Turbulence describes the business environment over the last 25 years, and there is no sign of it letting up. This means that leaders for the foreseeable future will be surrounded by our old friend VUCA – volatility, uncertainty, complexity, and ambiguity. Turning this into an opportunity to adapt requires that we ask the right questions.
The Wright Brothers were not the only ones pursuing flight, yet they are considered the first ones to achieve it. What did they do differently? More specifically, how did they approach the VUCA of imagining, building, and testing a flying machine before one existed? Isn’t this what Apple does so well?
While other designers of aircraft sought stable flight (think American Auto Industry), the Wright Brothers were the only ones interested in unstable flight. They asked the question: How can a “dipped wing” (one wing dropping lower than the other) be manually controlled while air borne? This led them to the finding that twisting or warping a wing would increase its lift. By designing instability into the system, the system (an aircraft in flight) became resilient to the constantly changing flight environment and responsive to manual control. Paradoxically, flexibility produced dynamic stability. All you frequent fliers still see this today, the wings of aircraft flex and undulate during flight. Simply put, the turbulence of the environment (air flow) is absorbed by the dynamic stability (designed instability) of the system (plane). Or, the plane adapts to the conditions of the environment as they rapidly change.
It may seem that I am beating the drum on this but what is the number one thing that executives ask the organization to do every year? Predict what will happen and then write an operating plan against these predictions. Under these conditions, is it any wonder that when VUCA winds blow and organizations are “forced to change” their efforts are bound to fail 70% of the time? Adaptive Change is about designing and leading organizations that are built for unstable flight!
So let’s start…get a pencil and paper and answer these questions by doodling, mind mapping, or drawing – whatever you do, get your right brain involved:
What environmental conditions are most likely to create turbulence in the next 12 months? Include political, social, environmental, economic, technological, customer variables (values, experience, lifestyle, desires), and last and most predictable the actions of your competitors.
What will increase the probability any of these will happen (amplify the conditions)? What will decrease the probability (dampen the conditions)?
What future am I trying to create within these conditions?
What 3-5 conditions of turbulence do I want to be ready to adapt to? These become the Destabilizing Events that you track closely over time and include in your operating plan.
What does unstable flight look like in these conditions? This becomes the framework of your operating plan.
What must I do as a leader to alert everyone to these variables so that they are watching for weak signals of their presence and telling me when they suspect them?
When I facilitated the PDCP Change Process (Blog March 2, Leading Adaptive Change) I was neither leading nor managing the actual work – the joy and frustration of being a facilitator. Observing leaders and managers who were at the working surface (the point where things actually happen) I realized the following:
During times of Adaptive Change every meeting, conversation, report, and process is an opportunity to move the organization toward their vision of the future. Rolling out the PDCP gave the whole organization a chance to look at everything we did with fresh eyes. This generated numerous spin-off change initiatives that contributed to our overall success. To ensure you get the most out of this opportunity change leadership must become distributed.
Before you get apoplexy, let’s explore this idea and see what it means for improving the success of change. By distributed change leadership I don’t mean that the org chart changes or that power and authority suddenly shift or are diluted. I do mean that many people in the organization understand and can perform the role of Adaptive Change Leader in the appropriate situation. I use the term role to mean a set of accountabilities that can be assumed by any individual given the proper knowledge and situation.
Take, for example, Woodside Manufacturing (fictitious name) a company bringing together three diverse teams into a new 150 person operating unit. The executive team kicked off an intentional change cycle to create an integrated culture. They shared the visioning process and everyone was on board, except nothing happened. On paper the boxes and lines made total sense, but after nearly a year things are slow to gel, performance is lagging, and the executive team feels like they are “herding cats.” Behaviors and habits are hard to change when culture (or in this case, three cultures) continues to support them.
To begin the executive team came together to understand what accountabilities they were assigning to this role. Then, they sought out change agents (identified by their actions rather than volunteerism) and worked with them to learn the role of Adaptive Change Leader so they could perform it during their daily work. For Woodside Manufacturing introducing the role of Adaptive Change Leader gave people a chance to get some skin in the game. It established people throughout the organization who fully understand what change the executive team was trying to achieve (Vision) and why it mattered (alignment to Purpose). This role differs from the role of Manager, who focuses on how the change will be accomplished and who will do what.
Key to the success of distributed leadership for Adaptive Change is the adoption of a new perspective. In this case that meant the individual change leaders held themselves accountable for keeping the cultural change moving forward through experimentation and integration of diverse ideas, processes, and ways of getting things done. During meetings, conversations, and activities Adaptive Change Leaders used inquiry to encourage their colleagues to experience the transactional, transitional, and transformational aspects of change. For example:
Are there others we could engage in this process who would benefit from what we’re doing?
