Tuesday, October 20, 2009

"We are Successful, but Slow"

The title of this blog entry is a quote from a CEO interviewed for the 2009 IBM CEO study.  This landmark study of CEOs from around the globe found that the first success factor for the enterprise of the future is that they will be hungry for change.  The study found a serious gap between the expectation of significant change (83% of respondents) and having a track record for changing successfully (61%).  So what is causing this growing gap?  It isn't the presence of constant change; that has been a factor since the industrial revolution.  Rather it is the growing pace of change that is creating a gap between expectation and success.

The days of having a narrowly focused priority list is past (I'm sure this doesn't come as a surprise to anyone!).  Leaders now have to focus on a plethora of organizational concerns, from changing customer preferences to people issues to technology that is changing the world at a blinding pace.  In fact, CEOs in the study identified these as the top three external factors that have them most concerned:
1. Market Factors
2. People Skills
3. Technology
On closer examination, all of these factors relate to the ability of people within organizations to embrace and succeed in a changing environment.  In fact, CEOs rated insufficient talent as the top barrier to global integration, higher than government regulation and bureaucracy.  Now you know you have a serious problem if it rates higher than the incompetence and resistance of government bureaucracy!

A final interesting note I will touch on is the difference between underperforming and outperforming organizations.  Both of these classifications expect a high level of change in the future (83% and 85% respectively), and both acknowledge managing change as a key to the successful enterprise of the future.  The major difference lies in their track record of changing successfully in the past-the "change gap."  Underperforming organizations only demonstrated successful change 54% of the time, where overperforming organizations were successful 66% of the time.  This simply boils down to having a track record that gives the organization confidence in the face of constant, accelerating change.

So what does all this mean for a change agent striving to help an organization be successful integrators of change?  First it means that denial must be driven out of an organization.  The sooner an organization and its leaders recognize that change is inevitable and accelerating in pace the better.  What made you and your organization successful in the past may not be what makes it successful in the future!  How common it is to talk with members of an organization that is in its waning moments and hear stories of "the good old days" when business was booming or their services were in demand.  An organization's history is important, but it's future is even more important!

Secondly, change is not something that can be managed in an ad-hoc manner.  The successful enterprise of the future will have robust change management programs and processes that anticipate change and focuses on desired outcomes in an environment of accelerating change.  I believe this is what it means when an organization is "hungry for change."  It isn't just a matter of attitude, but also a matter of preparedness and process.  This can take many forms for the various challenges organizations face, but it will be a robust process.  Possibly it is a bi-annual strategy session where the organization gathers to assess progress and changing conditions.  Possibly it takes the form of a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) that is updated and acted upon regularly.  Possibly it is the hiring of a board of directors that is optimally placed to anticipate changes and give great advice and guidance.  Or it may mean treating an organization's resources as venture capital to invest in new and innovative solutions.  Whatever form it takes, it will be systematic, comprehensive, and fast!

Is your organization successful, but slow?  Recognize today that the two simply don't go together when it comes to organizational effectiveness.  My problem with that quote isn't really an issue with its content, just it's tense.  Past tense makes more sense: "We were successful, but slow..."

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