4 Syndromes for Organisations Due to a Lack of the Right Energy
Peter De Prins and his colleagues distinguish four syndromes for organisations due to a lack of the right energy.
In the room where Peter De Prins gave a session to Dutch managers earlier that day, there is still something about the energy he transferred during his lecture. One would think that his own battery would be almost empty after such a day, but there is little to be seen of that. On the contrary, De Prins seems to be continuing his lecture, interspersed with one-liners, lots of humour, metaphors and examples derived from practice or from his personal life. They enliven his sketch of how CEOs 21st century challenges such as digitisation and disruptive innovation can be met with simple truths and timeless insights in successfully managing change. Because that is the leitmotiv in his philosophy: change. De Prins teaches about it as Professor of Management Practice in Change Management, Coaching and Leadership at Vlerick Business School, advises companies that are in a far-reaching process of change, acts as executive coach for leaders who are facing a personal transition or that of their organisation and writes about it. In mid-December, Six Batteries of Change was published, the book De Prins wrote together with Vlerick colleague prof Kurt Verweire, and prof Geert Letens.
Only one third of organisations are healthy
The book presents a simple model for organizational change: the solidified experience of five years of literature research, interviews with managers and personal involvement in change processes. The analysis of this led to the idea that successful change is all about managing energy. The model consists of six 'batteries' - a metaphor for energy sources - that need to be fully charged in order to achieve the desired change. There are three rational batteries (clear strategy, powerful management infrastructure and sound implementation) and three emotional batteries (ambitious top team, healthy culture and committed employees. De Prins and his colleagues then tested the model by asking managers in 112 companies about the strength (or weakness) of their batteries and the effectiveness of their change programmes. The companies with the best-charged batteries also proved to be the most successful in achieving change. Hardly any organisation was successful across the board: only 35% of the organisations were positively charged. For most companies, some of the batteries needed to be recharged. Overall, the batteries for management infrastructure and implementation show the lowest energy levels. De Prins and his colleagues distinguish four syndromes for organisations due to a lack of the right energy.
How important is the ability to change for organisations in the current management environment?
Crucial. Companies operate in a VUCA world: Volatile, Uncertain, Complex and Ambiguous. Until about ten years ago, it was mankind that initiated technological change and set its pace. The credit crisis and the rise of digitisation have led to a turnaround: now technology controls people. Developments such as artificial intelligence and robotisation, for example, are taking place increasingly autonomously, at a pace that humans can hardly keep up with. Disruptive change used to have a cycle of between thirty and fifty years. So people only experienced this once in their careers: think of the introduction of the computer or the mobile phone. Nowadays, the duration of this cycle is only one to six years and people are confronted with disruptive change four to five times in their careers. What's more, these are paradigm shifts that have a far-reaching impact on our way of thinking, communicating and behaving, in every aspect of our lives.
What do these rapid and disruptive changes mean for companies?
Disruptive change can be compared to an earthquake. A solidly built house simply stands upright, but if you look closer, you'll see cracks in the wall. The occurrence of cracks in organisations can be seen, for example, in the loss of a number of loyal customers, the less smooth running of processes or an increase in the number of people with a burnout. In the past, organisations had enough time to repair the damage caused by one earthquake and to strengthen their homes to cope with the next. Nowadays, this new earthquake often takes place while the support is still in full swing. Organisations today are therefore in a process of permanent preparedness and continuous change. You can't stop changing. This leads to organisational trauma, derived from the Greek word for injury. The employees of organizations feel hurt and get tired of change.
How do you diagnose it?