Is there something we need to let go of to move this forward?
Is there another way to do this that aligns better with our vision?
Notice that they are not expected have the answers, in fact, this role was one of provocateur.
As formal leaders within the organization managed the “who and how” of culture change, the actions of these distributed leaders reduced the transactional costs and encouraged cross-pollination between the three groups. Their leadership was particularly important as teams and individuals went through the cauldron, pulled by the red line of emotional transition and unsure of the way forward. An example of this was the introduction of patient flow modeling during the PDCP. Four people actively assumed the role of Adaptive Change Leader for this process and it took every one of them to make it happen. This informal group evaluated available products, presented their findings to management, learned how to correctly use the product chosen, and began implementing its use across the Therapeutic Areas. Where did they come from? Finance, Market Research, Global Marketing, and Project Management – you couldn’t have picked these people, they were self-selected and in an environment of open experimentation changed the way we did business by assuming the role of Adaptive Change Leader.
Every year thousands of change initiatives are undertaken globally in the form of reorganization, structural and procedural change, new product and service launches, and the setting of strategy, goals, and objectives. Yet, according to Harvard Business Review, 70% of all change initiatives fail. The financial cost of failed change to organizations, the economy, and society is enormous. The human cost – measured by employee disengagement, lack of trust, apathy, turn-over, sick days, depression, and burnout – is even higher.
Why is change so hard to successfully implement? Change has a dynamic and logic all its own – the more you try to control it, mandate the timeline, or predict the outcomes the sooner you become part of the 70% failure rate. Success lies in implementing a new model of change rather than repeating the same model better and faster. What we need today is a change model that addresses all three critical aspects of organizational change: transactional, transitional, and transformational. Ideally, we want a model that embeds adaptive change into the culture, thereby, creating resilience and agility in a world that is volatile and unpredictable.
The most commonly implemented change models, for example that of John Kotter, focus on the transactional aspects of change – the things we do during the change initiative, new structures, processes, and functional outputs and results. Change initiatives that focus primarily on transactional aspects are not designed to incorporate latent or tacit organizational knowledge into the process of creating their future. Instead they rely on a “powerful guiding coalition” (Kotter) to set the vision and plan the journey, often operating in a top down fashion and having little or no knowledge of local (geographic, team, or individual) challenges.
Transactional change models work well in cases of complicated change, for example, model changeover on an assembly line, but do not support the emotional and psychological components of complex change, such as new product development. Complex change requires that all three aspects of change be addressed simultaneously – transactional, transitional, and transformational – in order to make the most of the interdependencies and connectivity within the organization.
The Adaptive Change model describes a cycle that occurs when organizations encounter or design intentional destabilizing events that have the potential to move the whole system to a higher level of performance. Discontinuities initiate the change cycle, challenging the Status Quo and requiring that leaders establish a new vision for the future. As discontinuities arise the organization experiences an Adaptive Strain, like the tension created by pulling apart a rubber band.
While the overarching vision is often Transactional (a project, new technology, or restructuring), each part of the organization needs to understand the local destabilizing events it creates that are unique to their situation. This requires every team, division, or function to create a vision of the future that addresses their unique transitional needs (Letting Go-Neutral Presence-Letting Come) and creates the potential for transformation (changes in behavior, ideology, or organizational identity) to occur. In this way the whole organization moves toward higher performance and lasting change that is both global and local, aligning all parts yet preserving their unique characteristics.
Adaptive Change Model
The model captures five key aspects of change:
1 – Transactional Aspects arise from destabilizing events that create organizational volatility and the need for vision. This is represented by the green line – solid during times of stability and broken when uncertainty or unpredictability are present.
2 – Transitional Aspects arise from the initiation of transactional change and the emotionally generated red line of change. It is essential to manage this aspect as it determines the shape of the dip (the cauldron) in the transactional journey. Management of the red line is a three stage process of Letting Go-Neutral Presence-Letting Come, which follows the arc of the cauldron.
3 – Transformational Aspects arise when complexity gives way to clarity and opportunity emerges. Transformation during change occurs at many different levels: from “Oh, I get it!” to Ah-ha moments, to revolutionary ideas. Some form of transformation occurs to cause the transactional line to begin the movement up and toward vision.
4 – At all stages the organization is learning and not following a straight line: what to conserve and what to let go – the Fall, imagining opportunity and innovating ideas – the Cauldron, and rapid prototyping and cross-pollination with others – the Road Back.
5 – The journey is defined by the people and the tasks that they have willingly taken on to achieve their vision. Leaders of change have a portfolio of Adaptive Change journeys to juggle, not a single initiative to lead.
