The challenge of future-proofing your organisation
I have been working with some organisations lately who are struggling to get traction for their change initiatives. Not unusual, you may say, but these organisations all have something in common. They have no immediate ‘burning platform’ for their change.
It is often said that we live in an unstable, unpredictable world. Business as usual is now constant change, rather than change being an interruption to the steady state. The average lifespan of a S&P 500 company in America has reduced from around 60 years in the 1950s to under 20 years today. The pace of technological innovation alone is causing almost constant change in those industries most affected.
However, as with every trend, there are those who seem to be less impacted. My organisations are under no immediate threat, and share the following characteristics:
- Well-established, highly respected brands within their markets
- Values-led, as opposed to profit-led
- Financially secure with stable income streams
- Customers are happy with the service they receive
- Limited competition from other organisations
None of these organisations are becoming complacent, however. Each is running a number of significant change initiatives to ‘future-proof’ themselves in the event of their stability being disrupted. These changes are led by CEOs and executive boards. However, despite a compelling reason and support from the top, the changes are failing.
To understand why successful companies need to change we should look at the typical lifecycle of an organisation. Charles Handy can help us here with a useful diagram:
The solid curve shows the traditional lifecycle of a successful organisation – growth, maturity and decline. Maturity and decline occur because the external environment changes over time. For example:
- consumer and client expectations will alter
- competitors and new offerings will enter the market
- technology will develop
- economic and political environments will change
This diagram was as true in the 1950s as it is in 2018. However external factors change faster now, meaning the average lifespan of a company is much shorter.
Handy says you need to change your organisation, or future-proof it, when it is nearing the top of its growth phase. This is shown by the second, dotted curve in the diagram. Changing here means that you can try out new things and the impact of change can be absorbed by the current success. Then, when your organisation reaches maturity and begins to decline, the new ways of working are able to take over and the organisation continues on its upwards path.
How simple this sounds in theory! But as my organisations are finding out, how difficult it is to do in practice. The CEOs and executive boards are very sensibly following Handy’s advice and looking to future-proof before they begin to decline. But there is no ‘burning platform’ to change through when things get tough. And many of them are finding their proposed changes very tough indeed.
Future proofing is all about culture change
To future-proof successfully, we need to drill right down into the cultural heart of the organisation. Cultures develop in the growth phase of organisations, when many actions and decisions lead to success. These behaviours form the bedrock of the organisation’s culture – the basic underlying assumptions believed by the organisation and its members.
When we try to introduce change into organisations, we often challenge these underlying assumptions. For example, if growth happens because a successful offering was developed early in the organisation’s lifecycle, there may be an underlying assumption that stability is the key to success. If your change initiative aims to introduce higher levels of innovation and risk-taking into the organisation it will directly challenge this assumption.
Or perhaps an organisation has grown successfully by allowing teams and individuals high levels of autonomy in how they work. In this case, there will be an underlying assumption that success is driven by independence and self-government. Any change initiative that challenges this, for example implementing corporate-level technology or company-wide policies, will be in direct opposition to this assumption.
Don’t forget that this model also introduces change whilst the company’s success is still increasing and the underlying cultural assumptions are being strengthened daily. Culture change is difficult, time-consuming and highly stressful for those affected. This is why many organisations fail to future-proof when there is no immediate need to do things differently.
What do I do next?
If you find yourself working on a future-proofing initiative, here are some ideas of how to get traction for your change:
- Encourage your leaders to understand the cultural implications of the change and make sure they support the need for change
- Work with your key stakeholders to understand the current culture of the organisation, and the impact your changes will have on it
- Treat your change as a cultural change initiative, with enough time, resources and commitment dedicated to overcoming the difficulties of such changes
Success breeds success? Perhaps Handy is closer to the truth when he says “The world keeps changing. It is one of the paradoxes of success that the things and the ways which got you where you are, are seldom those that keep you there.”