People are smart, organizations are not
How to make a transformation successful
The situation
We are living in a fast-paced, fiercely competitive world. If we as a company want to stay relevant to the market, we cannot afford to be busy with ourselves.
Releasing a product is not equivalent to business success anymore. Instead of only producing output, we need to concentrate on achieving outcomes by solving problems.
The work environment has undergone a fundamental shift as well. For decades, processes contained “the collective wisdom”. People were measured by following the rules. Today, the world is changing at a speed that processes cannot keep up with. Therefore, employees need to be enabled to make decisions. We need to learn faster than the outside world.
How to get there? And what can you do as a leader? There are several sources of inspiration, like John Kotter’s “8-step process for leading change”, Esther Derby’s “7 lessons from a top-down change” and the exhaustive list of “High-Performance Team, Management, and Leadership Behaviors and Practices” by Steve Bell and Karen Whitley Bell.
In this blog post, I want to concentrate on the idea that “when you want to go from world A to world B, use the tools of B, not of A”. If we want to leave the world of a process-heavy, top-down managed company, we cannot implement such a transformation by only using projects and the view from the top. For such a transformation to succeed, it must be lived and present at all levels of the company.
How to engage people
How to get the bottom-up buy-in that is often missing? People are smart. They are like investors, only with time instead of money. They hear about great proposals all the time. They want to see evidence before making a larger investment.
Employees know whether change is for real by measuring:
• what gets attention from management
• what keeps them busy every day
• what gets incentives by the company
Any initiative that aims to transform the company needs to be at least as present as the delivery of projects and products which all have their vocal sponsors. If you are involved, show at every meeting an example of what has changed in the organization since last time, what we have learned. Do this for some time and people will get the message. When people experience change, they do not need to believe in it. Otherwise, you can only engage idealists.
Changing everyday work life can be as simple as getting your new colleagues a coffee mug with the company logo on it. Or not referring to human beings as “resources”.
Ingredients for performance
Transformation is about doing things in a way fundamentally different from how we have learned and done them. Suddenly, prior experience and “what made us successful until now” is questioned. Of course, that makes a lot of people feel uncomfortable. The good news is that even if our ways of working are outdated, our skills remain valuable.
Change is scary for everyone, yet people change all the time. Humans are natural problem solvers. They will find ways if they are driven by an intrinsic motivation — as opposed to an extrinsic one, like bonuses or fear of punishment. I would even argue that an official goal setting process is bad for identifying people with drive and responsibility, because it hides their quality of getting stuff done by themselves.
Daniel H. Pink identified three aspects of what truly motivates people:
• Autonomy — “organizing my own work”
• Mastery — “becoming better at my work”
• Purpose — “making a contribution”
However, people will not dream big if they are afraid all the time. A fundamental condition for performance is psychological safety: Team members feel safe to take risks and be vulnerable in front of each other. Amy C. Edmondson has explored and shown the link between company culture, psychological safety, and high performing teams. A Google study about high performing teams found that psychological safety was “far and away the most important of the five dynamics we found”.
You as a leader play a vital role in establishing psychological safety and the right culture. You need to set the example. If you play it safe in times of uncertainty, who will show courage?
What you can do:
• Ask open questions, present a problem to be solved, a question to be answered.
• Frame the challenge as a learning experience and allow people to try things out — because we cannot know upfront.
• Seek direct input from the teams about their biggest pain points. Get a first-hand impression on what is standing in the way of delivering customer value.
Eliminate waste
To shine as the creative problem-solvers that they are, employees need time to use their higher brain functions. Nobody is original when continuously overloaded. The busier our colleagues are with “working according to the rules”, the less time they have to crack complex problems. Even worse, if there are only concrete, measurable incentives for “staying on track”, innovation will be skipped altogether.
If we want a transformation to succeed, we need to make a choice about what we will not do. To achieve more, we must do less. Every change brings the opportunity to get rid of something that once may have seemed necessary but now has become a burden.
In the old world, processes, policies, and approvals were the default response to anything going wrong. Today, all these internal rules slow down the flow of value, creating the bigger risk that the company cannot respond to changing customer needs in time. James Birnie calls this “Risk Management Theatre”.
Imagine that a teams needs to collect 5 approval stamps for anything they want to deliver to their customers, no matter how reliable they have been in the past. The entire process takes 4 weeks, compared to a development time of 2 weeks and a release time of 15 minutes. The added value to the customer is negative — the delivery of the solution is delayed, thereby increasing the overall risk.
Why do we have these dysfunctional processes in the first place? Sometimes they were a fit for a different pace of work. Sometimes people still get different, conflicting goals — thus incentives to work in silos.
If today our customers do not experience us as one company, that is an example of Conway’s Law. Melvin E. Conway said that “any organization that designs a system (defined broadly) will produce a design whose structure is a copy of the organization’s communication structure.” The outside world will not reward misalignment or internal bureaucracy.
True change means improving the overall flow from idea to customer. Everything else is just a facade. An activity called Value Stream Mapping can create the necessary transparency about the flow of value.
For setting, measuring, and achieving goals together, we can use Objectives and Key Results (OKR) or work with Evidence-Based Management (EBM). As a leader, you can use Conway’s Law to your advantage: Create teams for your goals, not goals for your teams.
We need to put trust in the people, not our processes. It is time to revisit and reinspect all our internal rules that are signs of mistrust. Trust is not blind faith. Trust can be earned. Trust works both ways.
Key takeaways
If you are interested in profound change:
• Establish a shared end-to-end view on the flow of value from idea to customer.
• Replace internal measures of success with external ones.
• Work on trust within the company — the people are worth it.
What do you think about this? I will be happy to hear from you!
(This is a slightly edited version of an opinion piece that I got published two years a go on the intranet of my current employer. As I keep coming back to the concepts and arguments used here, I found it valuable enough to be publicly available.)
Götz Alsmann: People are people
