To Achieve Real Change, You Must First Anticipate And Overcome Resistance

When Barry Libenson arrived at Experian as Global CIO in 2015, he devoted his first few months to speaking with customers. Everywhere he went he heard the same thing: they wanted access to real-time data. On the surface, it was a straightforward business transformation, but Libenson knew that it was far more complicated than that

To switch from batch processed credit reports to real-time access would require a technology transformation—from an on-premise to a cloud architecture—and in order to develop cloud applications effectively, he would have to initiate a skills-based transformation—from waterfall to agile development.”

So what at first appeared to be a straightforward initiative was actually three separate transformations stacked on top of one another. To make things even more difficult, people had good reason to be hostile to each aspect. Still, by being strategic about overcoming resistance from the start, he achieved a full transformation in less than three years.

Understanding Cognitive Biases

One of the key concerns about Libenson’s program at Experian was that the company would lose control over its business model. The firm had prospered selling processed credit reports. Giving customers real-time access to data seemed to undercut a value proposition that had proven itself over decades, almost as if McDonald’s decided to stop selling hamburgers.

These were not casual criticisms. In fact, they reflected instinctual cognitive biases that are deeply rooted in our consciousness. The first, loss aversion, reflects our tendency to avoid losses rather than seek out new gains. The second, called the availability heuristic, reflects our preference for information that is easy to access and internalize, such as the decades of profits generated by credit reports rather than the vague promise of a new cloud-driven business model.

A similar dynamic is plays out between the Black Lives Matter movement and police unions. One could argue, with significant evidence, that the smart play for police unions would be to come to some accommodation with protesters’ concerns to avoid more draconian policies later on. Yet after meticulously building their power base for decades, they have shown little willingness to make concessions.

Libensen and his team were able to navigate these challenges with two key strategies. First, he started with internal API’s, rather than fully open applications, as a keystone change,. That helped bridge the gap between the initial and desired future state. Second, the  program was opt-in at first. Those program managers who were excited about creating cloud-based products got significant support. Those who weren’t were left alone.

Navigating Asymmetrical Impacts

Another obstacle to overcome was the fact that some people were more affected than others. In the case of Experian’s skills-based transformation from waterfall to agile development, which was essential to making the business and technology transformations possible, the change hit more senior personnel harder than junior ones.

Many of the project managers at the company had been doing their jobs for years—even decades—and took great pride in their work. Now they were being told they needed to do their jobs very differently. For a junior employee with limited experience, that can be exciting. For those more invested in traditional methods, the transition can more difficult.

Here again, the opt-in strategy helped navigate some thorny issues. Because no one was being forced to switch to agile development, it was hard for anyone to muster much resistance. At the same time, Libenson established an “API Center of Excellence” to empower those who were enthusiastic about creating cloud-based products.

As the movement to the cloud gained steam and began to generate real business results, the ability to build cloud-based projects became a performance issue. Managers that lagged began to feel subtle pressure to get with the program and to achieve what their colleagues had been able to deliver.

Overcoming Switching Costs

Experian facilitates billions of transactions a month. At that scale, you can’t just turn the ship on a dime. Another factor that increased the risk is the very nature of the credit business itself, which makes cybersecurity a major concern. In fact, one of Experian’s direct competitors, Equifax, had one of the biggest data breaches of the decade.

Every change encounters switching costs and that can slow the pace of change. In one particularly glaring example, the main library at Princeton University took 120 years to switch to the Library of Congress classification system because of the time and expense involved. Clearly, that’s an extreme case, but every change effort needs to take inevitable frictions into account.

That’s why Libenson didn’t push for speed initially, but started small, allowing the cloud strategy to slowly prove itself over time. As win piled upon win, the process accelerated and the transformation became more ingrained in the organization. Within just a few years, those who opposed the move to the cloud were in the distinct minority.

As General Stanley McChrystal explained in Team of Teams, he experienced a similar dynamic revamping Special Operations in Iraq. By shifting his force’s focus from individual team goals to effective collaboration between teams, he may have slowed down individual units.  However, as a collective, his forces increased their efficiency by a factor of seventeen, measured by the amount of raids they were able to execute.

In every transformation, there is an inherent efficiency paradox. In order to produce change for the long-term, you almost always lose a little bit of efficiency in the short-term. That’s why it’s important to start small and build momentum as you go.

Leveraging Resistance To Forge A New Vision

Any change, if it is important and potentially impactful, is going to encounter fierce resistance. As Saul Alinsky noted, every revolution inspires its own counter-revolution. That’s why three quarters of organizational transformations fail, because managers too often see it as a communication exercise, rather than a strategic effort to empower those who are already enthusiastic about change to influence everyone else.

In the case of Experian’s move to the cloud, the objections were not unfounded. Offering customers real-time access to data did have the potential to upend the traditional credit report business model. Switching to a new technology architecture does raise cybersecurity concerns. Many senior project managers really had served the company well for decades with traditional development methods.

As Global CIO, Libenson could have ignored these concerns. He could have held a “townhall” and launched a major communication effort to convince the skeptics. Yet he did neither of these things. Instead, he treated the resistance not as an obstacle, but as a design constraint. He identified people who were already enthusiastic about the shift and empowered them to make it work. Their success built momentum and paved the way for what became a major transformation .

In fact, Experian’s cloud architecture unlocked enormous value for the firm and its customers. The company’s API hub made good on Libenson’s initial promise of supporting real-time access to data and today processes over 100 million transactions a month. It has also enabled a completely new business, called Ascend, now one of the company’s most successful products.

The truth is that bringing about fundamental, transformational change takes more than clever slogans and happy talk. The status quo always has inertia on its side and never yields its power gracefully. You need to be clear-eyed and hard-nosed. You need to understand that for every significant change, there will be some who seek to undermine it in ways that are dishonest, underhanded and deceptive.

The difference between successful revolutionaries and mere dreamers is that those who succeed anticipate resistance and build a plan to overcome it.

– Greg

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