Has Navigating Change Become More Difficult?

Mitchell Kusy co-authored a book with Mike Valentine and Gilles Benoit entitled The Playbook for Leading Change: Proven Strategies for Success, which was published this December. This book explains how leaders continually receive multiple messages on how to lead successful organizational change. The confusion created by these multiple messages has contributed to a high failure rate in change initiatives, as organizations struggle with watered-down approaches that offer generic solutions instead of tailored, practical guidance. This book functions as a compendium of simple, easy-to-implement change strategies that work.

When I spoke with Mitch earlier this month, I asked him, "Why has navigating change become more difficult? What are the major challenges?" Here is his complete answer:

Ever tried spreading peanut butter on toast? You know how it goes. Every inch gets the same layer, whether it needs it or not. That’s the way some organizations approach change: a one-size-fits-all method that doesn’t consider the unique textures of the situation. But change isn’t toast, and a blanket approach rarely works.  We created this book with three goals in mind: 

• Beat the odds for change success. Too many change efforts fail. We help you succeed. Even in unfamiliar change territory, we help you understand what's needed, why, and how.
•  Cut through the “noise” of change with confidence. Change can be messy. Let’s bring some clarity to the chaos and give you the confidence to tackle it.
• Keep it practical with strong evidence. No heavy theories—just real, research-backed strategies that we distill into everyday practices you can actually use. 

One of the many experiences we have had helping organizations and teams lead change is that leaders sometimes bypass three important dimensions of change: 

• Self as the Instrument for Change. How can each person’s commitment fuel success? 
• Team as the Instrument for Change. What’s the team’s role in making the change happen? 
• Organization as the Instrument for Change. How well is the change aligned with the system that needs to carry it? 

Some researchers have demonstrated a 60% to 70% failure rate; others have 50% to 75%. “Why does change fail so often?” Sometimes, leaders don’t realize how complex change really is. Other times, they may fail to link their big vision to real execution. Maybe they forget to involve the people who need to bring the change to life. In some cases, they include people too late. And often, they miss the chance to connect change efforts with larger business goals. Sometimes leaders focus so heavily on the change itself that they neglect the transition people must go through to make it work. These are just some of the many issues that fueled our book. 

In the Playbook, we share how to address the four major change challenges leaders face:

• Organizational and team transitions/restructures. 
• Strategic alignment.  
• Team development and the capacity for change. 
• Work culture change, especially toxic work cultures. 

What has been your experience with change management and team building? Do you agree with Mitchell's points? What were some of the mistakes you saw with the initiative within your organization? 

The Six Fears that Impede Corporate Innovation

New business innovation isn’t working in most large corporations. This is true even though we have made great progress over the past two decades in understanding the mechanics and dynamics of radical innovation. We have got the methodologies for creating the businesses right, but our organizations still seem to snatch defeat from the jaws of victory.

Why is this? New business creation is thriving in the startup sector, often disrupting incumbents, so the problem is not a lack of opportunity. What is going on? 

I recently spoke with James Euchner, whose recently published book -- Lean Startup in Large Organizations: Overcoming Resistance to Innovation -- addresses such questions. During our conversation, I asked him about the sources of resistance and their connection to Lean Startup. Here is his complete answer:

Any new venture confronts uncertainty: uncertainty in customer demand, uncertainty in the timing of the market, uncertainty about new channels or new business models or emerging technologies. Corporations have gotten better and better at managing these types of risk. The Lean Startup movement has done much to help with this.

It is ironic, but the very methods that have led to success in creating product/market fit have interfered with venture/corporate fit. There are, in fact, six fears that Lean Startup awakens inside the corporation that impede innovation.

The first is the fear of chaos: the concern that the iterative and experimental approaches of the Lean Startup will lead to an unmanaged innovation process. An Innovation Stage-Gate helps to contain the chaos. 

The second is the fear that the innovation process will lead to disruption of ongoing operations. Every corporation has established norms that define “how we do things around here.” New business innovation naturally challenges some of these norms. This disruption needs to be acknowledged and explicitly managed for a new venture to succeed.

The third fear is the fear that the lean innovation process will lead the company into opportunities that the company just can’t exploit. Worse, the new directions may even undermine the identity of the firm. A company needs to innovate within clearly defined opportunity spaces to counter this fear.

The fourth fear is that the new business will succeed by cannibalizing the core: the new business will appear to drive revenue and profit, but only at the expense of the financials of the ongoing business. To counter this fear, companies need to explicitly model not only the economics of the business but the impact of the new company on the core business. Sometimes, cannibalization is necessary to the ultimate growth of the firm.

I believe that the fifth fear is the cause of the failure of more new ventures in corporate settings than any other. This is the fear that the investment in the new business will drain resources from the core. It causes the core business to react in ways that smother the new business. Countering this fear often requires separating the new company from the mother ship, at least during incubation. 

Finally, executives often fear making a career-limiting blunder when investing in a new venture. After all, the new venture, by definition, moves into spaces that are less well-understood by executives in the company. To counter this fear, companies need to develop ambidextrous leaders – those who can both execute and innovate. A key requirement is for the executives to spend time in the new ecosystems. 

What has your experience been with new business innovation? What are your thoughts on Jim Euchner’s suggestions for inoculating companies against these corporate antibodies?