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The inflation of change and turns

by Mark P. McDonald  |  November 20, 2019  |  Comments Off on The inflation of change and turns

We are trapped in a cycle of inflationary change.  Sure, change is a constant in modern business, but not all change is the same.  The failure to recognize these differences results in seasoned executives behaving like corporate three year old –  everything is a big deal.  In the face of these big deals, organizations naturally act like teens – yeah, whatever.

The result is an inflationary cycle where leaders believe they need to turn up the volume, while others seek to tune it out.  Change begets more and greater change, until before you know it an organization is in the midst of an existential threat, aka disruption.

There is a spectrum of change, or more appropriately the responses to change that describe modern leadership. The spectrum runs from the ultraviolet intense existential threat to the more mundane operational frustrations we face on a daily basis.  The figure below illustrates this spectrum.

 

 

Leadership literature concentrates on the far extreme – making disruptive change a constant theme in boardrooms, strategies and plans.  Large scale, high risk, high reward change is the Action move of the business world. Books are written about it; keynote speakers are hired for it.  Disruption gets attention.

Daily Management is the discipline of improvement most often concentrating on removing the causes of operational frustration:  poor quality, weak processes, skills gaps etc.  Small scale, local, low risk but accretive returns – it is the operating instructions that come with a new device.  Notice that few devices come with operating instructions anymore.  No one pays attention to frustration, they live with it, even though much frustration is within their ability to resolve.

Binary Blindness

Seeing change as binary creates more problems than it solves.  A binary view of change creates cynicism.  Every challenge is inflated into an existential threat to get management attention and action.  It’s a chicken little approach to leadership. Every new product or pricing action or anything represents a disruptive threat.

The resulting inflation of change exists because organizations do not know to manage themselves across functions, operations and channels without everything being a big threat.  The inflation of change creates more change and a vicious cycle of leadership as each event requires an existential response.

If your company is undergoing multiple “transformation” efforts, then you are in the middle of an inflationary spiral.  Alternatively, if you have a single large transformation effort with major work streams, your inflationary spiral has a program office  – congratulations.

Change Myopia

Inflationary change cripples’ organizations and an executive’s ability to act.  If it is not transformational, then it is not worth our time.  Until it is worth our time, which is the fuel behind the inflation.  That is what we mean by change myopia.  One side of the spectrum, like one of your eyes, dominates and you lose function in the other.  That other is the disciplines of daily management also known as improvement.

Improvement gets none of the attention it deserves in the literature or popular business press. There are few books on the business best seller list about how organizations plugged away, addressed operational frustrations and made constant, consumable changes to success.  Yet behind every great company, there is an ethos of making things better every day and in every way.

Daily management practices and continuous improvement are making a small comeback.  These ideas are embedded in Agile principles.  They are increasingly enabled by machine learning and Robotic Process Automation (RPA).  They need to be seen as a primary means of engaging the entire workforce and giving it purpose.

I am a huge fan of daily management and continuous improvement, too few organizations give it the attention or resources it deserves.

The Missing Middle — turns

Inflationary change forces compounded by a binary view create a blind spot in many organizations. This blind spot is a missing middle between the extremes that we can call a “turn”.  A turn is a level of change that requires a proactive response in the context of new circumstances.  Rather than wait until these circumstances become existential, a turn engages the organization based on facts and constant adjustment using information and insight.  The figure below highlights turns in the change spectrum.

A turn is more than a goldilocks approach to change – one that is neither to disruptively hot or operationally too cold.  A turn is a proactive response, rather than a reactive correction when it might be too late.

There are many sources of turns including:

  • Customer expectations, experiences , values or needs (new demands, new baseline expectations, service levels, etc.)
  • Technology capabilities and capacities (new computational models, data capacity, insights, etc.)
  • Competitive or market restructuring (industry barriers falling, new competitors, etc.)
  • Business models (value creation, value capture, product models, monetization approaches, etc.)
  • Regulatory and geo political (new regulations, laws, trade regimes, etc.
  • Economic conditions (recession, growth, interest rates, price levels, etc.)

A turn is created by a change in one or more of these factors.  Frequently it is smaller changing in combination that creates an opportunity for the future.   Turns create the context that executives overact to and fuel inflationary change.  Recognizing a turn is essential to lead beyond the disruptive symptom and address the deeper cause.

Fight human nature, recognize a third way

Turns represent a third way of seeing change, that is hard for humans to see. Much of our world and way of thinking is binary, clearly delineated, easily classified into this or that.  We all want three options but largely to make a choice between one or the other.

The world is easy to understand if its polar: positive or negative, conservative or liberal, red or blue, boom or bust, sane or out of their minds, us or them.  It does not work that way and people seeking to build binary models too often lose the opportunity for the ends.

Business leaders are human and susceptible to the same way of thinking – disruptive or incremental. The idea of the turn names the types of changes that are create value rather than rescue a company from itself.  Future posts will deal more with this idea, what is required to lead in a turn, how you see them, what success looks like, etc.  But for now:

  • Recognize the inflationary nature of current change modes and the cynicism they create.
  • See the full spectrum of change
  • Value and increase the importance of daily management and improvement, regardless of where you stand.
  • Get ready to learn more about a third way – a turn

Related Blog Posts:

The nature of change is changing

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Category: leadership  management  winning-in-the-turns  

Mark McDonald, Ph.D., is a Vice President and Fellow Emeritus in Gartner for General Managers Program.






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