The Change Masters

Discover what makes a company truly open to change.

Because of the ever-changing markets and aggressive global competition, companies that adapt to new realities and open themselves to changes thrive.

So, the question is—how do you determine the foundation of a company that can adapt?

For so many years, Rosabeth Moss Kanter has been researching American Fortune 500 companies to diagnose the elements that make a company adaptable.

In these blinks, you will learn why good communication, fluid job titles and cross-departmental collaborations are paramount for your company to cut edge of innovation.

You’ll also learn:

  • Why good communication is essential for change
  • What loading guns has to do with innovation
  • Why your project team needs to be protected from the outside world

Collaboration and innovation are often stifled by success formulas in traditional organizations.

Globalization has altered the regulations of business for years now. A couple of huge corporations and markets have dominated the industries today. Thus, businesses have to go with the flow of drastic changes and be globally competitive to avoid collapse. And many companies fail to do so.

The reasons behind such failure are the success formulas that often hold organizations back.

A success formula is constructed by companies that have succeeded some adversities. And this is often an outline about how an organization should be run.

This helps companies in approaching issues such as production techniques or company's structure. And because success formula works, it becomes the standard protocol that retard company development.

In lieu to the topic, the author ran a study on a textile manufacturer that struggled with yarn breaking since the operation began, which prompted the owners to consider it as a normal cost of the business and refuse to do some actions to fix it.

When a newly employed plant manager joined the company, he enhanced employee communication and adapted a co-worker’s overdue idea to revamp the production procedure to reduce breakage that he had in mind for 32 years but refused to share until asked to.

Companies that stick to the status quo and refuse to collaborate are called Segmentalist, and this determines whether a company adjusts and prospers, or ceases to flow and fails.

Segmentalist organizations stifle innovation by keeping their employees in strictly defined roles.

According to the author, there are several behaviors that can stifle advancements as she studied on modern-day businesses. She referred to it as segmentalism.

Segmentalists make solving dilemmas in creative ways difficult. The company's structure blocks these valuable ideas and the people are subjected to narrowly defined roles with minimum motivation and opportunities to bloom in their areas of expertise.

To encourage creativity, provide opportunities for your people to get out of their shells and share ideas to form collaboration. This is how true innovation can be attained.

Segmentalist organizations are unnecessarily hierarchical and often strictly defined roles within the company. As a result, developments are usually blocked and stumbled right before right before they even progress.

Instead of establishing healthy collaborations between departments, Segmentalists encourage competition and hoarding of resources to secure their statistic standing.

A company that the author visited had to train their line workers. A manager thought that if had granted a computer, she could quickly and cheaply train their line workers. But a lot of bureaucracy was necessary to approve the fund, and other managers did not want to take time away from their usual tasks and neither did the mid-level managers from the IT department in fear of being outworked.

The manufacturing company is obviously a segmentalist, which hinders survival. Being integrative would have done the company better results.

Integrative companies have complex organizational structures that foster collaboration.

We already know that providing freedom to get out of their comfort zones is a vital part of development. Now let us figure out what makes it important and how integrative organizations are able to foster it.

Integrative organizations often use complex organizational structures to promote collaboration.

But to achieve innovation, complexity is a requirement. Fostering it would mean exposing your employees to more information that the teams need to collaborate and interconnect to pool human and material resources together.

Approaching problems from different angles to solve them is a healthy sign of innovation. And when different mindsets collaborate with areas of expertise, innovation can truly arise.

A matrix organization is also a great way to attain innovation, in which departments and processes are all properly merged.

The departments that can often be managed individually such as production and sales, and product design share a common goal: creating a product that can sell well.

That said, in a matrix organization, these are the departments that are connected when it comes to not just responsibilities and rewards but management as well. To put it simple, they are obliged to collaborate.

Open-ended and broad project assignments are usually helpful in providing opportunities for the employees to improve in their own pace and efforts. By doing so, you encourage creativity.

A medical company that the author has conducted a research on showed a good example when one of their manufacturing managers was tasked to design a new kind of machine, but the upper management gave him a rough budget. Even though, he was given with the freedom to design on his own, select his own team members, follow his own ideas, and with few constraints. Because of this kind of provision, he was able to design a new machine and it sold very well once it hit production.

Information, resources and support are crucial for innovation.

A certain degree of complexity and freedom to work on own ideas are not all that innovation needs. Information, resources and support are basic commodities that are required for innovation.