DR. CAROL MASE challenges leaders and their organizations to think differently about the world and how they can achieve their fullest potential in it. Her unique background unites business and biology, psychology and physics, bringing them into creative tension and generating tools and applications for all levels of the organization – from the C-Suite to the manufacturing floor. Carol has worked as an entrepreneur and an executive in Fortune 500 companies, always introducing fresh ideas that produce innovation and change, locally and organization-wide. She holds a degree in Psychology/Education, a Masters in Human Ecology/Interpersonal Relations, and a Doctorate in Veterinary Medicine.
You know that when change is upon you, you will be letting go of ideas, behavior, perhaps functions, structures, roles, authority, and even titles. Poised on the brink of change we are overcome by loss and the uncertainty of what we might be asked to give up. At this moment leaders need to focus the organization on what must be conserved. Without getting trapped on our history: What preserves who we are and must come with us into the future?
Unit of Work
When we plan transactional change we assume the unit of work is the task, or the set of tasks, performed by individuals, teams, or functions. A focus that conserves tasks is past orientated and only able to incrementally improve the system and its performance. In this case there is little room for imagination which generates innovation and, potentially, transformation.
Shifting to a systems perspective, the unit of work becomes the relationship – interdependencies between the parts of the system, whether people, functions, processes, tasks, or groups. When relationships are managed during change, i.e. managing the red line, everything else becomes available for change and/or re-organization. For leaders this means trusting the organization (i.e. people you don’t know) to be imaginative, creative, and to conserve those relationships and parts that define the company and culture at its best. This puts leaders in a VUCA Prime position, where things are unknown (complex) and perhaps even a bit unknowable (chaotic). It also unleashes the greatest potential of the organization.
Unleashing Organizational Potential
Put yourself in this newly promoted team leader’s situation. The original team leader has just been fired. He was disliked, not trusted, and had created a culture of fear within the team. Across the organization he was seen as building a kingdom and protecting his turf, arrogant, and unwilling to collaborate or compromise. You have spent your time in this team as a director, focused on your work and busy creating diverse relationships across internal functions and with external partners – interdependencies that are foundational to the success of your projects.
Knock, knock…we want you to take over the team leadership role.
After much hand wringing you say yes. Your first move is to have a one day team meeting to address the HUGE change that everyone is expecting to take place with internal and external partners, and to manage the GIGANTIC red line that everyone is experiencing (including yourself). All 25 team members are ready for an emotional download so you set up a “burning box” to collect all their issues, fears, and frustrations. But do you start with that? This leader began the meeting with a conversation about what the team wanted to conserve: Who are we at our best? How do we move forward from that position?
When the “burning box” was finally opened and the questions pulled out and answered, one by one, the emotional energy in the room was intense, and the team was ready to confront what they now saw as the past and move toward what they had just identified as their future. Coming out of the meeting the new team leader confessed to being “a wreck” but also recognized that without having identified what was good in the system, in particular acknowledging how people had been helping each other, the “burning box” could have been far worse.
Appreciating the Past
When a whole organization sits on the brink of change, leaders can (dare I say should) look to Appreciative Inquiry to begin the journey. This process identifies strengths and positive aspects of the company and culture that need to be conserved to achieve their future Vision. The participatory nature of this process brings out unseen potential, unknown change agents, and generates alignment and cohesion as the red line pulls transactional plans into a VUCA cauldron.
“…adaptation is a process of conservation as well as loss. The question is not only, “Of all that we care about, what must be given up to survive and thrive going forward? but also, “Of all that we care about, what elements are essential and must be preserved into the future, or we will lose precious values, core competencies, and lose who we are?” As in nature, a successful adaptation enables an organization or community to take the best from its traditions, identity, and history into the future.”
Heifetz, Grashow, and Linsky, in Adaptive Leadership
We talk about change as a process, but it is also the emergence of a new system from within the existing system. This systemic evolution occurs when we are unable to incorporate environmental discontinuities into the current Status Quo. As organizational Adaptive Strain increases, a cycle of change is induced.
“How are we going to achieve our Operating Plan goals given these new budget cuts?” Sound familiar? Our typical response to challenges like this is to create a workaround – a short-term fix that solves the immediate problem but does not address the root cause. In other words, we must deliver more output with less people, money, and time. This is the new normal in business, education, healthcare, and energy. I believe that until we become masters at using Adaptive Change our workarounds will continue to apply Band-Aids to critically wounded institutions.
