Navigating Big Change in Uncertain Times

For those of us who study complex change, the events of 2020 have served to validate our belief that volatility, uncertainty, and ambiguity are normal, that the pace change is increasing, and that organisations who are responsive to change can thrive from it. Unfortunately, for many companies who were already challenged by this VUCA environment, they are now facing a do or die situation.

According to Prosci® research completed in 2017, 86% of executives believed that the amount of change they were expecting in their business was increasing. What has become clear since that survey was released is that they were not only right, the participants probably had no idea how right they were. I also suspect that the 14% expecting equal or less change have eaten their words by now.

It may be hard to imagine but even without Covid-19, the global business environment was already pretty volatile. We have recently experienced upheavals in oil markets, growing trade restrictions as well as unrest in the Middle East, Asia and Latin America, growing nationalism, rising despotism, disruptions in supply chains and much more.

All of this volatility creates uncertainty in the markets, and uncertainty is growing. According to the International Monetary Fund, the World Uncertainty Index was already surging before pre-Covid. They stated,

“The latest data for the fourth quarter of 2019 show that, after dipping in the third quarter of 2019, the aggregate index - a GDP-weighted average of 143 countries -is at an all-time high.”

We can only expect that it is even higher in August of 2020..

The challenge is getting leaders to understand that preparing for rapid change in uncertain and complex environments requires them to change as well. Leaders often make the mistake of working to build organisations that are robust or resilient to change, and that are able to withstand change or absorb it when, really, they should be thinking about how to build organisations that are able to thrive as a result of volatility and rapid change. In Nassim Nicholas Taleeb's terms, Antifragile.

“This is the central illusion in life: that randomness is a risk, that it is a bad thing… Much of modern life is preventable chronic stress injury…The fragile wants tranquillity, the anti-fragile grows from disorder, and the robust doesn't care too much.”

- Nassim Nicholas Taleeb, Author of Antifragile: Things that Gain from Disorder

Yet, embracing uncertainty and preparing for rapid change is not easy. One key reason is that managers have not been trained to think this way. Whenever I discuss these concepts with managers, inevitably they acknowledge the problem then immediately start boasting about how they are building robust processes to reduce complexity, eliminate unpredictability, and withstand change while working to gain greater control over their business through centralisation or some other means.

This reductionist attitude is not unexpected. Change and uncertainty tend to trigger the survival instincts, causing people to revert to the behaviours for which they have been rewarded for throughout their careers. Typically, this means attempting to collect data, manage outcomes, predict the future, and ultimately show that the are in control. This may be an adequate approach in a simple organisation with singular objectives and little change, but as uncertainty and complexity build, as the environment has more impact on the business, and as more variables come into play; the command and control approach not only proves inadequate and expensive, it is potentially fatal resulting in action and stagnation.

While there has been a lot written on these topics in the last fifteen years (and on this website), it is difficult to convince leaders that their instincts are actually working against them. This is because at the core of their behaviour lies principles that have been hammered into their consciousness for more than a century - principles encompassed in Frederick Taylor’ Scientific Management and embedded in most organisations today. These principles such as hierarchical structures, separating thinkers and doers, and process optimisation developed during the industrial revolution and served companies well during the days of mass production. But this success is also the challenge for many organisations today who are living in much different times. Rather, in today’s environment, during the 4th Industrial Revolution where information, complexity, inter-connectedness, and mass customisation make our world less certain and less predictable, it makes sense to build agility, responsiveness, and flexibility into our organisations.

There is nothing new in this thinking as these have become the buzz words of the last decade. However, it is easy to say and harder to do. Moreover, how we think about change has often remained in the traditional management structures as well. So as business evolves to deal with volatility and uncertainty, so must our approach to dealing with change.

But where to begin? That is always a key question. Here are some ways to get started.

1. Consider yourself: Embracing uncertainty is a change in mindset that requires leaders to relinquish control and enable change to emerge. Once they can do this, they can begin to strategise for change. However, this is not something that comes naturally for many people. It must be learned.

2. Ensure a clear purpose and vision: When things become chaotic and uncertain, having a clear course to steer by becomes invaluable. Your organisations purpose and vision provide that course. The more people are aware and understand the “why” the change, the better and faster they can respond.

3. Assume that change is inevitable and continuous: Too often leaders see change as a one-time effort, something we have to get through and get over. They expel a lot of energy hoping to get back to their “new normal.” This approach invites lethargy. By assuming change will continue, organisations can build their endurance so that each change takes less energy out of the organisation.

4. Structure for change: Building a change capability throughout your organisation will enable it to respond faster and better. There is no one right answer to the structure. It can depend on many elements (culture, complexity, history, etc). But by instilling a systematic approach, framework, and language into your organisation and making sure everyone has the capability to apply them, you can ensure the organisation is prepared for the inevitable.

5. Focus on small interventions while preparing for large: Promote change in all parts of the organisation encouraging small interventions that will accumulate over time. At the same time, prepare for the necessity when a big disruptive change will inevitably be necessary whether it is due to environment, competitive, or other factors.

6. Treat your change strategy as change: As you strategise for rapid and uncertain change, remember that building an organisational competency for change is, in itself, a massive change. Treat is as such and utilise all the techniques for building awareness, desire, knowledge, and ability for adopting change competencies to make raise your probability for success.

7. Create an Energising Myth: Build a sense that your organisation is out to do something different ant that this group of employees are the only one's to do it. As discussed in another article, this is a self fulfilling approach that will build a sense of antifragility within your team.

While these steps are a just beginning and neither comprehensive nor exhaustive, the goal of building a Responsive Change program to reduce fragility is a long road and sort of like reaching for Nirvana, a never-ending journey. Like any journey, just by going, you will better prepare your organisation for a world that is both uncertain and unpredictable while also foreseeably volatile, uncertain, complex, and ambiguous.