When Transformation Walks Out The Door

Employees engaged in transforming your business to master future challenges, who are not appreciated for it or even see their efforts reversed by management or executive decisions, may quit - and take their engagement and ideas with them.

Teppo Felin raises an important point in corporate strategy in his Fall 2016 MIT Sloan Management Review article: "When Strategy Walks Out The Door: It’s ironic that companies often spend significant resources on external strategy advice while ignoring one of the most fruitful sources of strategic insights: their own employees. Unfortunately, employees whose ideas about strategy aren’t listened to may quit — and take their ideas with them."
To read the MIT SMR full article, please follow this link:
When Strategy Walks Out The Door

The same is true in my experience for employees engaged or highly engaged in transforming the behavior, culture, collaboration and communication within the organization. Repeated effort is always required if you want to change how people behave and collaborate. It is one thing to take the decision to change, and it is another to actually change all the habits and well established ways sustainably. This requires discipline and repetition.

In many organizations, as most are designed along the pyramidical hierarchy adopted from centuries of feudal systems, Executives / Leaders / Managers apply diagnostic change: diagnose where the organization and its people are, define a desired state fitting to their own view and understanding of the future, delegate implementing the change to a project team - often run and/or supported by external consultants - and then attend Steering Committees (SteCo) to control the progress.
Few / some decide for many and expect the many to implement their ideas.

Let's take the perspective of an internal employee, most of them are individual contributors, team leads or middle managers. They are measured against their targets, which usually do not change just because there is a change project.
As the executive team hired state of the art consultant, the change project shall use agile methods and social prototyping, inviting a measure of self organization and trust of the engaged employees. They start working, prototyping new ways of collaborating, exchange and build a community. It takes a while, and then the changes start to take root, building momentum and reaching a tipping point, where more and more employees are attracted tp the project. It's requiring quite some effort, but they see the change they can bring to life and invest their time and energy readily.

This is every change consultants dream come true.

What happens next?
As per design and paradigm, the Executives are steering the process without being a part of it. Hey, who has got time for that on that level? The Steering Committee gets their powerpointed update regularly and feel in control.
Behind the scenes, there is a dangerous disconnect. You can see that in the decisions by the Executives taken seemingly unrelated to the change project - and often heavily affecting what the engaged employees are working hard to establish.
Just one example from two perspectives:
everyone sees their markets crumble and know they have to establish new business models, services and gain access to new customer groups.
a) Every time the executives and their management team discuss the R&D budget, they start their discussion with the established products. When they finally reach the innovative new portfolio elements, they have reached the end of the discussion time and ran out of money.
b) engaged employees develop a new idea and find a pilot customer who wants to follow up on the idea and co-create a solution. The team needs some seed money to get the first pilot up and start the collaboration. They are funneled into a "New Business Ideas" meeting to present their idea within 10 minutes - and fail to get the required support despite their lobbying and being part of the change effort.

And then? - for highlighting the point, let's assume a worst case scenario:

Sooner or later, usually after 18-24 months, the overall organization is starting the next big reorganization (shuffling the boxes to change the value creation process), if required by the market the next restructuring (shuffling the boxes including laying off people).

  • The new management positions are staffed with managers from the business network of the hiring person, without regard for their willingness and track record to contribute to the change.
  • Established communities and structures are ripped apart and every change driving employee has to educate their new management why they are working as they are working.
  • Team Leaders and Managers loose their established teams and have to recreate the change friendly environment with new people they often did not select.
  • the (internal) change team members loose their reporting line to the higher management and are established as a department in HR or the Learning community.

And everyone is set back and has to start new.
Most of these change drivers do not expect a flower bouquet on their desk every week, or a thank you email every month. They often get that - and see it only as lip service as the real decisive elements for them to feel recognized are if they are supported to establish and sustain the new way of working and collaborating, and being rewarded in their career by getting more responsibility - or at least feel that the aspect of change willingness and a proven record for it is part of the selection criteria.
In my experience, a really engaged employee manages 2-3 rounds of this before either giving up on supporting the change ("Change Fatigue") or leaving the organization to look for a place where their engagement is sustainably used to push the organization forward.

They take the energy and drive to change with them - and the organization gets stuck with those people who do not want to change readily. All the while the market is requiring more and faster changes.

What are you doing in your organization to prevent your best transformation to walk out the door?

Diagnostic change management worked well (enough) in the last century, when business and markets changed within a decade or two. In todays business world, where market after market reaches the step from linear to exponential growth through digitalization and globalization, diagnostic change and delegating the implementation to a project team is too slow and poses other risks for the leader.

That is a topic for the next blog - stay tuned!

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