When the Onyx1 brand team identified the 2016 Status Quo they desired – their 5 year vision of the future – they were able to imagine2 what they would be doing then and how it would feel. From that future they then imagined their way back to the present – an exercise called Future Back3. Because the critical period for their brand spanned the next five years they walked back to the present in one year intervals, creating a set of milestones for each year. But remember the stream bed and VUCA – we are not trying to predict the future with this exercise. We are trying to Understand the Uncertainty so that we can find Clarity within the Complexity and use Agility when our options seem Ambiguous.
Once you have made your way back to the present you are ready to chart your course to the first milestone – in other words, induce change within the organization.
Change changes change!
Kotter and most other change authors focus on the transactional aspects of change – the things we do during the change process. For example, during the PDCP change process a key transactional element was to create and validate each target opportunity for a specific disease. This was a huge investment of time and effort by over 30 cross-functional teams. The organizational effect it had was to change the business focal point from this year’s operating plan to a horizon 20 years in the future. Given the length of time required to develop new drugs, 10 + years, this proved to be a significant competitive advantage. This shift also produced additional transactional initiatives that introduced new organization capacity, for example: patient flow modeling, a decision-analysis group, deeper integration of manufacturing into clinical development, and a VP of communications. A transactional focus is necessary for change to succeed, but it is not sufficient.
As transactional plans ripple across the organizational web they generate emotional and psychological reactions in the people and teams they affect. All too often these are fear, distrust, caution, resistance, denial, and defense of the Status Quo (the devil I know). The Adaptive Strain within the organization becomes Personal Strain in its employees. Psychologist Virginia Satir extensively studied groups of people moving through change and documented the roller-coaster ride of their emotional experience, capturing it as a jagged red line. Thus, the emotional reaction to transactional change (logical, planned, and predicted) is unsettling, uncomfortable, and scary.
The red line of change pulls the change process away from its sequential, step-by-step, idealized plan and into a cauldron of chaos and VUCA – a cauldron that also contains creativity, imagination, opportunity, innovation, and transformation. While this sounds like (and to control and command leaders feels like) a nightmare and the road to failure, it is actually the path that creates individual and organization acceptance of the reality they face, with all its discontinuities, and the inspiration to achieve the full potential that the future holds. Kevin Kelly’s phase, change changes change, is the mantra of Adaptive Change.
In Summary
Adaptive Strain is induced by internal and external discontinuities
A future Vision generates a response to these that is actionable
In this way, Volatility and Vision initiate an Adaptive Change cycle
As transactional plans for change are made, Personal Strain is experienced by people within the organization
Personal Strain induces a red line of change, emotional responses to transactional initiatives
The red-line impacts the linear change process, making it unpredictable
This produces benefits and opportunities that can be transformational for organizations when their leaders master the Adaptive Change process
1 – A fictitious company
2 – The process of imagination uses the right brain cognitive processes (holism, emotion, and meaning) to picture a situation. NeuroIntegration® (abstraction, quantification, both/and dualism) links these to the left brain cognitive operators (reductionism, cause and effect, and either/or dualism) to make the imagined situation achievable.
3 – This exercise can also be used to understand the customer’s point of view, Customer-back, imagine their future needs, desires, or relationship to your company.
The events of last week remind us that VUCA (volatility, uncertainty, complexity, ambiguity) lives just under our radar screen and can catapult us from the status quo into radical change instantly. Like the 2008 economic crisis, events of this magnitude create unavoidable systemic strain that threaten to tear organizations, even countries, apart. As leaders, we need to embrace a mechanism of change that is adaptive, able to respond to internal and external challenges as they emerge rather than as we predict they will happen. Furthermore, we need to embed this adaptive change process into our organizational culture and planning. In this way businesses can absorb changes in the external environment, resilience, and use their internal responses and actions to influence it, co-creation.
Three years ago Onyx Manufacturing1 was first to market with an innovative product and they quickly established themselves as the market leader. Now five new entrants are expected in the next few years and their budget is shrinking as money is shifted to new products in development. They are being squeezed externally by new competitors and internally by changing priorities. These create Adaptive Strain that pulls them away from their current situation (status quo) and into an unknown future. The game is not over for them, but it will be soon if they can’t adapt their thinking and business mindset to this new “reality”. And, while business literature talks about the benefits of operating “at the edge of chaos”, right now it is stability that feels good, not change. When I met with the team leader morale was low, key people were being transferred to the “exciting new products”, budgets were being cut, and the leadership team struggled to express their “reason for being”. Something had to change.
Creating Persistent Patterns
But, what is stability? How does the status quo arise within dynamic systems? In business we like to think of the status quo as a thermostat – a means of controlling a system to maintain its stability. Yet in the dynamic VUCA-web of business, control is a misnomer and even the status quo is unstable.