A free flow of information encourages innovative ideas, especially when new perspectives are introduced. Thus, access to multiple sources of information is necessary to promote innovation.

After all, the most innovative companies per the author’s own study are those that maintained a face-to-face information culture.

Companies like Chipco and Wang Laboratories use open communication systems in their entire organization, which means anybody at any hierarchy level can give input on new ideas or even offer constructive criticism.

3M is a good example of an integrative organizations that provide important resources to their employees. 3M established an innovation banks that fund projects requested by the employees without the need to endure bureaucracy because such company knows that employees need to feel supported with endorsements or approval whenever they try to purse a project for the success of the organization.

Boost support structures and stimulate more personal relationships by rotating them through different jobs.

Managers working for entrepreneurial companies do make unusual career actions like transferring from HR to finance to manufacturing even without formal training with a goal to use such rotation to add fresh eyes to new kinds of problems in each department to enhance innovation.

By doing so, connections between networks are built to easily depend on each other for necessary additional information or resources.

These facts prove that information, resources and support are powerful components necessary for creative process. But applying too much of these could be counterproductive as well.

Too much power circulation is harmful.

Without a defined limit on power circulation, people might abandon one project after another, and such action can hurt the whole organization. Therefore, it is imperative to neutral power circulation through focus, but the question is—how?

A successful organization advance innovation then maneuver them in the right path. Power circulation that takes place through diversity, interconnectivity, freedom, and complexity is important for giving employees the room to be creative. However, the same provision and leniency can create stumbling blocks.

A greater concentration of power by implementing formalization, clear procedures, and allocated funding can make a project happen despite the difficulty on execution details that can arise due to overflowing freedom.

But such shifting of power from circulation to focused cannot be done overnight. Ergo, the best solution is to never fully scatter power, rather temporarily loosen it.

By doing so, your organization would not have to be victimized by segmentalism, your people delight in autonomy, and you still get overarching structure through tactical decisions.

The headquarters of General Electric Medical Systems is the central entity that micromanage all of the company's important projects. Enough decentralized power to permit ideas and projects to grow on their own, but it chose to control over large spending, decide on the overall strategy, and give additional support to more important projects.

Hence, decentralized power and creative complexity are both needed to stimulate creativity, but focused upper management is what sees a project through.

Before you start your project, gather information, plant your seeds and ask for support.

Even though you already provided information, resources and support, innovative ideas are still not guaranteed unless you follow these steps in implementing ideas.

The first step is to collect enough date for a feasible and goal-oriented project definition, because the author discovered that most project ideas come forth when employees collect information and ideas from within their “neighborhood” at work. Walking around is how Hewlett Packard address this management, wherein managers get out of their offices to gather information and plant their seeds of information in hopes of making their projects successful.

Through ‘walking around’, the company's network of supporters can aid advance the resources that projects need.

To get people to buy in or sign on to your project is the goal, and this can happen by offering money, influence, time, or information. You can start by clearing the investment or getting approval from your boss to solicit support elsewhere in the organization.

Then, go gather some cheerleaders or the support coming from lower-ranking team members. These employees are important because the more people backing your ideas, the more executives find them worth their support.

At General Electric, cheerleading is referred to as loading the gun. Yes, peers are rather the ammunition. While another computer firm called it tin-cupping, because you're humbly asking people for help.

Once you've got enough resources and support, concentrate on maintaining your momentum and successfully completing the project.

Don't let your team members get distracted by external problems or noise.

The author also discovered that projects often fall apart over time regardless of how concrete the information, support, and resources are, because of lack of focus or receiving external pressure from the rest of the organization. And these distractions should be ceased right away.

Criticism from the rest of the company cam harm your team’s concentration and overall confidence on the project.

A project that reaches momentum attracts attention from the rest of the organization, which could mean interference from other people and employees that are not directly involved through bureaucracy or criticism. Therefore, details must be left to the team while the project head concentrate on internal politics and PR.

To deal with unsolicited and unnecessary criticism, dust it off and ignore it completely as you keep your eyes on overall goals or mission. Just like a Google project manager who knew how challenging it was to be critical when a specific project mirrors the company values and say, “This project is directly connected to our highest mantra: don't be evil.”

As a manager, it is tasked to your responsibility to deal with criticism in behalf of your team members as they focus on your team’s goal.

Data General’s project team leader, Tom West, understood this when he was tasked to manage a project designing a new computer. He made sure to keep his team in the dark when it comes to criticism and interference as part of their unspoken agreement: “We won't pass on the garbage and the politics.”

