Your Company Keeps Doing the Same Thing Over And Over Again, And It Doesn’t Work, and Here’s Why

Why most organizational transformation efforts are more or less the same — and why most of them fail.

The many flavors of organizational transformation. (Illustration by Joan LeMay)

This is a modified transcript of a talk I delivered at O’Reilly Radar 2018. It speaks to many of the concepts I describe at more length in my new book Agile for Everybody, and to the work I do with my partners at Sudden Compass. The general shape of this talk can be summarized as follows:

  • Most organizational transformation paradigms, from “digital transformation” to “Agile transformation” to “Design Thinking transformation,” are mostly the same.
  • These paradigms share three fundamental principles: start with your customers, collaborate across functions and silos, and plan for uncertainty.
  • Organizations fail to put these principles into practice because they approach transformation as something they can buy, not something they must do. Thus, the cycle of failed “transformation” continues, and business as usual goes largely unchanged and unchallenged.

Today, I want to talk about organizational transformation. Organizational transformations are kind of like potato chips — there are many flavors to choose from, and they usually seem like a good idea at the time, but you rarely feel good about them afterwards.

One of the first flavors of transformation I encountered was digital transformation. This started about fifteen years ago, and I’m still hearing about it today, even though the word “digital” in this context feels profoundly dated — and probably makes zero sense from your customer’s point of view.

Companies want to be “digital” — but in many cases, they have literally no idea what that means. They throw around words like “disruption” and “innovation,” but they’re not really sure what their specific goals are — or what about their existing practices they need to “transform” in the first place. So they start by doing something they already know how to do quite well— buying stuff. They upgrade their CRM system. Maybe they invest in some fancy new data architecture. If they’re really committed to this “digital” thing, they hire a “Chief Digital Officer” from one of those big fancy tech companies.

…. But a year or so later, nothing has really changed. People are struggling to learn the new CRM system, and migrating to that fancy new data architecture has proved slower and costlier than anybody anticipated. That new Chief Digital Officer talks a big game about “cross-functional collaboration,” but seems more interested in consolidating power than in breaking down silos. Those same ambiguous concerns that created the perceived need for a “digital transformation” are still there — only the organization is now another year behind.

And then somebody hears about Agile. Agile sounds fancy. It sounds good. And if you haven’t heard — it’s the secret to how those fancy tech companies create innovation after innovation! Clearly, this is what went wrong with that “digital transformation” — it wasn’t Agile enough!

So, a small army of “Agile consultants” is hired. These consultants arrive fully equipped with a three-to-five-letter framework and piles of documents, manuals, and diagrams. They say “iterate” a lot. They assure you that they’ve seen it all, and they know exactly what your organization needs to do in order to compete with those big “best-in-class” tech companies.

…. A year or so later, everybody is talking like those Agile consultants. Doubters and skeptics are accused of clinging to “waterfall” ways of working that stifle innovation. People have learned the rules of an Agile framework, and are following those rules to the letter. And yet, beneath that jargon, not all that much has actually changed. Mirroring a situation that one Agile coach described to me in Agile for Everybody, the organization is still having exhausting and pointless meetings, but those meetings have been given fancy new names. I’ve seen many cases where companies still make rigid and inflexible years-long product plans, but then cram those plans into the “backlog” prescribed by their chosen Agile framework, in effect following the letter of the law while willfully ignoring its intent.

Eventually, the gap between theory and practice becomes too vast to ignore. This “Agile transformation” is declared a failure — in many cases, juuuuuuust as those Agile consultants are moving on to the next company. And then, just in the nick of time, somebody hears about Lean Startup, or Design Thinking, or some new thing that somebody is going to ask me about next month. This, finally, is what was missing — that whole “Agile transformation” thing was just too operationally focused, and didn’t give people the creative tools they really need to think like innovators and entrepreneurs!

… and so it goes, time and time again. I’ve seen some companies go through three to five of these “transformations” in just a handful of years. Each new transformation paradigm promises to address the shortcomings of the last, and each one ultimately fails to deliver meaningful and substantive change. Years pass, and business as usual continues largely unchanged and unchallenged.

