Disruption and change are going mainstream. Is your organization ready?
Over just the past several years, your organization has likely been impacted by some or all of COVID19, rapid technological advances, societal upheavals, extreme weather impacts, supply chain disruptions, war in Europe, inflation, and changing markets.
We know that the pace of change is accelerating, yet are you ready and able to adapt just as quick? For most organizations, the answer is no, we are not ready.
Yet, it is urgent for humans to figure out how to quickly reshape organizations, governments, civil societies, businesses and infrastructure to be resilient and adaptive to change.
Let’s look at the sources of disruption and change, how leaders have successfully lead through change, and some inspirational ideas about how we should think differently about our organizations.
The next 20 years will bring constant disruption and change.
Climate Change Impacts
According to the latest (sixth) assessment report1 prepared by over 234 scientists for the Intergovernmental Panel on Climate Change, at current rates of global warming we can expect larger and more frequent disruptions due to extreme weather events. These 2022 events directly impact our communities, how we live, work, go to school, what we can purchase and the food we put on our tables:
- Record-breaking heat waves baked India and Pakistan, then monsoon flooding left about a third of Pakistan under water, affecting an estimated 33 million people. More than 1,500 people died in the flooding, an estimated 1.8 million homes were damaged or destroyed, and hundreds of thousands of livestock were lost. Food for the coming seasons will be in short supply.
- Extreme heat in Europe led to wildfires, especially in Spain and Portugal. Electricity generation in France plummeted, with low rivers reducing the ability to cool nuclear reactors, and German barges had difficulty finding enough water to navigate the Rhine River.
- In the United States, the West and the Midwest suffered through intense heat waves, and the crucial Colorado River reservoirs Lake Powell and Lake Mead hit record lows, triggering water restrictions. Yet, the country also saw major disruptive flooding in several cities and regions, from Death Valley to the mountains of eastern Kentucky.2
The Transition to a Low Carbon Economy
Transitioning from fossil fuels to electricity from renewable energy sources will require a wholesale re-organization of energy supply chains and development of new power grids on an unprecedented global scale. Electric cars will be easier to develop compared to the challenges of building an electric power grid that will move electricity from renewable wind and solar farms to population centres. In Canada and the United States, some of the best regions for providing wind and solar energy are far away from most population centres.
Growing Competition Across Sectors
Increasing demand and the lack of skilled labor in certain sectors is preventing businesses from capitalizing on market opportunities. A recent report by the Canadian Manufacturers and Exporters (CM&E) reported $7.2 billion in lost contracts or penalties and $5.4 billion lost in new investments due to lack of skilled labor.3
COVID-19 pandemic was massively disruptive on a global scale, forcing businesses, schools, governments and people globally to adapt in ways that were unheard of before the pandemic. These disruptions are forecast to continue well into 2023. The impact is that some things, especially how we work and get an education will be changed permanently. This in turn impacts how our cities are developed and where people choose to live.
In addition to the above global impacts we also face high inflation, the war in Ukraine, and increasing authoritarianism and competition from China. These disruptors pose direct risks to those organizations assuming they can still operate “business as usual”.
Leading Through Times of Great Change
Leadership is about being entrusted with a large influence over the health of an organization. Often we expect leaders to set the direction. Direction means knowing where we are going, and then we can establish goals, milestones, plans, penalties and rewards. We follow that plan to reach our goals. The assumption is when we reach those goals, some measurable benefit will have occurred. But what happens when the well laid plans fall apart due to disruption and change?
Change and disruption are not new, as history proves. Rather, the pace and types of changes are rapidly accelerating and complex. By leaning on the wisdom of the highly effective leaders of the past it may be easier to understand how to navigate the new normal of uncertainty.
The 34th United States President Dwight D. Eisenhower had many highly consequential successes through a hugely disruptive period in human history.
Dwight D. Eisenhower, was a 24 year old Lieutenant in the US Army when World War I broke out. He lost his first child to scarlet fever at age 3. He was 39 when the Great Depression started and 49 when World War II began. He led forces throughout World War II, was the Commander of all western forces in the D-Day invasion and lead allied forces to defeat Nazi Germany. He then was appointed governor of US occupied Germany. He championed US involvement in the United Nations and NATO. He was commander of NATO during the Korean War and saw the Soviet Union go from being allies to the cold war enemy. He won the Republican nomination and served as the 34th US President for 8 years, where he created the program to create the US Interstate highway system, created NASA, led the desegregation of the armed forces, and signed the civil rights acts of 1957 and 1960.
“Plans are worthless, but planning is everything.”
Dwight D. Eisenhower
Eisenhower’s planning quote, in the context of the speech it was taken from, is below:
“I tell this story to illustrate the truth of the statement I heard long ago in the Army: Plans are worthless, but planning is everything. There is a very great distinction because when you are planning for an emergency you must start with this one thing: the very definition of “emergency” is that it is unexpected, therefore it is not going to happen the way you are planning.
So, the first thing you do is to take all the plans off the top shelf and throw them out the window and start once more. But if you haven’t been planning you can’t start to work, intelligently at least.
That is the reason it is so important to plan, to keep yourselves steeped in the character of the problem that you may one day be called upon to solve–or to help to solve.
