Organisational Change: The New Ten Commandments

Since 2010 many consultancies I’ve spoken to have reported an increase in demand for organisations seeking to fundamentally change their ways of working; what some people call organisational transformation. Some of these organisations are public sector bodies facing big cuts, others are companies being disrupted by new technologies, cheaper international competition or just out-manoeuvred by new nimble businesses. Either way it’s becoming increasingly obvious to many organisations that they must change. Often at the heart of that change is a desire to become both more innovative and flexible, which as far as we can tell is what organisational transformation means to most people.

Trouble is, we can find very little evidence that organisations which embark on ‘transformation’ become more innovative and flexible. As far as we can tell there are two principle reasons for this. Firstly, and especially prevalent in the public sector, is that the focus on cost-cutting can override all other concerns. So although a transformation project may have a stated intention to help an organisation become more flexible and innovative, in practice it’s just about cutting. Secondly is that much of these organisational change projects pay far too little attention to the specifics of the organisational context and character. Many organisations’ ways of working have been built up over decades, sometimes centuries, and so changing this is going to be tough. But instead of seeking to rigorously understand the organisational context, most play lip service to it before putting it firmly out of sight and mind. This is a problem as organisational systems and behaviours are often the key drivers for organisational behaviour. There’s no point taking your top team on an inspiring leadership development away day, only to come back to the office and find the existing immovable management systems no longer accommodate their new vision.

Last month we launched a report with PwC and Harthill: The hidden talent: Ten ways to identify and retain transformational leaders, which found that this kind of behaviour seems to drive essential talent out of organisations. It’s the opposite of what’s needed. The report found that only 8% of our current leaders have the necessary skills to create the kind of lasting organisational change that’s needed. It also found that key to growing this figure is focusing on organisational systems.

Here are the 10 activities the report identified we can do now to make our organisational systems support innovation and flexibility:

1. Distributed responsibility: Push power downwards and outwards to create a culture of self-management and openness.
2. Honest about information: Recognise the limits of available information and be candid about that.
3. An empowering collective culture: Make principles like IDEO’s “ask for forgiveness nor permission” a behavioural norm.
4. Invest in reflective professional development: Prioritise analytical and reflective capabilities which seek to understand situations from ever more diverse and interconnected perspectives.
5. Hire for innovation and flexibility: Develop a recruitment process that facilitates the desired new culture.
6. Openly address conflict and failure: Accept the necessity of failure for growth and discuss difficult areas authentically.
7. Bring your whole self to work: Actively invite the wider dimensions of staff’s lives into the business.
8. Collective strategy building: Work together on developing business strategy with everyone who will play a part in its execution.
9. Prioritise staff reflection: Recommend and facilitate staff reflection time in a structured way to ensure it happens regularly.
10. Senior leaders walking the talk: Ensure senior leaders commit to their own professional development and model the desired organisational behaviours.

Image credit: George Bannister