Enterprise of the Future: Hungry for Change
June 9, 2008 by Raj Sheelvant
According to IBM Global CEO Study titled “The Enterprise of the Future
While every CEO agrees that ‘Constant Willingness to Change’ needs to be a part of the company DNA to dominate in the future, larger percentage of those CEOs will not be able to implement change – according to the survey. The graph for this ‘change gap’ (ability to articulate change but inability to execute these changes) is as show below
From the graph it appears that more and more CEOs provide ‘lip service’ when it comes to ‘change management’. They lack vision, courage and focus to execute and implement those changes. So what’s causing this growing change gap? Companies are struggling with its accelerating pace of change according to survey. But in my opinion that’s only a part of the problem. Ability to execute ‘change management’ is a central characteristic of a leader and involves mainly changing the existing corporate culture. If ‘willingness to change’ is not baked in the organization’s culture, if the middle management is not rewarded for taking educated risk, if the entire organization is locked in ‘paralysis by analysis’, then even if the leaders can comprehend what change is they will not be able to implement change. It’s the corporate culture or the organization’s behavior that usually provide massive resistance to change. Louis V. Gerstner the ex CEO of IBM in his book ‘Who Says Elephants can’t Dance’ writes how he was able to successfully turnaround IBM in the early 1990s. He wanted to change several things at IBM and corporate culture was one of them. But he came to single most compelling conclusion during the process steering around IBM – “Culture is everything”. If you can successfully change the corporate culture every other change is easy. Therefore ‘Change management’ mainly involves changing corporate culture. This process is difficult and the results are painfully slow. The CEOs need persistence and tenacity to keep going in the face of resistance. That’s the only way to execute change. That’s what differentiates good leaders from mediocre leaders. So, even if large percentage of CEOs agrees that ‘change is important’ only few exceptional CEOs will be able to implement ‘change management’.
Clearly, the ability to change quickly and successfully is becoming more critical than ever. Here are a few thoughts about how the Enterprise of the Future approaches change from the survey.
Accepts change as a state of being: The Enterprise of the Future sees change within the organization as a permanent state. Because of the company’s culture, employees are comfortable with unpredictability. In an environment in which products, markets, operations and business models are always in flux, values and goals provide alignment and cohesion.
Change management cannot be informal, ad hoc or improvise: On the contrary the Enterprise of the Future defines and manages change as robust programs, structured around and driven to deliver defined business outcomes. Strong change management is a core competence at all levels and nurtured as a professional discipline, not an “art.”
Operates like a Venture Capitalist: The Enterprise of the Future establishes processes and structures that promote innovation and transformation. It actively manages a portfolio of investments, protecting and supporting the fledgling ideas, while systematically weeding out the weak ones.
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