The clash of organizational transformation and linear thinking
Many organizations continue to rely on linear thinking to address changes that are complex and unpredictable. These organizations act as if a sufficiently detailed, perfectly enforced command-and-control paradigm will enable them to properly respond to changes that are surprising and outpacing them on every front.
How, then, can leaders think of transformation on such a scale, and of such impact, that it would be adequate to steer a company through a mega-challenge such as, say, climate change? Large organizations are complex adaptive systems that constantly evolve through the actions of independent agents—from employees and customers to shareholders, regulators, and other stakeholders.
The task of organizational transformation in a complex world can be likened to that of herding cats. An extremely linear thinker, faced with 20 cats on the left side of a room and wanting to move them to the right, might pick up one cat, move it to the right, and repeat. Of course, that cat is unlikely to stay on the right side of the room, and our linear thinker is unlikely to outlast 20 cats. But it is possible to set conditions that will cause most, if not all, of the cats to end up on the right, like tilting the floor.
Similarly, leaders can set the conditions that will cause their organizations to transform, and to support the emergence of a future state that is more appropriate to today’s levels of complexity and change.
A clear purpose worthy of personal commitment
Defining a clear purpose for an organizational transformation calls upon one of the most basic tasks of leadership: to show people the way forward, and to show why the new world they are being asked to build is superior to the old. The transformation must express the possibility of a new order and must be anchored in what would be considered breakthrough results. Without this clear purpose, the effort required to successfully transform the organization will not seem worthy of commitment on the part of those required to put it into action.
Culture and business must be integrated
Because organizational transformations can seem so overwhelming, it’s tempting, and sometimes helpful, to put tasks and goals into buckets. But business and culture often get put into separate buckets—the hard and the soft—which is a mistake. Culture is simply how people think and act. It is part of every aspect of the organization. It’s impossible to work on the business without also affecting the culture.
When taking on an organizational transformation, it’s important to ask if your organization has a culture that will support the outcomes of such a transformation. This needs to be more than a gut check: ask what characteristics a culture would need to have in order to support the transformation you seek. Once those specific qualities are identified, it’s time to identify them in your culture, and create or strengthen them if necessary.
Engage with people who see the world differently
We need to actively seek out perspectives that differ from our own, and we need to build an organization that encourages its staff to do the same.
There are both formal and informal ways to do this. Essentially, this is about asking new questions and bringing together people with different perspectives. That gives you opportunity to hear from, and engage with, people who have different ways of thinking, different areas of domain expertise and different backgrounds.
In many cases, it will take an intentional effort to become more open and more engaged with other points of view. Look at your organization and how work is typically structured. When could new connections take place? Is time for that activity valued and protected? How much does your organization encourage people to develop themselves, outside of the expected professional development pathways?
Reinvent stakeholder relationships
For an organizational transformation, businesses need to reinvent the ways they work with their stakeholders. One way is reinventing stakeholder relationships to form a coalition, which we define as a group of people with different concerns coming together for a common commitment.
The potential future for the aviation industry provides one example. It’s unlikely that large aviation companies will dramatically reduce their carbon footprint if they choose to work in the industry’s traditional ways. The existing supply chain is locked into place, and it benefits from a complex web of relationships that resist change. For aviation to become significantly greener, a multitude of players will need to invent new fuels, materials and possibly business models. These will likely come from startups and others who aren’t part of the existing aviation supply chains. That means the larger companies will need to reconsider their supplier relationships and the rules of engagement that govern their work with smaller vendors.
Meanwhile, other players in the aviation industry will be undergoing their own transformations, underlining the futility of trying to plan a transformation using only linear thinking.
Do no harm, and strive to do good while creating prosperity
Over the past several years, stakeholder capitalism has created an environment in which a company can’t be only about profits. For-profit entities are expected to be a force for some good in the world, even above the obvious benefits of providing jobs, goods and services that people want and need. In a highly interconnected world, organizational transformation will need to consider the impact on all stakeholders, both internal and external.
This alignment—or lack thereof—is one way to assess an organization’s authenticity. It is an attribute stereotypically valued by millennials, but few customers, shareholders or employees would choose to interact with an organization that says one thing while it does another. The pandemic has caused both senior leadership and individual contributors to reassess the level of interconnectedness in the world. Believing that any untoward behavior can be compartmentalized away is a mindset of the past.
No organizations—or transformations—are alike
The above list is not exhaustive. There will be a small number of additional conditions that are unique to your organization and its transformation.
Organizations have developed their own tools for transformation for years, and it’s imperative that they continue to do so. Six Sigma and Lean were originally invented to meet the needs of a single company (Motorola and Toyota, respectively). What is the tool or condition that is perfectly suited to respond to the unique needs of your company? The right conditions will allow the emergence of the necessary transformations, while inappropriate ones will cause unnecessary confusion and delay. It’s up to leaders to understand the difference, and to build or adopt the frameworks that will best enable their own organizational transformation.
Marie-Caroline Chauvet is a partner at Insigniam. Insigniam is a partner of Fortune’s Most Powerful Women and Fortune’s CEO Initiative.
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