Change Strategy: Introduction (Science of Org Change)

A day late and a dollar short

As a consultant frequently called-in mid-project when change is going badly, I am asked to supply tactical means of resolving people and culture problems.  As with aid workers surveying a post-hurricane scene, I find political conflicts, unhappy stakeholders, culture clashes, dysfunctional project teams, skills issues, sponsorship troubles, delays and overruns all of which need to be urgently fixed.  I often wish I could hop into a time-machine, go back eighteen months to project conception and ask the hard strategy questions. Tactical solutions are limited in their ability to fix a flawed strategy.  The same is not true if the strategy is sound, change management tactics can resolve many of those thorny issues. Sun Tzu says it beautifully, “Victorious warriors win, then go to war, while defeated warriors go to war and attempt to win.”  Often by the time change experts are asked to help, the battle has already been joined, and the best they can offer is a rearguard action.

Yet despite the importance of putting strategy first, the preponderance, perhaps as much as 95 percent, of what is written about change, is written about change tactics. For example, Professor John Kotter, of Harvard, wrote the most influential book on change leadership, Leading Change in 1996.  Kotter’s famous eight steps are: Create Urgency, Form a Powerful Coalition, Create a Vision for Change, Communicate the Vision, Remove Obstacles, Create Short-term Wins, Build on the Change, and Anchor the Changes in Corporate Culture.  All mandatory steps, yet all but one are tactical, not strategic, despite the volume’s overall usefulness and practicality.

 

Change strategy versus change tactics

Strategy differentiates itself from tactics in ways fully explored later, but which include: length of time horizon, willingness to challenge assumptions and received wisdom, which risks are considered and how they are analyzed, kind of cognitive processes required, and in the accountability of the strategy process.

To elaborate what I mean when I distinguish change strategy from tactics, I offer the following table.

Change Strategy versus Change Tactics
Change Strategy versus Change tactics
Purpose Doing the right things, at the right time, in the right sequence Doing things right: time, cost, and quality
Worldview VUCA Stability, structure, planning
Accountability Business success Project success
Scope Extra-organizational focus, links dependencies between projects Intra-organizational focus
Time horizon The medium to long view Short term (under two years)
Assumptions/ mental models Challenge conventional wisdom, contrarian mentality, global context Accept conventional wisdom, “head down”, benchmark, local excellence
Virtues Balance risk-taking and prudence Balance pace and engagement
Kind of thinking Foresight, causal, creative, expansive, flexible, reflective, probabilistic Planning, empathy, deterministic, convergent, precise
Unique risks Unintended consequences, over- extension, overload Planning errors, missing details, stakeholder mismanagement
Major decisions Grand strategy (vide infra)

Meta-strategy(see Ch 3)

Prototype v big bang

Level of involvement

Serial v parallel

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Strategic coherence and grand strategies

In today’s multi-national, with multiple business units, divisions, regions, and functions, there will be multiple strategies, some centrally determined, but with local implementation autonomy, and some determined and implemented locally.

The most disastrous loss of value is when such strategies do not cohere.  In this author’s view:  Strategic coherence is more important than strategic perfection.

For example, Hewlett Packard (HP) is currently in a “fix and rebuild” strategy that involves centrally dictated cost-cutting targets.  Such targets are bluntly designed and communicated as “we need to cut 1000 of our 7000 staff within the next six months.”

However when HP’s COO visited a regional office, he enquired why labor costs had increased rather than decreased despite shedding 14% of the workforce.  The response was that contract workers were required to maintain levels of customer service to meet another strategic imperative – to become “the leading IT services company” – which includes “delivering the HP experience”.

Coherence can be achieved by “grand strategy” design, which in the world of politics, war, and foreign affairs means:

  1. Expanding strategy beyond just military means (diplomatic, financial, economic, and cultural).
  2. Considering internal strategic forces and alignment, the realpolitik of strategy feasibility.
  3. Including strategies for “winning the peace” once military conflict has ended.

Creating an organizational grand strategy is therefore a more holistic way of strategy formulation.  Typical, generic corporate grand strategies can include: market growth, product development, turnaround, liquidation, diversification, vertical integration, innovation, growth concentration, horizontal integration.  The acid test for any change project, and a critical way of timing, and sequencing, major change is alignment with the grand strategy (or excellent rationale for exception.)  The HP tactic (headcount reduction) must be assessed for its contribution to the grand strategy and local strategies to prevent waste and unintended consequences.

In the first chapter of this section, Cognitive Biases and Failed Strategies, we look at cognitive biases and the systematic change strategy mistakes that result from them.  We see how perceptual and reasoning flaws color which problems are selected, distort views of current reality, and skew solutions.

The next chapter, Governance and Strategy in a VUCA World, examines the governance implications of strategizing in a VUCA (Volatile, Uncertain, Complex, and Ambiguous) world.  This includes treatments of how poorly humans understand probability, biases which affect risk assessment and planning, solving problems in complex environments, and leading in the “fog of war” (ambiguity).

The concluding chapter in this section, The Leader as Scientist, looks at whether the scientific mindset, or scientific outlook might contribute to contemporary understanding of leadership including a hard look at an idea called Evidence Based Management.

 

[1] Taken broadly, change strategy could mean all executive level decisions affecting business direction.  Here we limit it to strategy only as it pertains to major, programmatic change for example: IT systems projects, process redesign, six-sigma, or restructuring.

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