Bringing about deep change in an organisation is hard. Legendary management consultant W Edwards Deming claimed that transformation was simply not possible without profound knowledge: appreciation for a system, knowledge of variation, theory of knowledge and the psychology of people society and change.
With my engineering background, I appreciate the systems view, understand variation, and work within a methodology to come to know what I know. But perhaps the greatest hurdle preventing change is the people part of Deming’s framework. We’re the real challenge. Deming, who died in 1993, was prescient. The last twenty years has brought a revolution in the study of behaviour and motivation and increasingly we’re using hard science to come to understand why we do what we do. But that’s a subject for a whole book. So for now let’s consider the need for change. Is it real? Is it urgent?
[Listen to audio version, read by David Hodes]
Start with the fact that of the 500 companies comprising the Fortune 500 in 1955, only 60 remained in 2017. And that while heavyweights used to spend 33 years in the S&P500, that is forecast to drop to 14 years, according to Inc Magazine. As Deming noted, ‘Survival isn’t mandatory’. It’s a sobering thought. In our digitised world of AI, AR and IoT, any organisation looking to make the transition from today into tomorrow must surely consider the idea that the ends themselves are going to be different, not simply the means of getting there. Wherever we look, there is an ever louder call to reimagine every industry. Is it true? At first glance it certainly seems so.
For example, the core job of an airline is to transport you and your luggage safely from A to B, departing and arriving on time, every time. Yet increasingly we also expect the airline to seamlessly offer us everything associated with the experience of travel—from web-based bookings of the flight and hotels, to transfers and in-flight entertainment. Soon we’ll think it normal to be geo-tracked at the airport, with a text telling us when we should head to the gate. And more.
Even something as mundane as a mine producing the basic inputs to the front end of a supply chain must reimagine its operations if it wants to avoid the depredations of the bust years and the indulgences of the boom ones. And how will we address the real issues of ecological footprint, social obligation, ‘just work’ and customer satisfaction while at the same time keeping the shareholders rewarded for their investment?
People, not machines
An engineer by temperament and habit, I like the application of reason to problem identification and solution. The industrial revolution gave us the machine as both an innovation in productivity and a metaphor for human endeavour. Surely, we just needed to think hard enough about the causes of a problem and we could find a solution? The cogs and gears of a machine create a deterministic system. There’s no randomness, for example, in a Swiss watch.
More recently, our metaphor has become the computer. Yet, despite all the advances, it’s still a deterministic device—a machine. IBM’s Watson may win Jeopardy and Google’s text-to-voice assistant can convincingly book a hair appointment, its naturalistic ‘mm-hmms’ helping it pass for human. But that’s not quite what Alan Turing’s test had in mind. And while AI can decide when an aircraft should come in for maintenance, or identify the elemental composition of a sample of minerals—even help robots assemble an IKEA chair—it cannot (yet) solve a general set of problems when the future is fuzzy and there are no instructions.
We have evolved to divide the world into two fundamental parts—the known and the unknown. The taxonomic engine of our minds is in a constant dance of perceiving what is ‘out there’ on the frontier of our experience and codifying it into models of ever increasing complexity. These models serve us well for a time—until they don’t. Then we do what machines cannot. We become afraid.
Legendary systems thinker, Russell Ackoff—not coincidentally a friend and collaborator of Deming—talked of reformation and transformation. He defined the former as the change of the means to accomplish the same ends, whereas the latter occurs when the end itself is changed. Either approach may be valid, but regardless, you have to look within and ask the two big existential questions: “Who am I?” and “Why am I here?”
Overcoming our fears
A life lived fully demands that we regularly see the world afresh. So how do we overcome the real dread of not knowing what’s beyond the frontier of our own experience? How do we surrender to what is beyond the walls of our fortress—that dark forest which before you venture within, is unknowable and untamed? This exploration is not only for ourselves, but for our teams and organisations, individually and collectively embarking on the kind of transformational change needed to do both the minimum—survive—and also to thrive?
How do we overcome the real dread of not knowing
what’s beyond the frontier of our own experience?
We hope the leaders of our multinational enterprises will be brave and eschew the temptation to take the low road of short-term profits, rent seeking or even corrupt practices. But why do so few take up that option? And if they do, why do so many grand initiatives fail spectacularly? The major flops get splashed across the front pages for a day or two. But how well do we really learn their lessons? And what of the failures that didn’t make the headlines? Are we even learning the right lessons from success? We lionise successful companies, but too often take their leaders’ memoirs at face value without acknowledging the ‘right place, right time’ luck of it all. Survivor bias makes us blind.
