Transformation – The Last Management Frontier

The classic change management paradox

There is nothing permanent except change


Why do organizations struggle so much with change despite the obvious truth of the quote from Heraclitus? In BSG we work with this every day – in some ways it is all we do. After more than 25 years experience with strategic problem solving, international project management, organizational culture and behavioural change, we have recognized some fundamental rules:

  1. Some cultures are good at change, some at consistent improvements and some are in limbo – avoid the last and go all in on the most relevant for your industry and positioning
  2. Change is individual – you cannot change an organization – but you can organize a change without coaching each and everyone
  3. There is irrational and there is rational resistance – learn how to treat them differently by recognizing each and applying the right tool

Stop me if you heard this one before: We were working with a large global manufacturer of machinery and they had just bought a CRM system. They were now designing and configuring the system, but they were slowly realizing that they were getting massive resistance, as they started involving their sales organization. Visually their process looked a bit like this:

 Step 1Step 2Step 3
Client approachIdentify & buyDesign & configureCommunicate & train
3I translationImplementIdeateInsight

The first line is what they did – the second line is the translation of their actions into the 3I innovation process – but in exactly the wrong order (you first want to talk to the users to get insight, then ideate for the design and finally implement by in this case buying the most relevant system)!

So obviously this was an organization that was not experienced in managing change – thus breaking rule 1. They also took the classic one size fits all communication approach and thus breaking rule 2. Finally, the resistance because of that approach was equally rational and irrational (it did not make sense what they did, so it was rational to resist – the sales organization was also super pissed, so it quickly turned irrational as well😊) – getting 100% perfect rule breaking score. There is another way with a three sided approach to respect the fundamental rules:

The cultural problem

Culture levers are typically either ineffective, misaligned or both (Source: BSG)

Culture is typically developed as a side product of the founders behavior and then over time through organizational growth adjusted with each new senior manager. Or to quote Steve Gruenert and Todd Whitaker: “The Culture of any organization is shaped by the worst behavior the leader is willing to tolerate.”

Now many organizations do not have a consistent nor effective approach to strategy, structure and change or how people are recruited, rewarded and developed. There is rarely one vision of the culture guiding every lever affecting the organization – and powerful tools applied in each lever. Without that consistency it is difficult to expect for example a fast moving and innovative organization.

The change problem

At least do yourself the favor and approach it rationally (Source: Prosci)

Here is the classic approach. The management team goes offsite to finalize the main outline of the new strategy, that they worked on for a few months, before announcing the surprise town hall meeting, where they spring their brilliant concept formulated as “3 key points” on their poor organization. What is wrong with that? I mean is that not exactly what the management team is paid for (among other things)?

The problem is of course that this is not how people work regardless of what we are paid to do. We do not mind change – many actually love it – but people change at different speeds and only when they can convince themselves that the vision is about twice as good as the current approach. Imagine you have been a successful sales manager for ten years, when you are told that you need to change everything and align your approach with the “3 key points” (pause for dramatic effect). Will you a) forget everything that made you successful for ten years or will you b) continue as before until you recognize tangible improvements in your everyday challenges? Building your change program to ensure tangible and individual interaction is critical.

The bias problem

The toolbox to minimize biases is vast (Source: Behavioural Insights Team, BSG)

Even if you have developed the right culture and designed a great change program rationally, you will still encounter the entire Zoo of Irrationality – the six bias groups. We tend to have tunnel vision and thus miss all the largest opportunities, search for data confirming our preconceived notions and overlook warning signs, be overconfident about what it takes, take decisions based on how happy we are and not least stick with losing ideas.

Now if some organizations has nailed the culture and thus build an effective highway for their change programs to drive on, a few have created effective change programs and thus built fast race cars to drive their vision, then almost no one have managed to debias their change efforts and thus avoid the driver swerving back and forth. To be clear you need to bring the people with you to succeed.

We will dive into the details of how to use these three very different toolboxes in the next articles. If you cannot wait, then contact or +45-23103206

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