The Change Agile Organisation EFMD Executive Education Network Meeting Peter Binns Madrid

1. The Change Agile Organisation • EFMD Executive Education • Network Meeting • Peter Binns • Madrid • 14-16 September 2000

2. The Change Agile Organisation • 1. Why is change agility important for organisations today? • 2. What is a change agile organisation, and how we would recognise it? • 3. Key indicators. • 4. Developing the change agile organisation: implications for organisation development and executive education.

3. A key problem: organisations can’t make change initiatives work • 70% of re-engineering efforts ultimately fail (Dr Michael Hammer) • 2/3 of companies that tried to implement total quality had not seen any significant change (Arthur D. Little) • Many large-scale change initiatives run into difficulty at implementation phase (KPMG Director of Change Management) • Results from large scale change programmes is “seriously underwhelming” (Dr Richard Pascale) • Only 20% of major European companies’ change programmes rated their recent change programmes as successful (A. T. Kearney)

4. Nine reasons why change initiatives fail • Using a predominantly hierarchical, top-down change architecture, but with the intention of creating flexible, non-hierarchical people and teams. • Or, vice-versa, delegating the key change tasks, but without giving appropriate responsibility or authority. • Buying someone else’s solution. • Ignoring the impact of culture. • Not taking account of the impact of the emotional cycles of transition. • Avoiding key issues for political reasons. • No feedback flow between policy and operations learning cycles. • Asking people to buy into the solution when they haven’t yet agreed to the problem. • Trying to undertake transformational change while still hanging on to the same transactional mindset that produced the problems in the first place.

5. Change Agility - some postulates • 1. Change agility is the capacity to effectively respond, anticipate and be generative in relation to a changing environment and to bring a degree of newness to familiar and habitual patterns. • 2. Change agility can be at the level of the individual, a group, a whole organisation or a community or a species. • 3. Change agility is not a static capacity and can increase or decrease over time. Change agility cannot be taught but can be increased through development activity for the individual, group, organisation or community. How to design those activities collaboratively is an important art and craft still in its infancy.

6. Change Agility - some postulates (cont) • 4. Developing change agility is to change what learning how to learn is to learning, i.e., changing how we change - this includes the transfer of learning from one change process to another. • 5. Change agility is not just to do with the speed of response to change in the environment, but also involves the purposiveness, flexibility, depth/breadth and perceptiveness of the response. • 6. Change agility is therefore not there simply for the sake of change, but is something that enables the organisation to better serve its wider community needs.

7. Clarifying some of these terms • Purposiveness includes the clarity and degree of ownership of the direction, the ability to track movement towards and away from this direction and the felt sense of meaning in the purpose. • Flexibility is the degree of adaptiveness. • Depth is linked to how much of it is involved and finding meaning and a voice in the change. • Perceptiveness is the ability to perceive and correctly evaluate the change needed.

8. A model for Change Agility(based on some notions from Piaget) Accommodation High Co-Evolve Multiple Development Paths Adapt Respond Consolidate Entrench Defend Incorporate Overcome Low High Assimilation

9. The model as applied to theEvolution of Species Accommodation High Cheetah Coelacanth Dinosaur Low High Assimilation

10. Key consequence of the model • Optimal “evolutionary change agility” does not take place when the species is excessively adapted to its environment, nor when it is excessively able to assimilate or dominate it. Rather, it happens when it is coupled to its environment in a way that most fully and most flexibly enables it to interact with it in multiple ways.

11. The same applies for organisations: Accommodation High Wimp Sluggard Macho Low High Assimilation

12. Organisations in Context • Conclusion: there is a need for a systemic approach in which the level of analysis is at a higher level globally than the organisation itself. Therefore: • Change agility is not a property of organisations as such, but of organisations within their broader ecological context.

13. Change Agility & Dimensions of Ecological Space • Key question is the ecological health of organisation in its systemic context. • As with the health of all ecosystems, this depends on the number, variety and quality of the interconnections that can be dynamically created between the set of accommodations and assimilations within the system.

14. Change Agility: key indicators and assumptions • Key indicator Change Agility assumption • How long does change take? Quicker change is better • How much does change cost/benefit: Effective change yields immediate financial • return • Mapping enablers and blockers Enhanced enablers and decreased blockers • mean increased change agility • The number of improvements that come Fast failure harvesting leads to increased • come from each trial failure change agility • Increase in the average contribution of • each initiative to improvement to strategy, • change architecture and culture • Environment changes seen as opportunity Increased repertoire of future scenarios • rather than threat increases change agility • Levels of development of the people People developed to a higher level lead to • (Torbert, etc) higher levels of organisational change agility • Speed of spread of innovation and Greater connectivity between individual and • Learning organisational learning increases change • agility

15. Recent Research (1): Atticus • 80% of organisations rated as “change able”, managed change on the basis of their own internal change capacity rather than relying on others to provide it for them • “Change inept” organisations, however, relied on others to a much higher degree

16. Recent Research (2): PwC and Bath Consultancy Group • A: Interviews with over 50 European Chairmen, CEOs and FDs • B: Ten presentations by CEO clients at “Consulting • with the Board” events • C: Bath Consultancy Group interviews with ten • Chairmen and Chief Executives • D: Harvard Business Review: Stanford Business • Review

17. The Chief Executive Agenda/Hot Topics • 1. Shareholder value • 2. Different stakeholder interests • 3. Growth • 4. E-Commerce • 5. Being a market leader • 6. Globalisation • 7. Succession • 8. How to transform the culture • 9. The triple bottom line and License to operate • 10. Handling the board

18. The Challenge • We spend $?? million globally on training and development • How can we halve the spend but get double the value added?

19. Exercise • A. Role plays a chief executive they know or know • about • B. Interviews them • - what are the top 3-5 issues on your agenda? • - what are you personally most concerned about? • - how could training and development make a • significant difference for you and the business • Reverse roles

20. Four Inquiry Groups • A. Key change agility issues facing our clients/customers • B. Key challenges for “change agility proofing” our programmes • C. Key issues to be faced in developing the change agility of faculty/staff • D. Key challenges facing the organisational transformation of European Executive Education Institutions

21. Key Components of the Shift • From To • Sequential Synchronous • At one remove At the coal-face • Linear, one-off Iterative; fast trials • Skill centred Business issue centred • Internal focus External/stakeholder focus • Didactic approach Collaborative inquiry

22. Key Trends in Organisational Change • From To • Problem Centred Vision Centred • Organisational Development Organisational Transformation • Functional Based Whole System Focused • Within Company Boundaries Across Organisational Boundaries • Product Driven Client Driven • Organisational Development Whole System Transformation

23. Implications for the Change Agile Executive Development Institute • Partner, not supplier, working jointly to: • Build the internal change capability of organisations • Co-design and refine the change architecture • Support the integration of line management with the development of specialised change teams • Help create key components of the change process • Deliver programmes to enhance change management skills and to support change – including coaching, mentoring and action learning