Global companies everywhere are constantly describing how the pace of change has accelerated in such a way that everything we do today will be obsolete tomorrow. Our clients frequently ask, “How can we set up our company for success? How can we develop our leaders so that they truly help people embrace change?” These questions pose an important challenge for all leaders. How can organizations embrace change that they cannot predict?
Research conducted by McKinsey claims that 70 percent of change initiatives fail in organizations, and that this failure rate only increases for culture change initiatives.1 These statistics are staggering, and yet, the solution that they suggest is change management. They prescribe relevant and powerful change management tools and frameworks as the key to transformation, but how is this recommendation any different from what organizations have already been trying to do?
Let’s listen to the Little Prince in each of us: Let’s have the courage to challenge ourselves. Why should we keep using the same tools that haven’t worked for over two decades, producing the same disappointing results? Why can’t we think outside of the box for once?
In this post, I will explore why change management is no longer relevant, and describe why our world is not just a “constantly changing world” but rather a VUCA world. In my second post, I will discuss how to master our new “VUCA” world (without being a superhero, since most of us are not).
Why Change Management is No Longer Relevant
In the 2000s, when change management started to flourish, companies were developing their businesses in emerging countries, streamlining their processes, or outsourcing non-core activities to save costs. Change was something you could plan for, and it was positively desired.
In this context, it was relevant to expect leaders to help people “embrace change,” or see all of the positive things that these changes would bring. At the time, when we talked about change, we could describe it and anticipate its impacts. We knew WHY and WHEN change would occur.
People who started writing about or implementing change management in the 2000s are likely now at the top of companies or consulting firms. Their perception of the world today may be that it is simply a very fast-moving version of the world in the 2000s; hence their focus is simply on improving what they have been working on over these past two decades.
Their big mistake is assuming that the “pace of change” is simply accelerating. The world is not only changing faster, it is truly a VUCA environment: Volatile, Uncertain, Complex, and Ambiguous. In this new era, change happens, but it is the consequence of VUCA events occurring. We can analyze change as follows:
1. Change as the result of a desired action (e.g., A new IT system, the implementation of a new process cut costs or increase customer satisfaction)
In this situation, i.e., when change is desired, companies can still use change management methods, bearing in mind that doing so is costly in terms of time and money.
A wiser option would be developing an agile and positive mindset throughout the company on an ongoing basis. Helping people embrace the right mindset is more powerful for supporting the company’s strategy than creating and implementing change initiatives every time there is a shift in the organization.
2. Change as the consequence of an event that happens unexpectedly (e.g., a competitor launches a disruptive technology that competes with your current offering; as a consequence, you need to move fast to reposition your offering in the market)
In this case, change is not a desired effect; it is the consequence of an unexpected event. The problem here is that it is already too late to implement a “change management” initiative. It would take a defibrillator to save the organization. No matter how quickly the organization responds, it is quite unlikely that the business can be saved.
The only way to prevent this situation is by preventing it from happening. All wise companies should be developing their teams’ ability to anticipate the unexpected, limiting the damage possible in a situation where the undesired really happens.
In both situations, spending time helping people “embrace change faster” is simply a waste of time. In the first situation, change management is too challenging to implement with the necessary efficiency; in the second situation, it is just too late.
Now, I would like to explain why using the VUCA environment is a better approach for understanding the world rather than seeing it through the lens of change.
Why VUCA Is a Better Way to Describe Our World
VUCA stands for Volatile, Uncertain, Complex, and Ambiguous. Created by the U.S. military to describe the geopolitical conditions under which they operated after the end of the Cold War, this term has since been transposed to the business environment. But what does it actually mean for businesses? How does it actually differentiate from a “fast-changing world”?
Let’s pause and consider what VUCA means.
Volatility: Unforeseen events have huge impacts (e.g., An over-the-top player disrupts a market by leveraging big data at scale.)
Uncertainty: Results/outcomes are not granted. (e.g., When making an investment you can no longer guarantee that the ROI is 80 percent reliable due to too many parameters.)
Complexity: The amount of information is difficult to process and can be overwhelming due to many inter-dependencies. (e.g., The implementation of new data analytics systems is overloading people with information that slows down the decision-making process.)
Ambiguity: A situation can refer to different interpretations mainly because of a third party’s positioning. (e.g., The positioning of a key player in your ecosystem is not clear: Can they develop an activity that would represent a serious threat for your current offering?)
How can we be sure VUCA really defines our world? Think about your company or department and try to envision the big picture (i.e., the landscape of the ecosystem in which you operate) and the purpose of your work. Each component of VUCA describes what is happening or could happen in your ecosystem.
The mistake is spending time and effort implementing change to protect yourself from a situation that is likely to happen or that has already happened. In these situations, it is already too late: Costs have exploded, clients have left, or you have completely lost control of the value chain because of a disruptive player.
The truth is that the organization has already failed by taking too much time to respond, or more precisely, to anticipate what was going to happen.
Encouraging leaders to “help people embrace change” is like asking them to cure the symptom rather than the disease. The challenges have shifted from “successfully implementing change” to “making the right move at the right moment.”
In my next post, learn the three steps you need to take to master the VUCA environment your organization is facing.