What we learn from the new sciences is that the status quo is actually the interplay of order and disorder. Our current situation is a snap shot of a dynamic pattern created by energy (resources, people, and ideas) flowing through a system (a set of functions that create products and services), influenced by the structure of the system (organizational design).Think of a stream, the water is the energy and the stream bed structure, its function is to allow movement or flow. The status quo is the whole dynamic system at any point in time. Imagine, for example, the water level (energy) exposes a large rock (structure) which creates a whirlpool, a “stable” pattern; which in this case we can call the Onyx brand team and its product. We mistakenly believe that this stable pattern exists outside of the system rather than being a product of the system. When we base our thinking and leadership actions on this belief we lose resilience and the ability to evolve and co-create our future.
What the Onyx team is experiencing now is a change in the dynamic system and the creation of a new status quo. Their resources are drying up causing the “stable” whirlpool pattern to become unstable with the real possibility that it could disappear. In addition, this exposes new rocks in the terrain, new competitors that threaten to create stable patterns of their own. The status quo of the system is changing and unless the brand team actively participates in this change (through resilience and co-creation) they run the risk of disappearing from the system altogether. To address the systemic transactional change, the brand team needs to create a Vision of a new status quo that is significantly different from the one they live in today. This Vision of the Future must address the Adaptive Strain within the system in order to adapt to aspects of it they can’t control. In this way they can evolve their distinctive, coherent pattern and conserve a place for themselves within the future status quo.
Leadership Inquiry for the Status Quo
What dynamic patterns do you believe are permanent but in reality aren’t?
What meaning do you derive from these patters?
How does this limit your ability to adapt to both opportunities and threats?
Considering your “whirlpool”: Is there too much stability (control) or instability (change) for long-term sustainability?
Are your team’s Purpose and Vision able to maintain our pattern when VUCA enters the system?
Equilibrium is death. As a biologist, I believe this fundamental truth of life also applies to business. When a living breathing business flat-lines, the end is near. It is the dynamic flow of resources, goods, services, money, information, and workers that keep businesses alive and healthy. The global financial collapse of 2008 came close to an economic flat-line for many businesses worldwide. What does this have to do with leadership? Leaders are accountable for maintaining the change dynamic.
The Dilemma of Change
A dilemma is fundamentally different from a problem as there is no solution to the situation, only an iterative dynamic to follow. Change is a dilemma which is why the PDCP change initiative didn’t follow Kotter’s process. To understand the dynamics of the change dilemma as it exists in your life, team, or company you can map the dynamic using a process similar to the one Barry Johnson developed for mapping polarities1.
A few years ago I worked with a pharmaceutical team that was struggling to move out of the status quo and enter a cycle of change. After interviewing all the team members to understand their perception of the situation, I constructed the following dilemma map. The map clearly defined the trap they were in and what needed to be done to get change started in a positive way (which is where we start next week’s post).
To create your own dynamic map of a dilemma or change, start by identifying the two fundamental components of your situation. In this case we are working with change and the status quo. Begin at the lower left quadrant, the negative aspects of change, and list all the factors that make change uncomfortable, unwelcome, and sometimes painful. Be very specific. If you, or others, resist change capture why – find the deeper, emotional drivers of the quadrant (this holds true for all four quadrants).
Really feel the downside of change, because this is what makes you desire the status quo. From the downside of change we naturally desire and move toward the upside of the status quo. Fill that quadrant in, listing all the reasons why it is mentally, emotionally, physically, and practically the best place to be. These are the reasons your change effort will fail – this quadrant is what entices you to abort your change initiative.
The status quo does have a downside. Hidden within all that is desirable about where you are exist aspects that make it unsustainable, these are the negative side of the status quo. What aspects of your situation are destabilizing the system because they are too rigid, stifling, or out of step with the current reality? What is keeping you and your organization from innovating, growing, creating a better future for yourselves? How do you feel when the status quo loses its positive qualities and becomes a straightjacket? These are the reasons you move toward change, to make your situation better – emotionally and physically. Capture the positive aspects that change can bring to your situation.
The final step2 is to name the scenario that living in the positive creates, naming our greatest hope, and the scenario that living in the negative creates, naming our greatest fear. Each dilemma has a dynamic composed of two creative tensions – one horizontal and one vertical – that create movement within the system.
A Leader’s Lessons from the Dilemma Map
Leaders that understand the dynamic can use the creative tension within the system to manage the dilemma. For the pharmaceutical team leader four steps helped move the team forward:
A team off-site that generated a collective vision, revitalized their purpose, and begin to craft a new team identity
Reduction in overwhelm – this leader used the “stop-start-continue3” exercise
Keeping focus on the positive change quadrant, in this case refining the business model to increase the asset value of the brand
Openly acknowledging that the dynamic is filled with emotional tension that is different for everyone
Balancing VUCA with VUCA Prime would also have helped, more on this in a later post, and the exercise from the last blog can be used as is or modified to meet the needs of the change situation.
