Is change actually needed?
Freek Vermeulen, July 24, 2018
Crucial for successful organisational change is knowing when not to do it
Let’s face it, we humans aren’t particularly strong or particularly fast. We’re not even particularly clever. Apparently Neanderthals had about the same brain size as we do, as has the average bottlenose dolphin.
So why have we thrived so well as a species? Because we are remarkably good at getting organised.
Humans have an unprecedented and truly remarkable ability to co-operate. Our organisations make things that no individual could ever achieve, no matter how much time and how many resources they had access to. Whether you consider aeroplanes, smartphones, MRI scanners or an ordinary toaster, no individual could fully comprehend all of its aspects, let alone put one together. Everything we eat, touch, or work with has been produced by organisations.
That is because in organisations we divide tasks and develop co-ordination patterns that prevent us from having to reinvent the wheel – and that boost quality, efficiency, and productivity. Therefore companies become fine-tuned and stable co-operative structures.
There is just one disadvantage to this: they tend to become rigid. When the corporate landscape changes – because of progressing technology, changing customer demands, or entrants with new business models – the co-operative structures often appear inert and slow to adapt. Before you know it even giants like Nokia or Kodak find themselves stuck and antiquated.
Therefore, for years, management thinkers have been advocating ‘flexibility’, ‘agility’, and ‘adhocracies’. I too have written articles in Harvard Business Review with titles such as ‘Change for Change’s Sake’ and ‘Stop Doubling Down on Your Failing Strategy’. And I stand by them wholeheartedly; companies really need to make change and adaptation a proactive instead of reactive action.
However, just as crucial for successful organisational change is knowing when not to do it. I have also witnessed organisations flip their structures repeatedly, with only disruption as a consequence. I’ve seen them engage in corporate change programmes when the dust of the previous one had barely settled. And here lies an important task for HR: helping the different parts of your business understand when they should stay put and focus on optimising their existing role.
In my latest book I outline what I call a Corporate Cholesterol Test (CCT). It’s a tool that can help HR leaders identify emerging pressure points affecting their organisations and determine if changes are already required – or whether it is too soon.
It builds on the insight that internal change is really only needed if three things have started to emerge: units have become silos that don’t adequately communicate; internal power structures have escalated, preventing optimal resource allocation; and work patterns have become fully routinised without new ways of working developed.
For example, silos are only a problem if internal social networks don’t extend beyond the formal structure, meaning people don’t communicate and co-ordinate beyond the boundaries of their own unit. However, the CCT will reveal when they still do to a sufficient extent, in which case organisational change would likely be futile at best and harmful at worst.
Similarly, the resource allocation that comes with the distribution of power may still be optimally skewed, and work methods just sufficiently routinised to be efficient yet adaptable. In which case you should leave them be.
Enacting change too soon can be as harmful as when it is too late. It is important for HR to make senior leadership aware of this, to prevent the organisation from transforming too soon and disrupting itself out of business.
Freek Vermeulen is professor of strategy and entrepreneurship at London Business School and author of Breaking Bad Habits - Defy Industry Norms and Reinvigorate Your Business