I make that 'feeling injured' clear in my sessions by asking a number of managers to hold a glass with their arms extended for ten minutes. In the meantime, I will continue with my story. After a few minutes you see these managers quit: they no longer listen to me, but shift the focus to themselves, because they are beginning to experience pain and need all their strength for persevering in their plight. Some people get angry and want to throw the glass at my head. Others rebel and put the glass down. Afterwards, they didn't remember a word of what I said in those ten minutes. That pain can also be seen in organisations: people get tired and angry about the constant change and close themselves off from the story of the top. They are only concerned with surviving with as little pain as possible. It's not the glass, the change itself, that's hard to find, but the fact that you're not allowed to bend your arm once in a while to put that glass down. We measure that change fatigue by doing a full audit of all the batteries. When all the batteries are empty, it's one to twelve.
How can leaders prevent or remedy this organisational trauma?
It's not just about managing change, but above all about managing stability: giving people the chance to relax their arms regularly. Giving people the feeling of 'business as usual'. You do this on a personal level, for example by making use of the 'progress effect'. Tell people not only what is changing but also what remains the same. On an organizational level, you can do this by not letting the innovation take place within your organization, but mainly outside it. We call this the tanker speedboat model. Your organisation is like a tanker. It is big, cumbersome and difficult to move. Speedboats are not. Put some employees on a speedboat and let them develop, think, create, innovate. By allowing this to take place in a separate organisational unit, the 'speedboat', you prevent the 'tanker', the entire organisation, from constantly having to adjust its course and becoming rudderless or breaking. Many managers already apply the tanker speedboat concept, but are not doing it well. Employees on the speedboat then get their speedboat job on top of their normal job. This does not work. Or that speedboat becomes a mini-version of the tanker and is imposed the same systems as the going concern. Wrong: a speedboat must be self-steering, without too much hierarchy or reporting. Employees are working on this full-time, for a certain period of time. And you give these talented people the freedom to come up with real innovation. A liaison officer helps to make the connection between the speedboat and the tanker.
How do you then bring the innovation from the speedboat to the tanker?
When people from the speedboat return to the organization, they can act as ambassadors for the innovation. You allow the change developed by the speedboat to take place in the tanker drop by drop. Think, for example, of apps to respond to the consequences of the digital transformation for the contact with customers. The employees from the tanker can continue to do their work, but they are also trained to integrate these apps into their daily activities. This drop-by-roll change may sting a little from time to time, but the feeling of 'business as usual' is still there. This process of gradual progress is better than sudden far-reaching change. Lethargic organisations sometimes suddenly realise that they are lagging far behind the competition and then go and pull on the grass to make it grow faster. But then they come up against the paradox: "fast change mostly goes very slowly".
What characterises successful leadership in change?
Being clear, generating energy and being able to combine emotion and reason. First of all, make clear choices. Clarity precedes mastery. Leaders in the business world must dare to be very clear. Don't think too long, choose and go for it 100%. Within the framework of strategy, stakeholders and legislation, of course. But thinking too much and too long about what the right thing is often stifles (too long) and makes you stand still. Analysis paralysis. Dare to prototyp: think, choose, do. If you don't succeed, learn from it and choose something else. Bring this clear choice into the limelight. Organisations think they communicate the message well by holding roadshows, intranets or brochures, but people filter this information and give it their own interpretation. Creating clarity is above all about ensuring that people have actually heard the message you want to convey as a leader and that they take it to the workplace. That chance is considerably greater if you take into account the context in which you tell that message. How, where and when you sell the change to the organisation, is a lot more important than what you say. We call this the context of the change. Lack of eye for that context is an important reason for the failure of change processes.
Next, be the energy you want to see. Sometimes leaders have the charisma of a carrot, so how do you want to inspire people to change? With a story about declining market share, you usually don't hit people. But when people themselves realize that their anchor values are under pressure (what they value most in their lives: their family, their integrity, their desires), they are willing to change. Finally: emotions choose short-term satisfaction. Ratio preaches a long term satisfaction. The emotion of short-term satisfaction is usually stronger when it comes to behaviour. If, as a leader, you call for a simplification of the organisation, but people behind their desk are confronted with the same Kafkaesque situation they have known for years, the emotion of the moment will negate the rationale of your story. Then you only create cynicism.
Can you give an example from practice?