Use team-building skills to maintain your project's momentum.

When projects drag on for quite a long time, the people working on them can start to lose will and motivation. And other responsibilities outside of these projects only tend to make matters worse. As a result, these people may put in mediocre efforts or even sabotage it. It is your job to avoid this from happening through team-building skills to make them feel involved.

It's a good idea to have team members meet regularly. This also ensures that everyone stays up to date on the project's developments.

One manager at a computer chip company found his team dragging their feet slightly, which is why he started holding regular meetings with the core members. He started sending status reports to all the stakeholders. He also gave constant presentations to the upper management.

By doing so, this sent reminder to everyone of how paramount the project was. And everyone was on the hook to know what will happen next with it.

This helps prevent boring routine by having your executive supporters check you out to remind your people of what they effort on.

Portion rewards with your team members. Avant-garde projects gather attention from upper management and can boost career, so applaud your team's efforts in meetings and allude to your superiors about their achievements to encourage enthusiasm.

Teamwork isn't always necessary and can even be counterproductive.

Getting employees to actively get involved in projects can be tricky in innovative organizations yet still doable. However, this is still not enough to solve all corporate problems on their own.

Cultivating too much teamwork and doing numerous meetings can make simple tasks very time consuming.

The author studied on a company that used the term task force to determine the company's policy on cooperation, and wherein the employees had to form task forces to approach even the simplest of issues.

Thus, employees were exposed to many meetings that the conference rooms were always fully booked yet the offices were unmanned. As a result, hatred against task forces was developed, and everyone just wanted to be left alone with their own tasks.

At the end of the day, unilateral decisions can be more efficient than group involvement.

The author discovered that teams operate nonpareil when they are tasked with staying ahead of change.

Involvement is not always suitable. If expertise on a given topic is valid then there is no need for additional contemplation when reaching for a decision.

Participation is also uncalled for if your people are uninterested. With a limited time and employees that are productive when working on their own, teamwork can only hurt more than it helps.

After all, teamwork is just another tool that you have to weigh whether you should utilize or not.

A company can't change unless the employees truly believe that change is possible.

A change master's most significant skill is implementing change in the whole organization. Encouraging power circulation, participation, and making resources ready are not all that it takes to do so. The corporate culture has to be all in for changes.

General Electric’s vice president once said that if your company is not fully prepared for innovation, your ideas won't break into the market, even if they're great. This means, your whole organization must be willing to adjust to the changes that innovation requires. And your employees must believe that change is possible otherwise, they would not be motivated toward it.

The architecture of change requires a solid foundation. It also needs a history of change within a company as its key factor in the future promises of innovation.

Honeywell’s plant manager struggled to interest his people in quality circles—the groups of workers accountable for assessing and deliberating about quality standards in a department. He checked the company history and found that the previous management had not kept a lot of its promises to innovate—even fixing the ventilation.

The manager’s first step was to come through on his promises for changes, and his people took him seriously when they started seeing the changes he implemented.

The first step is to earn your people' trust and you are on your way to innovation.

The way a company tells its story affects its attitude toward change.

The author unfolded an interesting fact about companies that repel changes: they elucidate their own company history in a different manner than those who welcome change.

Change-averse companies are proud to have stuck with the usual and not changed since the beginning. While companies that welcome changes emphasize on the changes they have gone through.

This only means that the companies that stress on the changes they undergone are more prepare for the future changes, and they view them in a different and more positive light. Otherwise, when a part of an organization’s change history is crooked, then the company culture will be affected.

Company history is usually covered to an extent. Say, a project is successful, upper management might pretend to have supported it all along despite the controversies. When in reality, there is often a disagreement before a project takes off.

Altering these company histories invites false understanding of change, and it discourages people to push forth their ideas. First bump in the road, and your employees could swerve than persevere it out.

So, to be an integrative company, always be up-front regarding the past changes that took place, because positive change histories motivate employees to welcome change when it is due.

Final Summary

Innovation necessitates freedom and decentralized power to enable people to get out of their comfort zones at work. It also advocates honesty regarding the company's change history. It requires willingness to help employees collaborate to come up with amazing ideas.

Actionable advice:

Create a micromanaging structure that helps navigate projects toward the right direction.

Do not distribute power fully, but rather temporarily loosen it to bequeath freedom and autonomy. Avoid segmentalism from waltzing in your organization by maintaining an overarching structure that helps make tactical resolve.

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