I’ve seen many organizations and consultants take a Goldilocks-like approach, trying to find the one transformation paradigm that will be “just right” for a given team or organization. But I’ve rarely, if ever, seen this turn out well. If an organization can’t make meaningful change when starting with one set of ideas, it’s easier — but ultimately much less productive — to blame those ideas, rather than to take a long, hard look at the organization itself. And besides, nearly all of those organizational transformation paradigms, from the classic “digital transformation” to newer ideas like “Business 4.0” or “the Spotify Model,” are mostly the same thing.

When I set about researching Agile for Everybody, I was expecting to encounter heated debates about the finer distinctions between Agile, Lean, and Design Thinking paradigms. Instead, I encountered an overwhelming consensus that these paradigms are much more similar than they are different. Not only do they involve similar tools and tactics (rapid prototyping, customer interviews, working in short iterations), they all revolve around a very similar set of guiding principles: start with your customers, collaborate across functions and silos, and plan for uncertainty.

In fact, the process of choosing a transformation paradigm often tells you more about the organization making the choice than it does about the paradigm they choose. As product researcher Dr. Anna Harrison pointed out to me, organizations who want to be faster are often drawn to Agile. Organizations concerned with efficiency are often drawn to Lean. Organizations who want to improve usability are often drawn to Design Thinking. Sometimes, it’s even simpler than that; organizations whose transformation is driven by IT choose Agile, organizations whose transformation is driven by product choose Lean, and organizations whose transformation is driven by design choose Design Thinking.

All of this brings us to a big question: if most of these paradigms boil down to the same ideas, and those ideas are good ones, why do these transformations keep failing?

One clue comes from this excellent book, Bad Science. In it, Ben Goldacre describes “the proprietization of common sense”; the practice of taking a fairly straightforward good idea — like eating vegetables or drinking water — and dressing it up in just enough opaque and proprietary nonsense that it can be, as Goldacre says, “copyrightable, unique, and owned.” Goldacre introduces this concept in the context of personal health and wellness, but it’s not hard to see how it’s applicable to organizational transformation as well.

Due in part to the proprietization of common sense, there is always some new “copyrightable, unique, and owned” transformation paradigm for companies to buy. And this suits most companies just fine. Because the hard truth of the matter is, while most organizations talk about “transformation,” the actual steps they take to achieve this begin and end with transactions. Thus, “digital transformation” becomes a pile of expensive software licenses. “Agile transformation” becomes an ever-growing tally of consulting hours. “Design Thinking transformation” becomes a series of enjoyable workshops that don’t connect with the day-to-day needs of the business. These transactional markers of success provide reliable and low-stakes boxes that can be checked off, offering defensible evidence that something is happening — even if it is only happening superficially.

Of course, the values and principles at the heart of these paradigms will tell you quite plainly that true change is about people and culture, not licenses or consultants or workshops. But changing people and culture is harder to scope, harder to accomplish, and harder to measure than adding line items to a budget. And, perhaps more importantly, those line items can provide the window dressing of organizational change without challenging the existing incentives, behaviors, and expectations that organizational leaders often bemoan in theory, but depend upon in practice.

The truth is, if we really want to transform our organizations, we need to start by understanding what we are transforming from and to in the first place. We need to be able to ask and answer the one question I’ve found most important for people who share with me their grand vision for how a particular transformational idea will work: “if you know what your organization should be doing, then why aren’t you already doing it?” In other words, if you want to be “digital,” why are you keeping your technical teams siloed from core business stakeholders? If you want to be “Lean,” why do you have 50 “senior directors” doing more or less the same job? And if you want to be “human-centric,” why is nobody in your organization actually talking to customers?

The answer is rarely, if ever, “we haven’t bought enough software licenses or hired enough consultants.” Instead, these conversations often reveal the real-world limitations that eventually scuttle most “by the book” transformation initiatives. Organizations in highly regulated industries like banking and pharma, for example, often believe that legal and governance concerns will make true “Agility” impossible — even as they invest heavily in off-the-shelf “Agile transformation” initiatives. Identifying these beliefs and expectations upfront often makes it possible to adjust a change initiative rather than abandoning it altogether.

And therein lies the hardest part; if we truly want to prepare our organizations for the future, we must stop looking for silver bullet solutions that will do the hard work for us. The high-level principles guiding successful organizational change, it turns out, are not all that complicated: start with your customers, collaborate early and often, and plan for uncertainty. Putting these principles into practice requires different tactics for different teams and organizations — and requires the discipline to adjust course rather than throwing up our hands and moving on to the newest flavor.

Thank you!