Transformation and Future Shock
Addressing the fear of disruption
The main trigger for most companies’ digital transformation is disruption. As a result, the goal for most transformation programmes becomes how to identify what is going to happen next and how to respond to it. Unfortunately, just because we can predict some new technology or extrapolate out a customer trend using some new innovation, it does not mean that we are prepared for that future. Since the majority of digital transformation programmes do not deliver what was expected, there is clearly something that is not being addressed.
One of the key reasons for these failures is resistance. In order to understand why there is resistance and how to dissolve it, we need to accept that many of us suffer from what Alvin Toffler called “future shock” in his 1970 book of the same name. If leaders acknowledge the fear at the heart of future shock and how that fear leads to resistance, then they can expand their transformation programmes beyond new technology, processes, business models and customers to building a culture that is able to adapt to uncertainty and disruption.
Why most transformations fail
There is a lot of research indicating that the vast majority of transformations fail. There is a range of different reasons given as to why they fail. Often there is a disconnect between the demands of the new, digital world and “business as usual:” existing business models, revenue streams and customers. This causes a profound disruption in the company as it finds itself caught between two worlds. If leaders get their response wrong, as Thomas Davenport and George Westerman noted, looking at GE’s recent transformation initiative, they are punished by the markets and end up losing their jobs.
As the GE example shows, most organisations focus on external responses to the disruption: digital working, innovative products and data-driven decisions. The psychological and emotional aspect of the disruption is seen as something to be managed using established communication and change management techniques.
For example, one of the clients that my consultancy worked with realized that their current business model, a professional membership organisation, was dying out. They brought us in to help them define a new vision of the organisation and how that would expand the customer base, what products and services they would offer them and how they would remain commercially solvent and keep to their mission. After months of consultation with staff and customers, followed by internal reviews of the emerging direction, there was agreement across the organisation on the strategy and plan. We had also road tested the new model with customers and they were supportive. All that was left was to present the plan to the board and we could begin. In the board meeting, however, everything changed. As they began to understand the implications of the direction that had been agreed, there was growing opposition to what became “our” plan. In the end, the organisation did not go forward with any transformation plan and, essentially, carried on ‘business as usual’. While they accepted the idea that the organisation needed to change as a result of a changing environment, they could not let go of the form the business had had up to then. What they could accept was to improve a few things, maybe add a new website, but not discard the overall business model and customer base that had sustained them for fifty years.
Future shock and inner transformation
In order to address this resistance and underlying fear, it seems useful to dust off the term “future shock,” which was popularized by Alvin Toffler. The term has come to be defined as:
The physical and psychological distress suffered by one who is unable to cope with the rapidity of social and technological changes. [Merriam & Webster]
Future shock manifests in businesses when the people in them do not know how to respond to the rapid, ongoing changes in technologies, economics and customers. In the case of our client, the rapid and dramatic upheaval of their business model, while logically understandable, was too much to handle emotionally. They were part of a successful organisation which had represented their profession for fifty years. Their professional lives had been built around the organisation organization and its practices. Even though the finances and membership numbers showed that the model was not working, these were not strong enough to enable them to let go of the past, so to speak, and embrace a relationship with the new environment they were working in.
It was not just the fact that the board was being asked to give up their established business model. It was that the realisation that there was not certainty as to the end state. No one knew if it was right until they tested it out for real. Also, tomorrow something new, like a global pandemic, could appear and change the landscape yet again. In the end, it was not enough to identify various projects to do over the next few years to transform the business. What was needed was also a transformation of the thoughts and emotions of the people in the business.
This inner transformation is more than traditional change management. While change management methodologies have much to offer; as Soren Kaplan noted, the practice has its origins in a different set of circumstances than we are facing now. I would argue, therefore, that, since change management’s DNA is focused toward addressing definable transitions from one state to another,the approach is not effective in addressing disruptions where the new state emerges from a long, unpredictable period of seeming chaos.
In the face of this long-term uncertainty, what is needed is a recognition of our current inner state: our fears, hopes, convictions and narratives that shape how we interpret events and respond to them. Only by addressing them, particularly those related to uncertainty and the fear that it often solicits, can businesses embrace meaningful transformation.
There is a level of humility required to do this. Everyone, especially leaders and their advisors need to look inside themselves and recognize their own starting point, because that also serves as the basis for often unconscious resistance. In the case of our client, it was the unaddressed fears of the board members which prevented the business from going ahead with their transformation programme. Successful transformation starts, therefore, from an honest assessment of our inner world. It then works on building up the curiosity, sensitivity and detachment necessary to see beyond fears in order to be able to leave the”comfort zone” of the old habits and relationships, no matter how counterproductive they are in the new environment.It is through this letting go that we can engage in the challenge and opportunity of uncertainty.
