
Organizational transformation entails understanding where the organization is today and where it wants to be tomorrow in terms of people, products, services, processes, and technologies. In order to accomplish this transformation, we have to determine the organization’s ‘eligibility’ by assessing its Strategy, Politics, Innovation, Culture and Execution (SPICE) factors. The SPICE factors help us determine (1) the underlying motivations of why the strategy was developed, (2) who are the power players in the organization, (3) who is really responsible for innovation, (4) who is an example of corporate culture and (5) who would help in carrying out this transformation across the organization.
As the organization begins its transformation journey, one glaring fact that is revealed is that the most crucial element to accomplishing change cannot occur without people. People are your organization’s lifeblood. People are the biggest champions of change or the biggest obstacle to it. Thus, in order to bring transformational changes in the organization, we have to understand the following concepts that affect individuals and group dynamics:
A. Inclusive Transparency
1. Cumulative Error – Your message of transformation can be distorted along the way and could be translated into many things (e.g., layoffs, outsourcing, etc.). To address this:
2. Deep Time – People believe that the past was shorter than the future. For organizational transformation, this means that if the future does not have a due date then there is the tendency to think that transformation can happen at a later time. To address this:
3. Externalities – Everyone affects everyone even if they don’t know it. For organizational transformation, this means that even the most isolated action in the organization can hinder change. This could be merely someone saying that they don’t believe transformation is going to be successful without giving any constructive feedback. Essentially, by saying this what people have done is created an opinion that is the seed to create doubt in others. To understand this:
4. Inference to the Best Explanation – The truth behind something is often reasonable and the best explanation. For organizations transformation what this means is that while there are many truths behind the failure of a transformation activity but often times it is the simplest explanation of what happened that prevails. Of course, we have to be cognizant that this explanation is bias-free and objective. To determine this:
5. Shifting Baseline Syndrome – Depending upon various variables, being ‘normal’ differs from one person to another. For organizational transformation, this means that the perception of what needs to be achieved can drastically vary from executive to the individual contributors. To address this:
6. Subselves and Modular Minds – People have multiple versions of themselves which change and morphs based on who they interact with. For organizational transformation, this means that to get to the truth behind the truth be ready not to take things at just face value. To understand this:
B. Bite-Sized Information
7. Cognitive Humility – People have a finite capacity of absorbing and retrieving information. Due to this finite capacity, people look for information that sits well with their own perceptions. For organizational transformation efforts, this means that if it is perceived that something similar has happened in the past with no great results then your current transformation effort would be considered just another ‘talk’. To address this:
8. Cognitive Load – At any given moment in time, people can only handle small amounts of information to make decisions. If there is too much information then there is a high likelihood of stagnation that often results in indecisions. Perhaps that is why video game designer gives the player bare minimum information (e.g., lives remaining, mission completion status, etc.) so that they can accomplish what they need to and move on to the next task. To address this:
9. Constraint Satisfaction – With too many options we become paralyzed and thus in order to get things to get moving we have to have some constraints around them. These constraints can come from within or outside the organization for the purposes of transformation efforts. To address this:
10. Cultural Attractor – People are attracted to ideas and thoughts that are easily digestible. Simplicity is the name of the game even in organizational transformation efforts regardless of how complex it really is. To address this:
11. Name Game – We are biologically programmed to name things and classify them but often times this can lead to not understanding what is behind that name. For organizational transformation, this means that create activities names that are easily identifiable. To use this:
12. Umwelt – People often accept reality without going into depth. For organizational transformation, this means that due to the increasing pace of businesspeople have developed certain shortcuts in their minds of how things work. To address this:
C. Big Picture
13. Contingent Superorganisms – After people have achieved what they want to achieve individually then they automatically become more open to helping others and larger audiences. That is why at a certain point in time, people like to give back and create a legacy of selfishness. For organizational transformation, it becomes really important to figure out who these people are. These are not necessarily those who are perceived to be accomplished (e.g. superstar executive etc.) but it could anyone from the lowest rungs of the organization to people outside the organization. To address this:
14. Copernican Principal – People often feel that their role is insignificant compared to the big picture. These thoughts can lead to people being tuned out and just punching the clock rather than understanding their value in the organization. To address this:
15. Focusing Illusion – People often focus on the ‘only if’ and live in its illusion. For organizational transformation, this means that people often mistake transformation as a big bang activity while it is a slow steady approach to constantly improving organizations. To address this:
16. Holism – The idea here is that in the big picture, the little details do count as well. For organizational transformation, this means that no information is minuscule enough that it has no effect of transformation. In fact, even the minuscule information if not understood and addressed can lead to a snowball effect that can come from the left-field when it comes to the transformation journey. To understand this:
17. Positive Sum Game – Everyone wins. For organizational transformation, this means that transformation objectives should be balanced in a way that all teams that are involved get benefits out of it. For some, this benefit would be having a better idea of how the business works, for some this benefit, would be doing more with less, for some this benefit would be transitioning to another career. To create a positive-sum game:
18. Powers of Ten – By understanding scaling laws you can have a better idea of where anything sits in the bigger scheme of things. For organizational transformation, this means that you should ask and assess and assign actual values in terms of the magnitude of transformational activities. To do this:
19. Self-Serving Bias – People perceive themselves to be better than others. For organizational transformation, this means that for successful people would take credit but for failure, they would blame others. To address this:
D. Patterns Matters
20. Cycles – Everything is cyclical. For organizational transformation efforts, this is a disaster repeating itself in terms of hiring the same kind of people, redundant processes and outdated technologies. To address this:
21. Double-Blind Control Experiments – This method is used to identify the underlying biases people have without even recognizing them. In organizational transformation, this can mean the difference between onboard or just being an observer to see what happens. Use this method to:
22. Fixed-Action Patterns – Certain behaviors and attitudes displayed by people are not necessarily biases but have been learned and reinforced over time so it becomes a habit. To leverage this:
23. Hidden Layers – As time progresses people develop layers between what is the reality and what is perception. These layers help develop habits that can be restarted even after practice years later. For organizational transformation, this means that success and failures are learned over time and can be used to affect the organization. To figure this out:
24. Predictive Coding – People are a product of what happens to them and over time this becomes a pattern recognition system to engage or avoid. For organizational transformation, this means that people’s thoughts and eventual actions are based on what has happened to them. To leverage this:
E. Team Creation
25. Effective Theory – If you can’t measure it then you can’t improve it. For organizational transformation, what this means is that while it is useful to have plans and work towards achieving the objectives of those plans but they are meaningless if it is not being measured. To assess this:
26. Expanding In-Group – The world is a global village and there is more interconnectedness than anytime else in our history. This interconnectedness can lead to looking at solving problems from different angles. For organizational transformation, this means that the more diverse and cross-over that you have in your teams, the better it would be able to solve problems on a bigger scale. To leverage this:
27. Fear of the Unknown – People’s known and unknown biases can make them inaccurately determine their risks and benefits. For organizational transformation, this can mean the difference between making a big gain versus remaining in the status quo. To accomplish this, do:
28. Rational Unconsciousness – People make conscious and unconscious decisions despite their awareness of their weaknesses. For organizational transformation, this means that despite people’s knowledge of what is the right thing to do people unconsciously continue to do the opposite. To address this:
29. Structured Serendipity – Luck is found through a concerted effort in achieving objectives. For organizational transformation, this means that a structure should be put in place with the ability to be flexible and adapt if necessary. To do this:
F. Experimental Boundaries
30. Failure Liberates Success – Encourage failure and experimentation. For organizational transformation, give your teams the ability to refine, reiterate and rethink problems to solutions. To influence this:
31. Kaleidoscopic Discovery Engine – When it comes to insights and innovation, people are always learning from each other. For organizational transformation, this means that there is constant learning activity going on within and outside the organization. Sometimes these activities can excel in the transformation journey if they are given enough thought. To leverage this:
32. Pessimism Meta-Induction – Every theory is up for debate and discussion in light of new evidence. For organizational transformation, what this means is that the organization has to be constantly challenged to question the status quo not only periodically but also ad hoc to check if stated objectives are being achieved. To accomplish this:
33. Randomness – There are certain things that we cannot control. For organizational transformation, this means that regardless of how pristine and well-thought-out your plan for transformation is it is bound to run into unanticipated obstacles. To plan for this:
34. Skeptical Empiricism – Don’t believe by merely observing but by careful thought. For organizational transformation, this means that most people get easily swayed by what they observe and thus mechanisms should be put into place where they are free to challenge the status quo with evidence and deep thoughts. To remedy this:
35. Uncalculated Risks – People often worry about the big stuff but don’t take into account the little stuff that can affect their risk-taking. For organizational transformation, this means that being less precautious on the little stuff can slowly thwart efforts. To address this:
Now that we have understood the varying concepts that affect organizational transformation efforts, let’s ask the following questions:
Currently |
In the Future |
Who is involved in organizational transformation activities within and outside the organization? | Who should be involved in organizational transformation activities within and outside the organization? |
What outcomes the organizational transformation activities are revealing? | What results are expected for organizational transformation? |
Where does organizational transformation begin? | Where should organizational transformation begin? |
When does organizational transformation become important? | When should organizational transformation become important? |
Why people work on organizational transformation? | Why people should and shouldn’t work on organizational transformation? |
When you are asking the above questions, keep in mind that organizational transformation entails all aspects of the organization. Without people transformation, without process transformation, without product/service transformation and without technological transformation, there is no transformation at all but just another illusion of transformation.
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