Organisational Inertia – when we just can’t seem to change
How is it that we can see so clearly what we want to change, and even commit to the new change, but somehow find ourselves stuck in the same ways? Two financial services firms come to mind. They both have a clear stated vision of transformation to be future ready and adaptable in these turbulent times. Yet they continue, despite their stated and affirmed paths of change. They are both performing well against their financial targets and commitments. And so the success indicators remain fixed. And so there is no urgency to change. An inevitable failure in the tide against digital and faceless competitors is seemingly not sufficient drive to turn these organisations around. The immediate gratification of stakeholders and clients keeps the organization from changing. The transformation journey is unknown, uncertain and could lead to failure. And so ironically a vested self interest in the current ‘success’ remains the drive to stay the same. Even if this means an imminent decline.
According to Kegan & Lahey (2001) this immunity to change comes from having a competing commitment. This is a subconscious, hidden goal that conflicts with the stated commitment.
I see this play out with leaders grappling to devolve authority to remote cross-functional teams. On the one hand the manager states the need for diversity, inclusion, empowerment and innovation. But this means the manager loses control and potentially of the quality of the output, and hence tarnished reputation is at stake. The manager stands losing his/ her/ their reputation of high standards, exemplary work and being the ‘go-to person to solve deep technical problems. And this commitment is enough to keep the leader in the traditional mode of command – and- control leadership and even to micromanage the work of their teams.
Not only do leaders have this inertia to change, but so do executive teams and boards. Boards are key to compelling firms adapt to environmental discontinuities, in advising and supporting new strategies. Yet even this presents a dilemma to boards. Being critical of the very board one serves on runs counter to a board members’ self-interest (Hoppmann, Naegele, Cirod & Zurich, 2019). The board may be evaluated critically and deemed to have not been successful should the changes be too disruptive, let alone fail or be received critically by the shareholders.
Even in the face of losing key staff and key customers, organisations remain inert. This begs the question then of how can change be prompted, particularly when the organization is not broken, and when the leaders and board remain inert or at least comfortable in the status quo, at least until their term comes to an end. This runs counter to the old adage ‘if it ain’t broke, don’t fix it. When firms have a good reputation it has been found that managers spend an inordinate amount of time defending them and avoiding potential ‘extreme threats’ rather than responding to them (Parker, Krause & Devers, 2019).
I recall being shocked when part of a core team facilitating future scenarios and the one scenario looked particularly bleak, and being told by external parties to adjust it so that it would not come across as so alarming. We did not. It demonstrated to me though the power of denial. Denial of a current state and the denial of the future trends holds people and organisations ransom to their current situation, inert. We may be so convinced by what we do not want to see that we do not address the issue facing the reality of an unfolding situation or scenario.
It follows then that to start change does not start with holding a glass ball to the future. But rather with an intense look at the present. Discover what the deeply held assumptions are of leaders that compete against the future direction. Inquire as to the golden metrics that shackle boards and executives. Most of all explore what the levers are that drive the organization, both those that drive it to stay the same and those that drive it to change.
Whether a leader or a board, invite the ‘anthropologist’ of yourself self to observe without judgement, to be curious about the patterns you observe. There are patterns of behaviours that serve the current commitments and there are beliefs that underpin these. Identify these and examine their underlying assumptions. Note the contravening patterns or pockets of difference. Make sense or ‘sensemaking’ is a key capacity of all leaders to be able to gain insight from the current context and to see the signs of emerging or counter patterns with clarity of mind and heart.
There are always seeds of the desired change in the system. If these are seen they can be amplified. One firm for example wanted to bring about digitally enabled customer centricity and treated it as if they had never had this before. Yet one division in particular had a proven customer base and growth trajectory that spoke of excellent customer centricity and with the right systems backing this could be amplified. The emerging trends can be better understood to see what the forces are that can sustain the desired change. And use the kernels of insight to build the desired future and to quell the outdated assumptions that compete against it.
The more each leader and each group can witness the desired future and experience it, the more the old assumptions that keep the organisation stuck dissipate. Bring in learning journeys to viscerally see the possibility, build in a futures orientation with leaders and enable learning across teams. Have the conversations not only about the future but about raising awareness of the current patterns. Too often the ‘messenger gets shot’, the one that mirrors back to the leaders, teams and organisations where they are stuck, as the self-protection instinct kicks in. Therefore build the capacity of sensemaking of leaders and teams, have the conversations about the current – both the desired and the stuckness, to be able to make a choice about the changes to reinforce and bolster.
Most of all enable pockets to try out and prototype new ways. Enable action against the new desired behaviours. Change only happens in action. So these need to be safe-to fail experiments or pockets of experiences, so as to overcome inertia. The inertia gives valuable insight into the forces that keep the board, leader or team stuck. But it is in the testing of these assumptions and setting new guard rails that free up new ways. No future is guaranteed but the most we can do is light up new paths and new possibilities.
References
Hoppmann, J., Naegele, F., Girod, B. & Zurich, E (2019) Boards as a source of inertia: examining the internal challenges and dynamics of boards of directors in times of environmental discontinuities, Academy of Management Journal, Vol.62. No.2, 437-468
Kegan, R. & Laskow Lahey, L. (2001) The Real Reason People Won’t Change, Harvard Business Review, November 2001
Parker, O., Krause, R. & Devers, C.E. (2019) How firm reputation shapes managerial discretion. Academy of Management Review, Vol. 44. No2. 254-278