Now in the statements I have made, I don’t mean to say there are not some verities, some unchanging truths, although again, to quote a military man: The only unchanging factor in war is the most changeable, uncertain, unpredictable element in war, and that is human nature. But the human nature of today is exactly what it was, apparently, in the time of Pericles and Alexander and down through the ages to this day. Everything else, even terrain, even weather, seems to change.
So you do have that one point from which to start, that you are going to have the same kind of people to meet with, the same kind of human problems to solve that your predecessors have had all the way back to the Pharaohs. Otherwise, I wouldn’t pin my faith to the tomes we piled up and to the plans, although there will be in them some statistics that are correct, probably, unless the reserves of nickel and so on which you are counting on are all hit by some horrific bomb. But you must plan, you must learn, you must steep yourself in these problems against the time of an awful catastrophe and we must study.”4
Dwight D. Eisenhower
Eisenhower’s many accomplishments were not from following a plan based on his or other’s prediction of the future. His approach to the craft of effective leadership did not look at all like a project plan. His approach to leadership was to use planning:
“to keep yourselves steeped in the character of the problem that you may one day be called upon to solve – or to help to solve.”
By deeply studying and understanding the character of the problems, he and his team could adapt to find different solutions based on the context they faced, be it fighting in war or negotiating the build of an interstate highway system through 49 states, affecting thousands of land owners.
An Organization Built for Continual Change
Eisenhower was unique in his success at leading through change. Few organizations have successfully navigated constant internal change. However, there is one standout organization that has shown it is possible.
In the brilliant article “No Satisfaction at Toyota” Fast Company magazine (12-01-2006), Charles Fishman tells the story of a company culture at Toyota that consistently delivers high quality products for its customers, a meaningful workplace that benefits and empowers workers, and industry leading profits for shareholders. A company that, through millions of individual actions, learns, grows, improves and adapts.
“What is so striking about Toyota’s Georgetown factory is, in fact, that it only looks like a car factory. It’s really a big brain–a kind of laboratory focused on a single mission: not how to make cars, but how to make cars better. The cars it does make–one every 27 seconds–are in a sense just a by-product of the larger mission. Better cars, sure; but really, better ways to make cars. It’s not just the product, it’s the process.”
Charles Fishman, No Satisfaction at Toyota5
Toyota Is Different Because of One Fundamental Realization:
Your Organization is a Product
What are the implications of this statement?
Companies make products to meet the needs of its customers. Let’s call the products created Product 1. If the organization itself is also a product let’s call it Product 2. This product’s end users are the employees. The better Product 2 functions, the more effective it is at enabling employees to meet customer needs.
In the Fishman article about Toyota, he tells the story of the paint shop where 2000 cars are painted every day. Every customer who buys a car wants it painted. If the customer can choose the colour, the car better fits the customer needs compared to a competitor’s car where colour choice may be more limited. The process of painting 2000 cars a day is the feature/ function of Toyota that meets a customer need. The more difficult and costly it is to paint a car, the harder and more difficult the work is on the employees and the less able Toyota is to meet the end customer’s needs. Investing in developing techniques to paint cars that are faster, easier to operate and waste less paint benefit both employees and customers.
If we come to see our organizations as products that can and should be improved, then we can take the same approaches we use to create and improve products to improve our organization.
Organizations and software products have similarities, they both:
- Are designed by people
- Can be changed using an iterative and incremental approach
- Can support a strategy of multiple releases of new features and functions
- Can leverage small changes to reduce risk
- Support the ability to measure the impact of a change on the customers
- Are like software, in that people, processes and tools can change rapidly
Toyota doesn’t have corporate convulsions, and it never has. It restructures a little bit every work shift. For Buckner, the paint-shop improvements aren’t “projects” or “initiatives.” They are the work, his work, every day, every week. That’s one of the subtle but distinctive characteristics of a Toyota factory. The supervisors and managers aren’t “bosses” in any traditional American sense. Their job is to find ways to do the work better: more efficiently, more effectively.
From Abrupt Change and Disruption to Resilient Flow
The accelerated market of changing global demands and disruption will not stop. So organizations must transition to become resilient and adaptive. Agility enables this transition. Like Toyota, improvements can happen every week. With Agility, a comfortable structure can be put in place that is also flexible for consumers and employees and teams to adapt regularly, efficiently, and effectively.
By thinking about the organization as a product we discover, there are many ideas and practices you can apply to improve your organization. These tools include ideas on how to improve processes from Lean (Toyota), reduce risk and improve outcomes with Agility, and finding the right improvements from Product Management practice.
If you treat your organization as a product, then improving that product is the main job, not a side of desk job.
Eisenhower’s philosophy was to lead by deeply understanding the nature of the problem. He realized that the goal of planning and plans are to learn what challenges people could encounter and what options are available to them. People on the front lines will ultimately make the final decisions, so effective leadership is ensuring they have what they need to make the best decision.
At Innovel, our job is to help you and your colleagues as you build a resilient and adaptable organization. We do that by developing your people, so they can be successful and resilient in the face of constant change. Let’s talk.
- 2Summary of the Sixth Assessment Report for policymakers: https://www.ipcc.ch/report/ar6/wg1/downloads/report/IPCC_AR6_WGI_SPM_final.pdf