Futurist Alvin Toffler said, “Change is not merely necessary to life – it is life.” This is truer today than ever before. The rate of change is constantly accelerating, and all organizations are faced with a choice: keep pace or die. No one disputes the necessity of change. Then why is change so hard?
I was listening to a podcast the other day from Lean Startup and something Eric Ries said caught my ear. “Two things are true in all companies: everybody complains about the status quo, and nobody wants to change.” Now, I think the latter part is overstated; I don’t think it’s that people don’t want to change. But people do resist change. Why is that?
With change comes a lot of uncertainty, and that can lead to a feeling of a loss of control. Especially when it comes to transformational change, that kind of change that will put your organization on a completely different growth path, but will require the team to learn new skills, adopt new ideas, and work in a very different way. The more transformational the change, the bigger the change curve will be – and the most forward-thinking companies know that you ignore this at your peril!
The Digital Revolution
We are in the midst of the digital revolution. With the explosion of data, the number of experiences you can build for your customers is growing at an exponential pace. The experiences that leading companies like Google and Apple offer today couldn’t have been fathomed five years ago – just as the experiences we’ll have five years from now can’t be imagined today. So, for a lot of organizations, the change is digital reinvention; how do you transform your company to be able to deliver on consumers’ ever-increasing demand for personalized, real-time experiences? Of course, that means changing your technology. But it also means changing how you are organized, how you work, and most importantly, changing your mindset.
This is no easy task for any company, but it can be especially daunting for established companies. They have had a winning strategy in the past, which can give them a bias towards what is tried and true. But when it comes to the digital world, it couldn’t be more true that what got you here won’t get you there. They are more likely to be tied to legacy technology that they are struggling to modernize – while still running their business. They see young FinTechs and start-ups that can move much faster and are starting to eat away at their customer base. And so, while people within these organizations will readily acknowledge the need to become digital, they will just as quickly become skeptical about the likelihood of success. That is why change is so hard.
I spent the last four years helping drive the transformation at a company that was trying to move from a more traditional bank to a digital leader. Were we successful? Well, first of all, four years sounds like a long time. And we certainly weren’t done when I left last month to start Payson Solutions. It took longer than I thought. It was harder than I thought. But what really caught me off guard? The resistance to change was much greater than I thought.
Yet, I would absolutely call it a success. The organization is now designed around the customer, rather than traditional siloes. Most systems are API-driven and delivery speed is much, much faster. They have digital properties and experiences that customers rave about. And the team is so much further along the change curve than when we started the journey four years ago. I am so proud to have been part of that journey, even with all the ups and downs. And, of course, as the executive leading the change, I still have the battle scars to prove it. So, I thought I would share some of my biggest lessons I learned along the way.
Lesson #1 – Always lead with the Why
The single biggest reason change efforts fail to gain traction is that they are perceived as change for the sake of change. “We don’t know why we’re going agile, we just know everyone else is doing it.” Nothing will kill momentum faster than people feeling like they are a pawn to their senior leader’s flavour of the month. To truly buy into the need for change, people need to connect to a greater purpose – the “Why”. For us, that was helping Canadians achieve their financial goals and succeed with credit. This is something you can easily rally behind. We know how much your emotional health and personal relations are impacted by how much you feel in control of your finances. So, helping people be in control through better products and experiences is a noble goal that really speaks to people. With today’s technology, that means providing information and experiences to customers real-time, so they can be more in control of their finances. To be able to deliver on that Why is really what necessitated our digital transformation. And a big part of that digital transformation was adopting Agile principles. So much so that a lot of people lost sight of the Why and thought Agile was the transformation itself. And that hurt adoption – Agile started to become the eye-roller and the fodder for the skeptics on why we were doomed in this new digital world. Remember, the goal is to be more agile, not to be Agile. Agile has a lot of great practices but avoid treating it like a religion at all costs. It is always principles over practices and finding a version of Agile that works for your company and helps you get to your ultimate goal. Being able to articulate your Why and true everyone back to that at your All Hands will go a long way towards making people feel connected and invested in the transformation.
Lesson #2 – Change starts at the Top
Leaders are almost always the ones that initiate the change, but do they have the conviction to lead the change all the way through? I’m not talking about at the quarterly town halls, but how they model the change – day in, day out. Do they walk the floor and connect with the team? Do they attend demos and get their hands dirty in product? Do they commit to learning themselves what they’re asking their team to learn? The best leaders do – and this speaks volumes to the organization’s commitment to the change. Nothing helps remove the anxiety and fear we all feel in periods of change then seeing your leader in the trenches, right beside you! It is also very important for the senior leadership team to view themselves and operate as “one team”. People will take their cues from above, and any perception that the senior leaders are not on the same page, or worse, have competing agendas, will stall change efforts and frustrate associates. Spending quality time together as a leadership team discussing the transformation and the change management plan is essential to its success.
Lesson #3 – You can’t outsource Change
How many times have you seen this movie before? Our film starts with the President announcing, with much bravado, a bold declaration at the All Hands. “We are boldly going where no one has gone before. We are going to completely reinvent ourselves from the inside-out into the leading digital company in our space. Who wants to join me?” Flash forward to the next scene where a group of strategy consultants and agile coaches suddenly appear and set up a series of meetings to kick off the new strategy. The President is nowhere to be seen, satisfied that her job is done, and the consultants will deal with change management. After all, that’s what they’re best at, and why else did she bring them in? The film ends with the strategy dying a slow death, the consultants heading off into the sunset, and the President watching them leave, shaking her head and saying, “I guess I just hired the wrong consultants.” Yes, I see the irony – I am now a consultant, after all. Don’t get me wrong; I’m not saying consultants and coaches don’t play valuable roles in organizational transformations. What I am saying is they can’t lead the change. The leader needs to own the strategy. They know the business, they own the resources, and it’s their necks that are on the line. If the team is taking its marching orders from consultants rather than the leader, they will immediately jump to, “is this really our number one priority?” They want to see the leader actively driving the change and leading from the front if they are going to fully get on the bus.