1- Change is a polarity, however many dilemmas are not true polarities. Nevertheless, I find the process works well.
2- Here is where my process differs from Johnson’s, he does this first and I do it last as way of gaining insight from the completed four quadrants.
In 1997, Dr. Mase designed and led a corporate-wide restructuring of the product development and commercialization process for Bristol-Myers Squibb, reporting to the heads of Pharmaceutical Marketing and Pharmaceutical R&D. This 18-month change process brought together cross-functional teams (including R&D, Global Marketing, manufacturing, and operations) to generate 20 year future scenarios and: create target product profiles based on those scenarios, value each profile, and validate them with global opinion leaders. As part of this work, she also initiated the use of Early Commercial Valuation (risk adjusted), patient flow modeling, and strategic decision analysis during early commercial development. Over the 18 month initiative, both organizational functions and structures were reconfigured.
I became fascinated by change in 1997 when I led an organization-wide change initiative to purposefully redesign our Product Development and Commercialization Process (PDCP). After 18-months of organizationally created VUCA we declared victory – a success that only 30% of change initiatives achieve.
Let me put this in perspective. If only 30% of your product launches succeeded, would you keep doing more of the same thing?
Every year thousands of change initiatives are undertaken by businesses globally – reorganization of people and lines of authority, Mergers & Acquisitions, structural change, OD/OE, product launches, innovation, novel services, technology advancements and invention, strategy, goals and objectives, personal development plans, and leadership training. If nothing else business is change. Yet, according to HBR, 70% of all change initiatives fail. It is also documented that 70% of IT and technology implementations, such as an ERP roll-out, fail.
The financial cost of failed change to organizations, the economy, and society is enormous. The human cost – currently measured in employee disengagement, lack of trust, apathy, turn-over, sick days, depression, and burnout – is even higher. Since 2000 I have explored why so many intentional change initiatives fail and experimented with ways to reduce this.
20th Century Change Leadership
John Kotter is a well-known expert on organizational change. Let’s begin by looking at his model and compare it to what actually happened during the successful PDCP initiative.
Burning platforms require fire-fighting, which is a good reaction to a bad situation, not change. Firefighters have a set of skills they learn and perfect. They don’t invent new ones for each fire; they rely on assessing the situation and applying a solution that has worked in the past. Using the same paradigm for change does not work for a connected, interdependent global economy in a VUCA world. Urgency has become management’s soup de jour.
For the foreseeable future[iii], the business challenges that leaders face are not going to be familiar, but rather, totally new and unpredictable, regardless of the level at which they lead. We no longer have a readymade toolkit for change; we are in totally new territory. From now on, if it is urgent we have missed the opportune time to change and a true crisis, probably of global proportions, is upon us.
Adaptive Change and the Squiggle Effect
“Never doubt that a small group of thoughtful, committed, citizens can change the world. Indeed, it is the only thing that ever has.”
— Margaret Mead
When people are pursuing their Vision and are invited to participate in designing the change process they are insatiable, untiring, and unstoppable. This is what happened in the PDCP initiative. To explain this let me introduce the squiggle effect of Adaptive Change.
Of the many smart people that I bounce ideas around with is Bruce Flye. He is particularly wonderful because he graphically captures what I am trying to explain or think about. Following one of my long-winded rants on change, he sent the following graphic titled “squiggle” with the note: “Kinda like that?” Bingo!!
The rhythm of Adaptive Change is like breathing – expansion and contraction, divergence and convergence – a simple pattern that never covers the same ground twice, a virtuous cycle of change. During the PDCP our first divergence was to imagine the 2020 future and how our products would perform in it. When the whole organization did this we had a Vision of 2020 with externally validated Target Opportunity Profiles.
The second breath occurred when the Adaptive Change rippled out and the organization voluntarily asked: Are the internal functions and structures in place to create this future? When the answer was no, the second convergence occurred – an organizationally generated transformation of product development functions (decision-making and resource allocation) and structures (product development teams and internal documentation).
This naturally created a new disturbance that generated new skills (patient flow diagramming), processes (decision-analysis), and accountabilities (notably in the areas of business intelligence and development). At the end of the 18-month period an innovative product development and commercialization process, that no one could have predicted, designed beforehand, or implemented (Kotter’s process), was in place and functioning.
The Adaptive Change that occurred was latent within the organization, waiting to emerge.
