Change is changing

by Dave Gray 26 Oct 2011 Blog Post, The Connected Company

We talk about change management. Change as a process. We tend to think of change in business as something that needs to happen once in a while, when the need arises. It’s uncomfortable, but necessary. There is a whole industry called Change Management that has built up over the years to help people through these inflection points. Change management is big business these days, because just about every organization knows they need to change. And the bigger the org, the harder it is to change.

The general paradigm and “message to the troops” in change management goes something like this:

We are in a situation that’s problematic. Our profits are declining. We need to make a change. The vision for our future is (whatever it is). We all need to band together and change our routines and processes to get from here to there. Once we have gone through this difficult period we will be over there, in our happy place, and everything will be great.

But change is changing.

Change is Changing

The problem with this approach is that it looks at change as a difficult transition between two states. But it’s becoming increasingly clear that change is not a once-in-a-while thing so much as something that is going to be happening all the time.

Change is accelerating, to the point where it will soon be nearly continuous. Periods of sustained competitive advantage are getting shorter, and there are a host of studies that confirm that. It’s not just something that is happening in technology, either. It’s happening in every industry.

We need to change the way we think about change.

If change is a constant, then the only real sustainable competitive advantage is to be able to grow and evolve continually, to stay ahead of the competitive pack.

You can’t do this with the traditional business structure that we’ve inherited from the industrial revolution. This isn’t like redecorating a room in your house or moving the furniture around. This is a major rehab project that might affect the foundations, the plumbing and everything else. It requires some pretty fundamental rethinking of the way your company is structured, how you execute your strategy, and how you’re going to evolve.

What the world requires today is organizations that are capable of continuous creativity and innovation, that can adapt and evolve on a continual basis; organizations that can generate new businesses, that can sprout and branch into new categories and new industries; that can recover quickly from failures and move on.

This is not change management but portfolio management.

Portfolio management is not so much about taking big steps as it is about balancing risk with opportunity, planting a lot of seeds and nurturing them until they are big enough to succeed (or fail) on their own. Portfolio management requires a tolerance for risk balanced with some big expectations, and an expansive view of what’s possible.

The whole attitude toward change needs to change. It can’t be about leaving a rough patch and moving everyone to a happy place in some imaginary future. It’s got to be about the excitement of pursuing new business opportunities, not because it’s necessary to beat competitors (although that is certainly the case) but because it’s energizing to try new things, to explore new territories, and to experiment with new business ideas.

It can’t be change anymore. It’s got to be fun.

  • Steve Golab

    As you say, change is accelerating. But hasn’t this been going on for years and years now. I always consult back with Drucker’s book on Results that Matter (Peter Drucker 1993) and the concept of Portfolio Management was just as obvious then as it is now.

    For me, the change in attitude that is needed is pointing to a need for a cultural change, and the fastest way to change a culture is:

    0. Be willing to let go of the past (that which the majority of a mature company has a stake in) and let new possibilities work on you. Getting the company founders more deeply involved again can be a critical aspect of this exercise (Goswami 2009 –

    1. Change the conversation with your coworkers from one of problem solving to one of building stronger community inside of your business. If everyone can clearly communicate their own passions/skills that they are bringing to the business it will be easier for teams to self-organize and create innovative products together. The idea that community is the strucure of belonging that foster innovation is not a new concept either (Peter Block 2005 –

    2. Make better decisions when it comes to time prioritization, hiring new employees, and transitioning out any deeply rooted employees who are not willing to change.

    So, it seems, social business design is really not rocket science. Its just contemporary organizational design, a field which continues to evolve but I would argue that pace of change in that field is very slow and organic. Although I agree fun is a key element of building community, I still think change is the driving force.

    • Dave Gray

      Thanks for the comment Steve,

      Most definitely this is not a new trend, although for some reason most company cultures have not been keeping up with it at the pace that’s required. A lot of the resulting pent-up customer demand is going to born-on-the-web companies like Amazon, who have cultures that embrace continuous change. I think there are a lot of things that get in the way of this. Large companies that have learned to embrace continuous change are few and far between, but it is possible. Companies like IBM, GE, Procter & Gamble and Wal-Mart are examples that come to mind. I’m sure there are more.

      The primary shift comes down to moving from an internal focus to a market-and-customer focus. As companies grow it’s a natural consequence to focus more on internal relationships than the relationships with customers. That’s fine if your industry is stable, but if not it’s a sure path to obsolescence.

      • Steve Golab

        Dave, thanks for replying back to me. I really appreciate your feedback and giving me better insight into your thoughts about change — a topic that I’m very passionate about. I find it especially interesting to think about the unique challenges faced by the behemoth global organizations that DGC is catering to.

  • Djuka Selendic

    Thank you for a very insightful article. I think about change often, but on a more micro level, as I work on multiple projects simultaneously so for me, change management is more about having efficient change control processes in place to make my job easier. I think some of that project change control thinking can be applied to portfolio management that you talk about.