Lesson #4 – Create a culture that celebrates Failure
By definition, change means trying new things. If your transformation is going to succeed, you want the team to experiment, to test and learn, to embrace new ideas. Why don’t people try new things? “I might not be good at it.” “I might break something.” “I might not hit my objectives.” “I might look stupid.” In other words, I might fail. It’s okay to be afraid of failing once in a while; in fact, that can often drive us to greater heights. It’s when we allow that fear to stop us doing the things that can move us forward to achieve our goals – fear of failure – that it becomes a problem. And the culture you create will have a huge impact. Do you reward personal risk-taking? Or do you immediately seek to blame when you make a change and something goes wrong? This is obviously not a new concept. Samuel Beckett’s quote has been a motivational meme in Silicon Valley for years: “Ever tried. Ever failed. No matter. Try again. Fail again. Fail better.” But it’s amazing how many companies say they embrace failure, while their actions speak otherwise. And we know which speaks louder. That’s why early on in the change it is important to be very public about your approach to failure, to get people over the mental hurdle of fear of failure. Don’t just tolerate failure. Embrace it. Celebrate it! With one of my teams, we created a Wall of Failure to celebrate tests that didn’t go as planned – and then we talked about them as a team and shared what learnings we took from those. Some of our best ideas came on subsequent iterations of things that “failed”, where we took the learnings and made some tweaks, and came up with something great.
Lesson #5 – Find an early Quick Win
If people are to buy in to change, they need to believe that the change will create value. But one of the challenges with transformational change is that a lot of the value will not be created on day one. In fact, it’s almost a given that committing to a transformational change will destroy value in the short-term. Think about it. To progress quickly, you will need to free up talent and resources and invest them in the change. And that means stopping investments in your existing products and platforms, which are revenue-generating today. It’s always a case of short-term pain for long-term gain. The problem is humans are often guided more by psychological than logical means. Change fatigue is the biggest killer of transformational change, and it will quickly set in if you don’t deliver something of tangible value, fast. Although I always talked about the biggest, most audacious goals to get people excited for the transformation, I also made sure I picked one thing I knew we could get over the finish line quickly to kick-start the effort. Try to pick something that has the broadest appeal, so it will resonate with the entire team. Often, this is a simple process change but one that is causing a lot of customer dissatisfaction and the team has wanted to fix for years. Having people see that the change is already having a tangible impact will do wonders for building momentum.
Lesson #6 – Don’t underestimate the Change Curve
We’re all familiar with the concept of a change curve: how we move through stages of change, from denial, to fear and frustration, to acceptance and enthusiasm, and finally to commitment. But while the stages of progression are usually consistent, the speed with which people move through the stages can vary greatly. And what I have found consistently is that people are always a stage or two behind where you think they are. During an offsite at my last company, I put a slide up with the Change Curve broken into four stages and asked people to stand up when I called out their Stage. This was almost 3 years into our digital transformation. After 3 years, how many would you expect to be in the third or fourth stage? 80%? That is what I expected. What if I told you it was the opposite? That 80% were in the first two stages? Granted, the majority of those were in the second stage, but that is a long time for people to not yet fully accept the change. Clearly, we had underestimated the impact of the change and hadn’t provided enough support to each individual to help bring them along the journey.
Lesson #7 – Communicate, communicate, communicate
If I had just one mantra to live by when leading a transformational change, it is “you can never over-communicate.” I would turn that into a meme and put it up in the most visible part of my office. We sometimes assume that if we talk about something too much, people will get sick of hearing the same thing over and over and will start to tune out. And that’s how I was initially thinking of my communication strategy when we started the transformation. It wasn’t until later that I realized we were communicating to a very large audience who were not all receiving the same message. I might have told the same story ten times, but some people hadn’t heard it at all yet. What I found really effective was taking an omni-channel approach to my change communication. Some people like to read on their own time, so I started blogging about the change. Some people were visual learners, so we started doing demos. And some people were analytical, so we’d present metrics. But bottom line, regardless of how you spoke to them, the more people felt in the loop, the better they felt about the change.
Lesson #8 – Celebrate the journey itself
I love the old quote by Joe Hyams, “when one eye is fixed upon your destination, there is only one eye left for which to find the Way.” Transformational change is hard; the task can seem daunting and the destination can seem far away. We talked a lot about “when are we going to get to the other side.” The reality is that there is no other side; we will hit milestones along the way, but we will never stop changing. Like I said at the start: change is life. So, take time to celebrate the journey with the team, as well as the big outcomes. Think of something like investing in the resiliency of your delivery pipeline today, so that you can deliver amazing customer features tomorrow. One way of looking at that is, “our lives suck today, but we’ll be so happy tomorrow when we can finally deliver features again.” A more powerful way of looking at it is, “we are learning and growing so much by working on this new technology.” Even though I didn’t always understand the technical challenges or why things took as long as they did, I always tried to find examples to celebrate of learning, and not just customer features. I found the journey to be just as exciting as the destination. And like anything in life, the journey is what you make of it.