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It’s Time To Rethink The Change Gospel

2022 April 10
by Greg Satell

Today it’s become an article of faith that we live in a VUCA world (Volatile, Uncertain, Complex and Ambiguous). Business pundits tell us that we must “innovate or die.” These are taken as basic truths that are beyond questioning or reproach. Those who doubt the need for change risk being dismissed as out of touch.

This is the change gospel and it is worshiped with almost religious fervor. Yet the evidence suggests exactly the opposite. An even relatively casual examination of relevant data would reveal that, for incumbent businesses at least, the era we live in now is far more stable, less innovative and less productive.

In a nutshell, we are talking about change more, but doing it less. That’s a problem. Managers who want to be seen as change leaders launch too many initiatives. Employees, for their part, get jaded and wait for the newest idea to fail, just as the others before did. The result is inevitably innovation theater, rather than meaningful change. We desperately need to fix this.

A VUCA World?

Let’s start with the basic premise that the business world has somehow become more volatile, uncertain, complex and ambiguous. The term first arose in the aftermath of the Cold War, when a relatively stable conflict between two global superpowers fragmented into a multipolar, multiethnic clash of civilizations.

In this new era of conflict, cultural, religious and ethnic identities replaced ideologies as previously subjugated groups sought to be recognized. The Soviet Union broke up, the Balkans disintegrated into war and strife. Despots around the world, now suddenly cut off from their superpower backers, had to confront internal rifts.

In stark contrast to the world of geopolitics, however, the sphere of business and economics moved solidly toward a new orthodoxy known as the Washington Consensus, which preached market fundamentalism and deregulation. Many of these reforms were sorely needed in many places, but policy soon became dogma decoupled from reality.

Today, in part because of lax antitrust enforcement over the past few decades, businesses have become less disruptive, less competitive and less dynamic, while our economy has become less innovative and less productive. The fact that the reality is in such stark contrast to the rhetoric, is more than worrying, it should be a flashing red light.

Disrupting People, Not Industries

Go to just about any industry conference these days and you will likely hear a version of the same story: Traditional firms are under siege. The forces of disruptive innovation, agile startups and technological advancement mean that organizations need to be in a state of perpetual transformation in order to keep up.

The data, however, tell a different story. A report from the OECD found that markets, especially in the United States, have become more concentrated and less competitive, with less churn among industry leaders. The number of young firms have decreased markedly as well, falling from roughly half of the total number of companies in 1982 to one third in 2013.

A comprehensive 2019 study from the National Bureau of Economic Research found two correlated, but countervailing trends: the rise of “superstar” firms and the fall of labor’s share of GDP. Essentially, the typical industry has fewer, but larger players. Their increased bargaining power leads to more profits, but lower wages.

The truth is that we don’t really disrupt industries anymore. We disrupt people. Economic data shows that for most Americans, real wages have hardly budged since 1964. Income and wealth inequality remain at historic highs. Anxiety and depression, already at epidemic levels, worsened during the Covid-19 pandemic.

Change Fatigue And The Great Resignation

It is through this prism of increasingly powerful companies and vulnerable employees that every change initiative should be viewed. While leaders often see change initiatives as energizing and exciting, to employees they can seem like just one more burden on top of many others from both inside and outside of the workplace.

Research undertaken by PwC before the pandemic bears this out. In a survey of more than 2,200 executives, managers, and employees located across the globe, it found that 65% of respondents cited change fatigue, and only about half felt their organization had the capabilities to deliver change successfully.

It gets worse. 44% of employees say they don’t understand the change they’re being asked to make, and 38% say they don’t agree with it. Perhaps not surprisingly, employees view new transformation initiatives suspiciously, taking a “wait and see” attitude undermining the momentum and leading to a”boomerang effect” in which early progress is reversed when leadership moves on to focus other priorities.

Covid has exacerbated these underlying pressures. Since February 2020, millions of Americans over the age of 55 have left the workforce, driving a major labor shortage. For the first time in decades, workers are seeing a significant increase in their bargaining power and they are leaving in droves. Should anyone be surprised?

Focusing On The Meaningful Problems That Matter

Clearly, every organization needs to drive meaningful change. However, too many initiatives can undermine genuine transformation, leading to change fatigue and innovation theater. We need to make better choices about the projects we pursue. We can’t evaluate each program in a vacuum, but must take into account employee and organizational health.

In Mapping Innovation, I made the point that innovation isn’t about coming with ideas, but solving problems and I think that’s a good place to start when evaluating a transformation project. If successful, would this project solve an important problem? Is there a general consensus that it’s a problem we need to solve? How would solving it impact our business?

One of the things I’ve noticed in helping organizations pursue transformation is that questions like these are rarely considered. In fact, executives are usually surprised when we bring them up at the very beginning of the process. All too often, change is seen as an end in itself, rather than as a means to an end.

We need to rethink the change gospel. There’s far too much talk and not nearly enough impact. Change should be an inspiration, not one more burden in an otherwise exhausted workplace. It’s time to refocus our efforts on change that matters. In most organizations, that will mean committing to fewer initiatives, but seeing them through.

 

Greg Satell is a transformation & change expert, international keynote speaker, and bestselling author of Cascades: How to Create a Movement that Drives Transformational Change. His previous effort, Mapping Innovation, was selected as one of the best business books of 2017. You can learn more about Greg on his website, GregSatell.com and follow him on Twitter @DigitalTonto

Need to overcome resistance to change? Sign up for the Adopting A Changemaker Mindset Course today!

 

Image: Lovefreund

 

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