I have found Theory U to be a useful framework to help leaders better understand what comprises the necessary and sufficient conditions to create a transformation—at first individually, but ultimately, collectively. I am attracted to the theoretical underpinning Otto Scharmer of MIT has given to Theory U, but have also found much of value from other practitioners such as Adam Kahane, Joe Jaworski, Peter Senge and Brian Arthur. In many ways, the ‘U’ journey describes the archetypal Hero’s Journey, a story familiar to every culture in every age, told most lucidly by Joseph Campbell in his very popular series The Power of Myth.
At some point in our life, we are invited into an adventure. We cannot simply move from where we are now, in the comfort of our every day to the new world of bounty by calculating our way there through our powers of reason alone. If transformation is to occur, there is a necessary descent into the metaphorical underworld. The butterfly does not come into being until the caterpillar has dissolved into a seemingly formless chrysalis. We must be willing to confront our psychological shadow and sacrifice our limited view of how the world works for something to emerge which is much deeper and richer. The butterfly is not apparent within the cocoon. But its final form, mysterious as it is, is encoded in the DNA of the chrysalis.
It’s no wonder that transformation is the road less travelled. There is pain associated with letting go of what once you may have held dear. The past, after all, may have brought you riches, status and authority. And, even if it didn’t, there’s truth in the cliché ‘better the devil you know’. It takes genuine courage to summon the new you from the practised routines of your life lived so far. Most folk don’t embark on this kind of adventure unless what they are leaving behind has become intolerable. It’s easier to remain a caterpillar chewing on a leaf than to surrender to the unknown, break down the walls and submit to the adventure that lies beyond.
Eventually, though, you have to answer the call. If you don’t pick up your share of the load and turn the virtue of your aspiration into responsibility for creating a better world, then the risk gets higher and higher that you will become stale, increasingly bored and ultimately cynical or nihilistic. When you call on your brave heart, deep down, you know you must rise to the challenge.
But how to change?
As Yogi Berra said: ‘the future ain’t what it used to be’. Clearly, if our organisations are to survive—and we as individuals are to thrive—we all have to get better at overcoming the inertia bestowed on us from past successes—and failures! We must build a better way of running transformational processes which hold out the possibility of reducing the high anxiety associated with the speed and scope of the changes being rung in by our age. But while technology plays a large role in defining the future of our organisations, in my engagements I hear, again and again, that what’s holding people back from realising the potential of their best ideas is an engaging and disciplined approach. It comes down to envisioning the future we want, then aligning around what needs to be done—and doing it with a shared consciousness.
Where the computer analogy holds is that we need to upgrade the whole managerial leadership operating system which acknowledges that the way we work is in constant renewal. Our organisations are not Swiss watches. In truth, they never were. Even Adam Smith’s pin factory had to deal with variation. The difference today is the depth and scope of what needs to be changed. Because the ecosystem in which we exist—whether you call that your value chain or the whole natural world—is changing around us, moment by moment. Like Alice’s Red Queen, we have to run just to stay in place.
Journeying down and back up
At the start, I said the psychology of people within the system is the biggest hurdle to transformational change. This invariably means that in order to incite change, you are best served by bringing in expertise from outside. That’s what Deming did in Japan and what I try, in my own small way, to do, too. In doing so, I call on a valuable framework based on Theory U, that has worked not only for me, but in many other contexts.
As articulated by Brian Arthur of the Santa Fe Institute, Theory U provides an approach to learning new ways of being and acting in the world, involving three fundamental movements:
1. Observe, observe, observe
2. Retreat and Reflect
3. Act in an instant
Over the years, I have adapted this idea into the Ensemble Way, with three distinct phases, each of which has sub-phases making up the whole. I’ve already written, in ‘Shut Up and Listen’, about the generative interviews, a critical step of the ‘Explore’ phase and precursor to the Foundation Workshop. Over the coming weeks I’ll be writing more about how Theory U gives you a process to follow for personal liberation and organisational transformation.
What excites me about the U process is how it taps into the collective wisdom at all levels of work, facilitating each contributor’s ability to come alive to the possibility of what the future of their aspirations represents. It’s a process, when run well, which engages with the collective intelligence of the overall ecosystem engaged in the work of its own renewal. Like the chrysalis, we already have the DNA to become the butterfly, despite how things might appear!
This article is Part 1 of our series on The U Journey.
Part 1: How to change: Introducing Theory U
Part 2: Preparing for the Foundation Workshop
Part 3: Running the Foundation Workshop
Part 4: Stepping into Design
Part 5: Wisdom from outside your domain
Part 6: Retreat and Reflect
Part 7: Crystallise Intent
Part 8: Deliver
The change from standard thinking to Theory of Constraints (TOC) is both profound and exhilarating. To make it both fun and memorable, we use a business simulation we call The Right Stuff Workshop.
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