In today’s business landscape, with rapid advancements like AI, effective and efficient change management isn’t just about fine-tuning—it’s existential. Traditional approaches, with their cumbersome processes and slow timelines, are ill-suited for the urgent demands of a digital world. Adopting agile principles is crucial, especially when facing crises or navigating virtual landscapes. Drawing from agile software development and recent experiences in change management, here’s how we can revamp our strategies for swifter, more effective change.
Starting with Frederick Taylor and W. Edwards Deming, managers have long been obsessed with ways to improve business processes. And in the past 20 years a host of improvement initiatives, including lean production, Six Sigma, and agile, have swept through a range of industries. Studies show that companies embracing such techniques may enjoy significant improvements in efficiency and costs. But when the University of North Carolina’s Brad Staats and the University of Oxford’s Matthias Holweg and David Upton looked at the benefits, they noticed a gap. “These things always work well initially, but often the gains fade very quickly,” Holweg says. “It’s always felt like researchers were telling only half the story. It’s not just about putting the programs in place—it’s also about making them stick.”
As your organization faces the twin challenges of strained budgets and burned-out workforces, what can you do to keep your employees engaged? While it may not be as impactful as a promotion or a raise, don’t underestimate the power of symbolic awards, such as private thank-you notes or public displays of recognition. These simple interventions can significantly improve employee motivation, according to research.
When they set out to turn around processes that have become woefully inefficient or ineffective, most companies choose one of four process improvement “religions”: Lean, Six Sigma, Business Reengineering or Business Process Management (BPM). After hearing about its success at another organization, many companies choose just one. For example, several companies embarked on Six Sigma programs after their CEO heard about GE’s success with the approach, and many other companies have adopted Lean because of Toyota’s success. It’s like adopting a diet or exercise program that a friend has used and lost 50 pounds.
But some companies realize they need to go beyond making episodic improvements. They try to institutionalize process improvement — that is, put in place the right mechanisms in their management systems so that their business processes don’t become grossly unproductive in the future. That is, they try to build continuous improvement into their DNA. It’s like the difference between going on crash diets every two years and fundamentally changing one’s eating and exercise habits.
The business world has arguably seen more disruption in the last nine months than in the last nine years, bringing new and urgent demand for change. Initiatives are being launched by the dozen, adoption can’t happen fast enough, and the stakes are higher than ever. In the midst of a Covid-induced recession, and with some industries on the brink of extinction, change isn’t about fine-tuning — it’s existential.
But traditional change management — often characterized by heavy process, lengthy timelines, and clunky rollouts — won’t cut it right now. As organizations fundamentally rethink their product and service portfolios, reinvent their supply chains, pursue large-scale organizational restructuring, determine on the fly how to operate in a virtual world and rebuild to correct systemic racism from the ground up, the type of change management required in this moment is quick, agile, and (in many cases) virtual.
It’s really hard to make massive gains in skill, performance, and talent, especially overnight. But it’s fairly easy to make small changes every day. So if you’re pursuing major improvements, leverage lots of small, easy wins instead.
As we move into the new decade, Forrester is identifying forces that will require organizations to rethink the one-size-fits-all model and move to an approach that shifts the balance to more local-specific services and delivery.
Agile methods can accelerate product development and process improvements. They can also help engage an organization’s most valuable employees, deepening their connections and experiences in ways that pay off for the company in the long run. But agile teams are not stand-alone entities; they’re embedded in broader collaborative networks. By taking that reality into account, leaders can design them so that they make the most of talent inside and outside teams, avoid overload and burnout, avert potential disruptions, and achieve their objectives better and faster.
What Is Strategy?
Today’s dynamic markets and technologies have called into question the sustainability of competitive advantage. Under pressure to improve productivity, quality, and speed, managers have embraced tools such as TQM, benchmarking, and re-engineering. Dramatic operational improvements have resulted, but rarely have these gains translated into sustainable profitability. Gradually, the tools have taken the place of strategy.
That shift led to the rise of mutually destructive competitive battles that damage the profitability of many companies. As managers push to improve on all fronts, they move further away from viable competitive positions. Operational effectiveness, although necessary to superior performance, is not sufficient, because its techniques are easy to imitate. In contrast, the essence of strategy is choosing a unique and valuable position rooted in systems of activities that are much more difficult to match.
It’s important to trace the economic basis of competitive advantage down to the level of the specific activities a company performs. In many cases, making trade-offs among activities is critical to the sustainability of a strategy. Whereas managers often focus on individual components of success such as core competencies or critical resources, managing fit across all of a company’s activities enhances both competitive advantage and sustainability.
SWOT analysis is a recognized tool to identify an organization, product, or service’s strengths, weaknesses, opportunities, and threats. Yet, despite the tool’s wide use, it’s often conducted ineffectively, making the analysis less than insightful with no clear path to action. Part of the problem lies in focusing on internal factors — strengths and weaknesses — first. But by turning it on its head, you can conduct a better analysis that can result in more actionable strategic recommendations. First, gather an inventory of relevant environmental conditions — the threats and opportunities. Next, explore internal strengths and weaknesses. Finally, generate recommendations using this simple sentence: “Given the condition of [external factor], our ability to [internal factor] leads to our recommendation that we [recommendation].” By looking at the external conditions first and internal internal attributes second, you will generate a better set of clear-cut and supported ideas for moving forward.