As a leader, learning to successfully lead Adaptive Change in our VUCA world is essential… period. Change is a dilemma, a dynamic that must be managed. It has a logic and process all its own. The more you try to control it, mandate the timeline, or predict the outcome the sooner you become part of the 70% failure rate. The solution lies in a new paradigm of change rather than doing more of the wrong paradigm better and better.
Can VUCA ∞ VUCA Prime structure change in a way that shifts our current paradigm and makes our attempts to adapt to the world more proactive and successful? This is where we start next time.
In 1997, Dr. Mase designed and led a corporate-wide restructuring of the product development and commercialization process for Bristol-Myers Squibb, reporting to the heads of Pharmaceutical Marketing and Pharmaceutical R&D. This 18-month change process brought together cross-functional teams (including R&D, Global Marketing, manufacturing, and operations) to generate 20 year future scenarios and: create target product profiles based on those scenarios, value each profile, and validate them with global opinion leaders. As part of this work, she also initiated the use of Early Commercial Valuation (risk adjusted), patient flow modeling, and strategic decision analysis during early commercial development. Over the 18 month initiative, both organizational functions and structures were reconfigured.
[i] Both later confessed they never thought it would go anywhere AND they were thrilled with the outcome.
[ii] Organizations are not composed of one pervasive culture, but rather a mosaic of cultures that are localized to structures (teams, plants, or business units) and functions (marketing, manufacturing, or sales)
[iii] For further reading see: Global Business Network; The Institute for the Future; Mary O’Hara-Devereaux, Navigating the Badlands, Jossey-Bass, 2004; Eamonn Kelly, Powerful Times, Wharton School Publishing, 2006.
To apply the learning of VUCA ∞ VUCA Prime I draw a visual metaphor of my situation. I have limited drawing skills so I need something that is simple and provides just enough structure to guide my thinking. I start by establishing context, in this case the design for a cultural change program to create an intentional corporate culture. The context also establishes the time frame; my horizon is 18 months out.
Setting the context helps you “see” the system as well as the other systems that are linked to it. My system is a group of 150 people from within the organization coming together under a new charter, the integration of three sub-cultures.
Next, look to the horizon. The horizon of the future is not your Vision, but rather a set of 3-4 plausible scenarios, each of which contains some version of your Vision. Like any set of scenarios my project is impacted by the whole environment in which the corporation operates. This step broadens my thinking, challenges my mindset, and surfaces unquestioned assumptions. My client is a nationwide corporation providing services to large mixed urban communities and businesses. My horizon includes: city center rejuvenation (or lack of), a range of joblessness (from little to significant), and varying adoption levels of new energy technologies (wind, solar, geothermal).
This isn’t a formal scenario building exercise but more of a stage setting process, so we can understand what we are sailing into. In this example my horizon can be captured using a simple 2×2 matrix: continued urban decay to modest revitalization on one axis and high to low adoption of new energy technology on the other. This produces four future scenarios and the intentional culture must be fully operational in each. Over the next 18 months I will track which future is beginning to emerge and tailor my program appropriately.
Now we need to consider the shore that we launch from. In this project three separate and distinct cultural units are being integrated. The conditions across the corporation are those of radical change – nationwide energy company, traditional corporate structure, and creative tension between old and new technology. We are launching from an immediate past and foreseeable future of unpredictable economic change and organizational turbulence; including the restructuring that brings these three groups together.
I plan to sail a general course to the horizon. Depending on the VUCA winds, I will course correct as needed – tacking toward the VUCA Prime element that balances each challenge as it arises. To pressure test my program design, I divided the project into three phases: initiation, half-way point, and realized culture. Using these I completed the following chart to help me think my way through the VUCA Quadrangle, which is one degree more dangerous than the Bermuda Triangle.
I show one item in each column, there were actually many, and bold what I think are the most significant columns for each phase. Using my completed table I went back and added an assessment phase at the beginning to create more Understanding and a full day workshop at the half-way point to improve Clarity.
While VUCA and VUCA Prime are concepts, they are also a mindset – a different way to perceive and react to situations. This is the benefit that military and corporate leaders are realizing from this approach. When you see the world as composed of four elements rather than one, turbulence, you have four actions you can take. Applying VUCA and VUCA Prime is not rocket science and it is useful as a way to think about the things you do every day as contributors and leaders. Start by observing the four elements when VUCA shows up. Which one predominates? Then tack in the direction of that VUCA Prime action and see what happens.
