Change Management - II

Since change is gradual and we have sufficient time to adjust for the coming change yet many fail to adapt to the change. What's wrong? Why can't we adapt? The foremost reason is that we don't see it coming. We have a myopia fallacy. We don't see the coming change and ignore the early signs until it's too late to adapt. Another reason is that to change is very difficult. We are fearful of the change because the future is an unknown entity who knows whether the anticipated change is temporary or long enough to warrant a change. The third reason is that any change requires a disciplined approach and very often we pay little attention to that and fail to change.

Peter Drucker in 1999 said that you should revisit your every process and every product every three years to see what has changed over the period and what changes do we expect in the coming days. Since 1999, a lot has changed. The pace of disruption is too fast for a three year period of revision. Now, we should not only revisit our business quite often and also develop a sensor for anticipating signals of coming change. Early on these signals are weak enough to deceive us that nothing is going to change. Whereas the only thing that is constant, it is change.

How to sense a weak signal? One of the prerequisites of a leader is that he should be observant to even the weakest signals. As Allama Iqbal said that a leader should be “جاں پرسوز” i-e should be sensitive. That attribute can be honed through observing everything with a keen eye. One always has to have a searching mind, observing the nuances, interpreting the meanings, connecting different signals in an attempt to rectify, what causes what? It’s an ongoing process. It can be enhanced through reading - newspapers, industry publications, literature and it can also be attained by attending different circles - business meetings, intellectual gatherings, chatting with friends from different fields etc. Also revisiting your entire process, product range at regular intervals and looking for signs of changes like a new process, raw material substitute, new product substitute, new distribution channel, new customer segment etc.

“Old habits die hard” is a truth. But to change, the very first prerequisite is that we must critically analyze our routine to come up with what we need to forego and what we need to get and then plan for a change, one step at a time. To borrow from Marshall Goldsmith’s great book, what got you here—to the success and accomplishments you have achieved up until now—is not going to get you there. (Where you want to go in the future.). Professor Vijay Govindarajan offers (three box solution) to come up with what you need to abandon and what you need to get to succeed in the future.

Three Box Solution - Think about all the projects that your organization is executing and put them in three boxes.

Box 1 is about managing the present. It’s all about improving the efficiency of the current

business models as they are today. It’s all about optimizing the system as it exists today.

Box 2 is selectively forgetting the past.

Box 3 is creating the future.

He says that the future cannot be predicted; nobody can predict what would happen tomorrow then, how can we predict what will happen ten years from now? That is where the concept of weak signals comes in. It is all about imagining the future. This can be done by developing hypotheses about non-linear shifts. Then test these hypotheses and drop those that are no longer valid. Hypotheses can never be developed in a vacuum. You always develop them based on weak signals. We don’t know whether these are real signals or just some noise but that is what hypothesis testing is all about. It will let us know about noise or real signals. We Know One Thing - The World Will Change. 

• Non-consumers will become consumers

• Non-traditional competitors will enter your industry

• New technology will open up new possibilities

You must have

• Capabilities

• Performance Metrics

• Processes

• Culture

To continue to excel in Box 1. But you must embed / create New Organizational Logic in Box 2 and/or Box 3. If you want to become a leader in the future, you have to engage in Box 3 innovation. It is very important. That is non-linear innovation. That does not mean Box 1 is unimportant. Box 1 is terribly important. It is your foundation. You have to strengthen it with linear innovation i-e continuous improvement. Innovation is needed in Box 1 and Box 3. Box 1 is linear innovation and Box 3 is non-linear innovation. If you want to move to non-linear innovation, you have an intermediary step called Box 2. You have to somehow selectively forget the dominant logic i-e current business model as you execute Box 3 innovation.