Managing Change: Preparing for the Workplace of the Future

“It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.” — Charles Darwin

Experts agree that change and transformation has a much greater chance of success when organisations pay attention to ‘people issues;’ particularly those that foster collaboration amongst leaders and employees while also building capabilities. Recent research by McKinsey & Company found that successful change and transformation initiatives all have the following in common:

• Collaboratively building a clear structure outlining what is to be achieved;
• Strong leadership, and giving ownership of initiatives to employees;
• Increasing leadership capability (this was particularly significant in transformations that succeeded in improving long-term organisational health)
• Communications around the transformation were positive and celebrated success, rather than being focused solely on the need for the change. ^1.

Leadership Capability

In conjunction with American Express, ChapmanCG hosted 30 of Australia’s top HR leaders at a discussion forum in Sydney last month to examine the topic of ‘Managing Change: Preparing Australia for the Workplace of the Future.’ All participants agreed that leadership capability is a key ingredient to successfully navigating change and future-proofing any organisation. Specifically, developing leaders with high levels of change agility, a ‘Growth Mindset’^2. and ‘Enterprise Thinking’^3. were all high on the agenda.

Simon Terry is a management consultant who helps organisations to enhance strategic value creation, enable digital transformations and realise the full potential of employees. His blog post entitled “The Future of Work is the Future of Leadership” articulates what leaders need to focus on in order to realise human potential. The good news is that these ‘new’ practices can be highly effective – and they can be taught. According to Terry, “Managers now need to pick these up and build the capability in their people to lead in new ways, using:

1.Deeper self-awareness and understanding of human behaviour and the drivers of high performance;

2.A greater focus on systems and a wider view of outcomes and stakeholders;

3.Purpose and trust to enable leadership, as well as followership, in every role;

4.Experimentation and Adaptation;

5.Collaboration and Cooperation;

6.Network models of work organisations like ‘Wirearchy’, Pods and Swarms

7.Social work and learning, such as personal knowledge management, working out loud”. ^4.

Changing With the Times

Many of the management techniques that are employed today were developed during the industrial revolution and are arguably now obsolete. In his book ‘What Matters Now,’ Gary Hamel identifies the following five critical areas that leaders need to focus on, which will determine whether an organisation ‘thrives or dives’ in the years ahead:

1) Values: Trust in corporations has never been lower, and there is an urgent need to ‘rebuild the ethical foundations of capitalism’ by looking after your people. Hamel says we need a ‘moral renaissance’ in business, and the only way leaders will do well is to do well for others — not themselves.

2) Innovation: Hamel believes most companies have assigned innovation to a chosen few, and in doing so have developed a ‘creative apartheid’. Most of the time innovation is simply reduced to a buzzword. Traditional hierarchical organisational structures can be similarly disabling for creativity. Innovation is, however, the only means of survival in a future dominated by globalisation and hyper-competition.

3) Passion: Hamel defines passion as the difference between ‘insipid’ and ‘inspired’. He believes leaders need to design new workplaces and find new ways to ‘rouse the human spirit’ so that people can bring the ‘gift’ of passion to work.

4) Adaptability: To be successful, companies must build an evolutionary advantage by becoming agile and fostering the ability to ‘change as fast as change itself’. In a world of exponential change, we must overcome our tendency as humans to resist this and remain inert.

5) Ideology: Hamel argues convincingly that we need to flip the tradition of the top-down workplace and ensure that more freedom, transparency, autonomy and self-determination take its place. Imposing more policies, processes and bureaucracy are traps we need to avoid. ^5.

Hamel believes that ‘future proofing’ yourself and your company in these chaotic but exciting times is all about making workplaces that are ‘fit for humans,’ so that the fullest human potential and creativity can be unleashed.

Disrupting the Old Model: The Bottom-Up Approach

Traditionally, organisational change was driven by management and trickled down throughout the business, but today successful companies often turn this model on its head. One of the best examples of the bottom-up approach to change is Semco, a privately owned manufacturing and services company in São Paulo, Brazil that is often described as “the world’s most unusual company.” Subordinates choose their leaders, and leaders almost always come from within the company to avoid the disruption that comes from a new leader implementing sweeping changes, in order to make a good impression. Employees pick their working hours, jobs, titles, places of work, and even their pay. Everyone in the company has a 360-degree evaluation every six months, which form the basis of any needed change. Four people rotate through the position of CEO every year. The company does not create annual budgets, preferring to do them every six months because that is as far ahead as it can realistically see.

Semco has redefined change: for this company, instead of being the work of senior leaders, it is the responsibility of what President, Ricardo Semler calls ‘atoms,’ which are groups of eight to twelve employees who see to the company’s basic processes. As a result, change becomes continual, gradual, low-level–and virtually unnoticed. By relinquishing the need to be in constant control, change happens on its own without being imposed from above. This approach has enabled Semler’s company to eliminate the type of schoolyard bickering that can take up to 20% or 30% of managers’ time–and that many formal change programmes are designed to address. ^6.

Zappos is another more recent example of a self-organising model of governance, also known as a Holacracy. Tony Hsieh, CEO of Zappos, commented, “Research shows that every time the size of a city doubles, innovation or productivity per resident increases by 15 percent. But when companies get bigger, innovation or productivity per employee generally goes down. So we’re trying to figure out how to structure Zappos more like a city, and less like a bureaucratic corporation. In a city, people and businesses are self-organising. We’re trying to do the same thing by switching from a normal hierarchical structure to a system called Holacracy, which enables employees to act more like entrepreneurs and self-direct their work, instead of reporting to a manager who tells them what to do.”

Conclusion

Having passionately engaged
employees who provide amazing customer care is what the ideal future of the workplace is all about. In today’s business environment, where there is some form of market disruption in almost every industry, it is critical that companies have the flexibility and the capability to handle transformation. Gary Hamel refers to the current state of play as a, “world of relentless change, ferocious competition, and unstoppable innovation,” where evolution is inevitable. Maintaining a highly empowered and engaged workforce as your organisation goes through transition must be a priority, and one way to achieve this is to invite employees to co-invent the new management model and to share the leadership franchise around.

1. “What successful transformations share: McKinsey Global Survey results”, March 2010 by Scott Keller, Mary Meaney and Caroline Pung at McKinsey & Company
2. See Carol Dweck’s TED Talk on The Power of Believing that You Can Improve
3. See the ‘CEB Network Leadership Model’
4. “The Future of Work is the Future of Leadership” by Simon Terry, 2014 Simon Terry Blog
5. “What Matters Now: How to Win in a World of Relentless Change, Ferocious Competition, and Unstoppable Innovation” by Gary Hamel, Jossey-Bass, 2012. See also the Proteus Leadership Summary
6. “Do You Have Change Fatigue?” by Nick Morgan, Harvard Business School Sept 2001 Do You Have Change Fatigue Article, also see the book “Maverick: The Success Story Behind the World’s most Unusual Workplace” by Ricardo Semler, Grand Central Publishing, 1995.