.?That's what works with my clients, too.

Think long-term and persevere

Whether we reason as an individual or as a company, we must learn to think differently. We all need to own less, consume less, and pollute less. But consuming less must be done in a broader context: we must define economic growth differently and start making money differently. Maybe not by selling products, but by selling services as a product. You can lease your couch, rent your fridge and share your tools - and return them when you want something different. Degrowth will make us creative and resilient.

Actions and interventions by individuals have an effect. The direct effect is still small for starters, but you do have indirect effects. So look at the long term, then you will see the change. Think of Occupy, the yellow gilets movement, MeToo, Black Lives Matter: all these movements influence the thinking of the mainstream. Rotman’s advice is to unite in a group as you can achieve more together. Look at Greta Thunberg, Urgenda, Roger Cox, Boyan Slat: they too started small. Keep that in mind, just like with culture improvement: every action counts, and every interaction influences the culture. Small interactions influence others and can go "viral" exponentially. So, be patient and persevere. Do what you can as an individual: choose an issue (social, environmental, bureaucratic/systemic) and commit to it.

Future-proof organizations

Organizations can make a positive contribution to the transition. Rotmans sees a crucial role for them, as does Paul Polman in his book Net Positive. But organizations will have to change quickly. Governments and companies are now insufficiently agile, resilient, and therefore not future-proof. They need to think (culture), organize (structure), and execute (practice and methods) differently.

I see this in my work too. Many organizations are too focused on the Control and the Compete culture types (see the Competing Values Model of culture). Everything is about profit, efficiency, production, and return on investment. Planning and control, leading from spreadsheets, and social engineering are key. Many organizations use top-down pyramid thinking, where the top decides, decisions only slowly make their way down and reporting and meetings are the norms. I am exaggerating a bit, but you probably recognize it. This control-focus takes time and energy that is not spent on innovation and change.?

In nature, resilient systems that learn from a crisis have buffer capacity for unexpected circumstances. But because of the emphasis on efficiency and short-term output, many of my clients have little buffer capacity - especially in time, attention, and energy. Let alone space to think further ahead. Research by Rotmans, Loorbach, and Lijnis shows that only 5-10% of mid-sized companies are transformative, 15-20% proactive, and 70-80% are reactive. A transformative company picks up signals from outside and quickly translates them into new concepts and business models. These are still the exceptions today. Future-proof organizations need agility and resilience.

Rotmans defines agility as being organized without much overhead and bureaucracy. You have a learning organization that records what you learn and translates that to people and projects. You bring disciplines together, work with trust, and give employees responsibility and room for development. You understand your clients. But current organizations score especially low on "trust, a learning organization, and understanding customers". What is often missing is a positive organizational culture, as I describe in my book Developing a Positive Culture. For that, you need the four elements of positive thinking & deviance, positive purpose, connection & collaboration, learning & autonomy. (More on that in the last paragraph of this article).

Resilience means: being future-oriented, where you can deal with structural uncertainties. Also, unlikely events with a great impact might happen. Think of the pandemic, for instance. You need buffer capacity for this; you must be prepared for different scenarios so that you can switch quickly and scale up.

In a future-proof organization, continuity and change complement each other. You do what you always do: that is the bottom line with which you earn money and add value. In addition, you invest in a second line and look at what has potential. If a second line becomes viable, more budget shifts toward it. This is how to innovate and build and change.

Positive examples

It can be done: DSM transformed from petrochemical to fine chemical to biochemical company, to medicine, and now to biomass and health. Ikea?is working on a transformation from sustainable to circular. Ikea has its own wind farms, solar panels, LED lighting, and sustainable food in the stores. But Ikea must address the "disposable culture": cheap furniture that you replace quickly. Their real challenge is resource consumption. Ikea consumes 16 million cubic meters of wood per year: 1% of global wood production. Even the packaging material is not yet recyclable. The raw material transition will be their true transformation. They might turn from selling furniture to renting raw materials, to return after use and to be recycled into other products. Ikea wants to be circular with wood, paper, and plastic in ten years. Possession is increasingly shifting to use; we are going to rent, lease, share and borrow.

A positive impact on people, environment, and surroundings is part of a positive culture. Companies extract value from their environment: raw materials, energy, and knowledge. What do they give back in terms of value? And what is their contribution to the environmental, social, and bureaucratic challenges we face? This is what companies, and their investments, are increasingly judged on. NN IP research among 15,000 listed companies shows that 3,000 have a positive impact. They reduce CO2, work circularly and take care of employees. These companies have higher sales, grow faster, and offer higher returns than companies without a positive impact. This is the business case for transformation. How far along are you?

Positive culture with a positive purpose

As a company, you can start developing the four elements of a positive culture: positive thinking & deviance, positive purpose, connection & collaboration, learning & autonomy. Culture is the foundation and?supports the necessary changes in structure and practices.

Although you need all four, you can start by strengthening your positive purpose. A shared, positive purpose is what gives teams and organizations wings. It is not a goal, but a long-term, meaningful purpose that serves a greater whole than yourself. It is a higher mission - but not a mission statement on paper. Such a positive goal inspires thinking and doing, all actions and interactions, decisions, and priorities. It is alive. A positive goal focuses on possibilities, not limitations. It positively formulates what you want to achieve (not what you want to avoid) and what you can do yourself (not what is beyond your control). A positive goal makes a positive contribution to ecological and social issues. As a beneficial side effect, you will also find that performance and financial results respond positively!

? Marcella Bremer, 2022