Carol challenges leaders and their organizations to think differently about the world and how they can achieve their fullest potential in it. Her unique background unites business and biology, psychology and physics, bringing them into creative tension and generating tools and applications for all levels of the organization – from the C-Suite to the manufacturing floor. Carol has worked as an entrepreneur and an executive in Fortune 500 companies, always introducing fresh ideas that produce innovation and change, locally and organization-wide. She holds a degree in Psychology/Education, a Masters in Human Ecology/Interpersonal Relations, and a Doctorate in Veterinary Medicine.
In 1999 I facilitated scenario building for eleven cross-functional pharmaceutical teams (R&D, clinical development, global marketing, regional operations, manufacturing, and regulatory). The future was 2020 and we were imagining the marketplace, what consumers would expect, how diseases would be treated, and the features and benefits of the gold standard therapies of the day. Imagining the future for most people is difficult, it is just too Ambiguous, and each team struggled to conceptually get out of their own way.
Ambiguity is a powerful learning environment. As the teams’ worked to create their shared interpretation of a nebulous future, they were forced to construct meaning that was relevant to all the functions within the room. In doing this, transformation occurred and they no longer saw themselves as isolated functions, the future as unknowable, or their actions reduced to a single path upon which they stumbled blindly forward. Contained within their diverse perspectives, wide range of expertise, and varied contributions to the product development and commercialization process, Agility waited.
Ambiguity ∞ Agility
Ambiguity allows us to interpret the VUCA mess, finding meaning and just enough structure in our immediate situation so that we can act. Agility centers us and reminds us that reality is socially constructed, ours to interpret and create. In the VUCA world, the Ambiguity ∞Agility dynamic is central to strategy and planning. If we don’t like our options, we need more diversity to generate Ambiguity. Reducing Ambiguity focuses meaning so that we act with intention. Agility ensures resilient, adaptable action by constantly adding just enough Ambiguity to the mix. And so the cycle goes, a dynamic that companies like Ideo and Jump have perfected.
The Ambiguity ∞Agility dynamic also impacts consumer goods. For those of you my age, remember the “van” of the 60s? That was a product category that had so little Ambiguity that a van was only meaningful if you were a hippie, rock band, or had a trade business. The concept of “minivan”, however, had enough Ambiguity to be meaningful to lots of people. The auto industry Agilely exploited that meaning, flooding the car market with products. This was repeated when trucks, a vehicle with low Ambiguity, was integrated with car, a high Ambiguity product, and the SUV emerged. Other industries also use the Ambiguity ∞Agility dynamic; walk down the cereal aisle in any grocery store for a glimpse of all the “meaningful” alternatives to oatmeal and Cheerios. In fact, market research uses this dynamic to create a bit of VUCA in the daily lives of consumers.
Memories of the Future: Introducing Ambiguity into Business
Back to the business of scenario building, when someone in the group says, “We can’t possibly know the future,” remind them of NASA’s commitment to put a man on the moon in ten years when they didn’t have fuel for a rocket, a spacecraft, computers small enough or powerful enough to perform the mission, or space suits that would protect the non-existent astronauts (just to name a few obvious things they didn’t have). Or watch Apollo 13, and notice how Ambiguity allowed for new meaning to emerge from a pile of junk and saved the lives of three people on their journey home. What “pile of junk” ideas are starring you in the face that can be re-meaninged and turned into gold? What Ambiguity ∞Agility alchemy are you missing right now?
We are often trapped by our past experiences and continuously relive our Scenarios of the Past. For this reason, it helps to think about creating Memories of the Future, a term taken from neurobiology. Our brains capture thoughts and imaginings as memories, even before they occur. Using scenarios to create Memories of the Future introduces Ambiguity into our interpretation of events as we perceive them. When you have imagined four different futures and are presented with a situation today, your ability to be Agile in the face of controversy is dramatically increased.
Lessons for Leaders
When you encounter Ambiguity, whether it is a product category or another’s opinion, look for diversity of meaning. When multiple interpretations of the situation are held in creative tension, Agility naturally emerges.
Don’t rush to structure reality before you have fully explored the terrain. The Ambiguity ∞Agility dynamic is foundational to innovation, creativity, and design.
Scenario building, simulations, and imagining the future are not frivolous business games; they are powerful means of engaging the collective mind and using whole brain logic. Ignore these at your peril in the VUCA world.
Carol challenges leaders and their organizations to think differently about the world and how they can achieve their fullest potential in it. Her unique background unites business and biology, psychology and physics, bringing them into creative tension and generating tools and applications for all levels of the organization – from the C-Suite to the manufacturing floor. Carol has worked as an entrepreneur and an executive in Fortune 500 companies, always introducing fresh ideas that produce innovation and change, locally and organization-wide. She holds a degree in Psychology/Education, a Masters in Human Ecology/Interpersonal Relations, and a Doctorate in Veterinary Medicine.
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