What separates transformational change from any other sort of change is the anchoring presence of an origin story. Origin Stories help illustrate a new paradigm in a way that's organic and personal to the people involved. It offers a new way of viewing key challenges and insights to solving them.
Transformational change is about more than the immediate adoption of a new structure, process, or technology, it is about the way we think and perceive the world around us. Transformational change produces a genuine and ongoing reassessment of prior assumptions and behaviors and the subsequent emergence of new, homegrown responses. An organization that experiences a transformation is pulled by the paradigm towards novel solutions to existing problems.
Transformational change is self-directed. Leadership can amplify, enable, role-model, and curate experiences, but they cannot direct a transformation. Transformational change is the result of emergence from beliefs, and direction can induce resistance and backsliding. These point to some reasons why organizational transformation is so challenging in large established organizations, where beliefs are strongly set and reinforced by structures and policies.
In the following series of articles I will try and offer a perspective about (1) the nature of organizational transformation, (2) the importance of self-direction, (3) the negative feedback loops caused by coercion, (4) the challenge for large established organizations, and (5) some practical advice for practitioners in large established organizations.
I’m writing this as practitioner, trying to understand the topics more fully myself. The literature surrounding organizational transformation is diverse and touches fields from complexity to sociology to behavioral economics and change management. There are many concepts that intersect. My goal in these articles is to connect some dots from a people-centric lens.
I hope you have as much fun reading it as I’ve had writing it. Here we go…
What is Transformation?
In recent years “Transformation” has been used to describe any number of phenomena. Its been accompanied by a gaggle of buzz-words. And in some circles the word is used interchangeably with “change”. But true transformation is not superficial. Transformation is a fundamental shift in the nature of the system.
In systems involving people, there's a difference between change that tips the system into a new state, and change that transforms the system altogether.
Lets take an example of a team of basket players to illustrate the point:
Case 1: what if the coach calls a timeout. Is this a transformation? The players immediately are doing something different, check. They have an opportunity to reassess past behaviors, check. But has anything necessarily, fundamentally changed about the nature of the system? Perhaps something in the huddle prompts them to reassess their strategy. Perhaps they sub in a new player or call a new play. But these are not an direct and inexorable outcome of the timeout. They could have easily reset to their previous state, and when the referee blows the whistle again, they are back to playing the same way.
Case 2: what if the basketball association introduces a new style of ball or a new rule for counting three point shots? The introduction of the new structure might prompt a reaction from the team. If the change rises to the level where previous ways of approaching the game no longer enable the team to ways of winning the game, then it might prompt a search for a new approach. Is this transformational change? Getting closer, but perhaps we can think of this as a non-deterministic precursor to transformation.
Case 3: what if the high school basketball players stopped thinking of themselves as athletes and instead as entertainers. Then some very interesting things might happen. The nature of the system could change in non-linear, unpredictable way. They may be able to see and seize a new opportunity for televising their games on twitch or promoting themselves off-court on tiktok. The behavior emerges from a new way of looking at existing structures. This is transformational change.
Transformation is increasingly pursued as a stated business objective. These initiatives are the result of an analysis of past assumptions and behaviors, the current competitive landscape, and a theory of the case for a different approach in the future. Transformations bring with them new capabilities. These capabilities offer durable competitive advantage to see and seize opportunities.
The New Paradigm
In the digital age, Organizational Transformation is often accompanied by the adoption of new technology. But having technology by itself does not lead to durable competitive advantage. Today, pursuit of technology-driven transformation costs organizations billions of dollars with limited or even negative results.
I’ve seen up-close how the pursuit of cloud technology adoption without the underlying organizational transformation leads to increased technical complexity and cost escalation, precisely the opposite outcomes that they were pursuing. Organizational transformation is a pathway that can help connect new technology to the individuals who use it.
The digital age is in part defined by the speed, complexity, and dynamism of markets. As a result, organizational transformations have welled up from an analysis that old fountains of competitive advantage are under threat, that the static models of value creation are not sufficient, and that future advantage will come from a superior ability to sense and respond to customers amidst a competitive landscape.
This analysis is summed up by Klaus Schuab, the founder and executive chairman of the World Economic Forum:
In the new world, it is not the big fish which eats the small fish. It’s the fast fish which eats the slow fish. This salient idea is the bud of a potential superpower: to see the world as a competition for speed. To translate into durable competitive advantage, it needs to blossom from the idea into consistent repeatable action.
Beyond this I won’t go into the details of the new paradigm. Enough ink has been spilled on this front already. My question for the remainder of these article is instead, why is it so effing hard?
People remember paradigm shifts. They are phase transitions that redefine how people see themselves, the people and world around them, and consequently change how they govern their behavior. Likely, anyone reading this can conjure up examples from religion, science, and business without much effort.
Paradigms past are relevant today. They are our history, but they also serve as foils for new paradigms. For example, the old saw of Taylorism is often used to explain the new business paradigms.
Paradigm shifts occur when people are able to leverage previous paradigms to cast a narrative of the past paradigm’s failure and cast a narrative of the past paradigm's failure and draw out a dramatic contrast for the future.
The Ingredients of a Paradigm Shift
The Paradigm shift was coined in the book “The Structure of Scientific Revolutions”. In it the author theorized several key ingredients to a paradigm shift. These included a reconstruction of prior assumptions and reevaluation of prior facts.
Upon reflection, the new paradigm would need to stand in stark contrast to this old paradigm so as to clarify the new model.
The new paradigm is not a complete world-view. It stands sufficiently open-ended. Further experience and reflection reinforce and add to the paradigm.
The Post-Transformation Narrative
As part of an attempt to better understand the mechanics of organizational transformation, I recently interviewed 55 experts on the subjects of innovation, organizational change, and complexity. They held titles from coach, to professor, to CEO.
A common hallmark of a conversation was a recounting of an event that informed their perspective, a sort of origin story.
These stories fit a remarkably consistent pattern:
- narrative that expresses selective aspects a past paradigm
- description of the origin story that leads to a revelation
- description of the new paradigm characterized by its values, aim, and implied behaviors
- experience which validates and extending this narrative
I was struck by the consistency of this narrative pattern. The image below illustrates the elements that stood out. I'll go into this and more in a following post.
In a next article I’ll dig into the importance of self-direction in the organizational transformation journey.