After many acquisitions, an insurance company had become a complex organisation with as many as 150 different project systems. The CEO wanted to announce in a speech that the organisation would become simpler. I advised him to postpone the speech and to make an act first. During a tour of the company, we entered a room where administrative staff regularly copied 17-digit policy numbers from an old-fashioned software system by hand, because the organisation had not succeeded in linking the computer systems. That was the way to show that it was serious about simplifying. After a lot of puzzling, we integrated the old system into an existing software package on 1 weekend. When people came to the office on Monday, they talked about it all week long: "Finally someone had the balls to deal with this." On Friday of the same week, the CEO gave his speech about simplifying the processes for the top 600. The buy-in was big. First the context, then the message. Show people first what you mean by your change and then tell them the message. Creating the right context helps to address people emotionally and to create a fertile ground for the rational story. By doing so, you create the energy to realize real change.
To unlock that energy, do leaders have to charge all the batteries of the organization?
Yes, the six batteries are the necessary energy sources to create optimal change. Compare it to a toy car: if you take out one of the batteries, it doesn't work anymore. This is also the case with change processes. A company can have a great strategy, but if there is a toxic culture and the top team is constantly arguing, then success is out of the question. The other way around: if the culture is close and warm, but the organization lacks a clear strategy, things will not work out either. So each battery must be sufficiently full to be energetically ready for change. It is often said that seventy percent of all change processes fail. That has almost become a mantra. In our research we arrive at a lower failure rate: 30 to 58 percent depending on the success criteria (e.g. achieving and maintaining the desired result, the expected timing). Furthermore, 65 per cent of the organisations surveyed do not have all the batteries positively charged and 30 per cent are chronically ill'.
How can you, as a leader, change that?
You start with the battery that's the lowest. Make sure the batteries turn green one by one, so that people feel involved in the change again. An example is a company that was very successful financially with one product within one sector, but still scored very poorly on all six batteries. This was because the management had not thought at all about the future and the technological threats it posed. The result of our audit worked as a wake-up call. The company is now diversifying, innovating and looking for new markets.
Which company has six full batteries?
The Belgian Bank KBC. The bank's management has made clear strategic choices, created a speedboat for innovation, had the balls to release the money for this by divesting in Eastern Europe and creating the right change culture internally. The CEO had a no bullshit policy: stimulate, not tolerate. He stimulated change with education, time and money, but did not allow his managers not to change. He clearly indicated which agreements were non-negotiable. Compare it to a fence around a playground. When children sit on the fence, the first time you say: come off, the second time: next time I'll send you home and the third time you'll actually sturgeon them home. As a leader, you are in charge of your own playground: when will they get on your fence? Where are your limits? When do you say: one more time and you can go? What is non-negotiable? You have to be clear in advance about the consequences if your managers don't go along with the change. "Stimulate, don't tolerate. But make no mistake: this is not dictatorial leadership. On the contrary. I would call it stimulating leadership. They had more patience for the employees, by the way. A lot of time was spent on listening, involving and coaching.
Is our society chronically ill?
No, I don't think so. But we are in a transitional phase with very far-reaching changes, and that hurts. This is largely driven by the highly evolving technology. Due to the increasing complexity of society, it is becoming increasingly difficult to make widely supported, clear choices and to implement them. While the realization of goals, dedication and focus is an important aspect for happiness and success, both in organizations and in society. In an organization, the top team has to make those choices, as a band of brothers, with strong alignment and visible passion. One voice, one message. But in politics this is much more difficult. However, they too would probably benefit greatly if they were to arrive at a single point of view more often, and more quickly, and then defend it unanimously and realise it visibly. The will is there, but often it's either far too slow or suddenly far too fast. For the citizen, the feeling of stability is then gone, as a result of which it folds in itself and which strengthens the individualisation in society. But I am positive. Man is a very flexible being. We are undoubtedly evolving towards a new balance.
Read more blogs and stories and discover true change in the making.