Webinar Recap: Change Management in Today’s Evolving Business Landscape

The Risk Institute’s January 27, 2021 webinar, Change Management in Today’s Evolving Business Landscape, focused on the following question: What are the timeless elements of success that are going to endure, and where do we need to be open to change, to ensure that our organization emerges stronger from the pandemic, not weaker? One thing is certain, the pandemic has made it increasingly clear that the great companies of tomorrow are not going to look like the great companies of yesterday.

Executive Director Phil Renaud moderated the session, which featured guest speaker Richard Jolly, a consultant at Stokes & Jolly Ltd and professor at the London Business School. Jolly provided research-based insights into how organizations need to evolve and predictable mistakes that can prevent them from adapting. What do we need to do in the short term to cope? And what are the considerations in the longer-term, to ensure we emerge from this once-in-a-lifetime experience more robust and more resilient?

Corporate Inertia

Jolly kicked things off by discussing corporate inertia, a term used to describe an established company that remains rigid in its thinking and actions rather than being open to changing industry and company dynamics. Put simply, it’s easy for company leaders to become complacent when things are going well. In the past decade, this phenomenon has led to the demise of companies like Blockbuster and Kodak. Despite having strong teams, capital, and the capacity for new product development, these organizations fell victim to corporate inertia.

To counter this, organizations need to be adaptive and flexible, agile, and open to change – which is complicated but more vital than ever. As Jolly reminds attendees, “we like when we are doing change, but don’t like when change is being done to us.” This is particularly relevant when we consider the business environment that many organizations are operating in today, summarized by VUCA: Volatility, Uncertainty, Complexity, and Ambiguity.

The Elephant and the Rider

To help understand why organizations struggle with behavioral change, especially when times are tough, Jolly framed his discussion around an analogy first introduced by psychologist Jonathan Haidt: The Elephant and the Rider. Haidt argues that we have two sides: the Elephant, which is emotional and visceral, focused on immediate rewards, and motivated by what it wants (the Elephant is also much larger and powerful); and the Rider, which holds the reins and seems to be the leader, is focused on long-term goals, and knows what it should do (the Rider is also rational, calm, and cognitive).

The third component of the analogy is the Path, which can serve to confound both the Elephant and the Rider. The Path, though, can be altered to make the “right” behaviors more likely – the path of least resistance – and the “wrong” behaviors require more effort, therefore less likely to occur. Jolly classifies the Path as an agent for change. It directs the Rider and makes it clear what critical changes in behavior an organization is striving for – a la the direction management wants an organization to take. When shaping the Path, executives need to ask themselves, “what can we tweak in the environment to make change easier?”

All of this is particularly relevant given that, according to Jolly, 70% of change programs fail and some 95% of employees are unaware of or do not fully understand the company strategy. In the same vein, in an anecdote taken from his consulting work, Jolly says that when employees are asked, “what is the one thing your boss wants you to work on?” many can’t give a concrete answer.

The Path, then, also represents sustained, clear, and functional communication – a vital component of change, from the C-suites to the shop-floor. However, with the pandemic and associated changes to routine and daily operation, such as the pivot to remote work, it can be more challenging for associates to maintain that same level of connectedness. The firms that will emerge more successful, Jolly says, will be the ones that find innovative ways to maintain that vital connection between associates.

More to this point, Jolly reminds attendees that what might looks like resistance to change is often a lack of clarity. What might look like a people problem is often a situation problem. And what could be perceived as laziness is actually often emotional exhaustion. The pandemic has only served to heighten fatigue and “brain fog,” two phenomena that, especially in comparison to previous generations, were already prevalent in today’s “always-on” business environment.

The Confidence Spectrum

Moving forward, Jolly, in what he admits is a “slightly provocative” statement, says that strategy is dead as an academic topic because those that fail today often had the right approach but simply couldn’t make it happen. Why? It usually comes down to culture, he says. More specifically, they can’t execute on strategy because of something Jolly calls the Confidence Spectrum.

Great companies are ones that spend more time in the middle of the spectrum, rather than bouncing to the extremes, especially through difficult times – think aforementioned VUCA. Jolly identified seven characteristics of confident organizations:

  1. A sense of purpose/shared cause: Inspire people to feel an emotional connection beyond themselves.
  1. Leaders model desired behaviors: How you behave defines the culture of the organization. Be the change you wish to see.
  1. Everyone feels they can contribute: Employees want a sense of feeling part of the end goal. Play to their strengths. Foster a sense of “we.” 
  1. Collaboration/challenge and support: Everyone, regardless of background, has their own capabilities and role to play.
  1. Trust/treat people as adults: Be perceived as worthy of trust. Do associates see you as someone they want to follow? 
  1. Two-way communication/listen: Cascading information does not work. The best ideas increasingly happen as far as way from the CEO’s office as is possible, where employees can experiment and take risks.
  1. Create an energized context: Revitalizing people has less to do with changing people and more to do with changing the context that companies create around their people.

 

Fostering Human-centric Context

Over a hundred years ago, when business schools were initially developed, their focus was solely business administration, a command and control style of management, basically, how to supervise and manage. Times are changing, says Jolly, and organizations are evolving into more human-centered environments, where people are honored for bringing their whole hearts and minds to the job. Now, more than ever, organizations need to create a context where everyone is working together towards the goal and driving the change collectively.

Jolly advises that changes in behavior do not come from a purely transactional relationship. And while change performance metrics and KPIs are necessary, he says, the answer is increasingly less cut and dry. Executives do need to pay attention to the technical aspects, but they also need to pay attention to the emotional ones, the human metrics.

Ask yourself: What does it feel like working for you? What do we need to do today to make us successful in the future? Thinking back to the Elephant and the Rider, how do you motivate the Elephant? How will you get inside people’s identities and passions to make them feel the change?

Traditionally in risk management and decision making, we are told not to take unnecessary risks. But Jolly reminds attendees that organizations are more resilient than one might think. He likens them to gardens, that are likely to flourish under the right conditions. In fact, in the second half of their career, executives are more likely to fail because they are being too careful or trying too hard to avoid making mistakes, rather than the other way around.

“Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do. So throw off the boat lines. Sail away from the safe harbor.” – Mark Twain

The next Risk Institute webinar, Data Ethics and Emerging Trends, is scheduled for February 17, 2021. This webinar will feature discussions with Dennis Hirsch, Professor of Law and Faculty Director of the Program on Data and Governance, and Aravind Chandrasekaran, Associate Dean of Executive Education at Fisher College of Business.

Written by Jack Delahunty in partnership with The Risk Institute at Ohio State’s Fisher College of Business

One thought on “Webinar Recap: Change Management in Today’s Evolving Business Landscape

  1. In our new paper ‘Investing in radical change’ we present a detailed analysis of trends that determine the post-COVID investment landscape . Webinar Recap: Change Management in Today’s Evolving Business Landscape.

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