"The HBR post cites several case studies illustrating why many transformations fizzle, then two examples for how to turn it around."
But they're not failing fast to learn. They're just failing more. It's definitely not a learning organization.
A health insurer demonstrates a repeated pattern of 3- to 5-year cycles where it launches a change program, takes awhile for managers to get behind it, and then more time to get it funded. A program gets funded for a year but then everyone loses interest, and it gets defunded and dies.
Recently they're failing faster; the three- to five-year cycle is moving to two to three years. But they're not failing fast to learn. They're just failing more. It's definitely not a learning organization.
Just about everyone in the company agrees the culture is dysfunctional:
Some point to politics - competition between the COO and CFO blocking each other's progress. The CEO also had a way of questioning and stress-testing people that discouraged risk-taking => a "play it safe" mentality. Executives who want quick wins scope projects to be done in a year. Most change programs there needed multiple years, so by the time a program extends beyond year one, executives move onto a new initiative.
What countermeasures are there to break a tragic change cycle like this?
Adopting improvement methods such as "agile" or "lean" can change the culture so that results and trust are prized over process and contracts.
Successful efforts at health insurance companies Aetna and Blue Cross Blue Shield of Michigan offer insights:
Organizational realignment — The structure of an organization determines the incentives that drive identity, behavior, and employee understanding of roles and responsibilities and priorities, as well as a sense of ownership and accountability.
Blue Cross Blue Shield of Michigan's tried a more traditional functional management structure but then found it lost customer focus.
It appointed leaders to run market segments with profit and loss responsibility with the focus of changing the product mix and improve profitability. By organizing by customer, cross-functional changes became much easier to implement, and there was a dramatic turnaround in business results.
Improvement methods — a platform for doing work nimbly and at low cost included:
Adopting improvement methods such as "agile" or "lean" can change the culture as employees are empowered so that results and trust are prized over process and contracts. Tactics such as daily huddles drove immediate wins and helped entrench a culture of empowerment.
Employee engagement — Employees fundamentally want themselves and the company to be successful, so successful change agents listen to their needs and help them transition.
Aetna describes how new CEO John Rowe and the senior team "sought out employees at all levels — those who were well connected, sensitive to the company culture, and widely respected — to get their input on the strategy, design and execution of intended process changes."
Executives at Blue Cross Blue Shield of Michigan went into the field to gather input and communicate their commitment to change. Employees were trained in improvement methods ("Lean"), with every employee going through two sessions in accountability training.
"...our focus in modern times on removing or minimizing randomness has actually had the perverse effect of increasing fragility."
Excerpts - Edge Perspectives with John Hagel:
...we all need to find ways to harness the power of randomness, volatility and extreme events to help us grow and develop more of our potential.
Focusing on Black Swans
Nassim Nicholas Taleb writes about black swans [including] three books: Fooled by Randomness, The Black Swan and, now, Antifragile.
Black Swans, in Taleb’s parlance, are “large-scale unpredictable and irregular events of massive consequence.’
The latest book focuses on approaches that enable us to thrive from high levels of volatility, and particularly those unexpected extreme events.
It...willl...prove infuriating to most of our economic, educational and political elites, for he argues that these elites have played a major role in making us increasingly vulnerable to volatility and Black Swans.
...The quest for antifragility
The real opportunity, in Taleb’s view, is to learn and grow from volatility and unexpected events – not to return to where you were, but to become even better as a result of the exposure and experience.
He makes an important point: biological systems in nature are inherently antifragile – they are constantly evolving and growing stronger as a result of random events. In contrast, man-made systems tend to be fragile, they are the ones that have a hard time coping with random events.
Taleb highlights a key paradox: our focus in modern times on removing or minimizing randomness has actually had the perverse effect of increasing fragility.
Related posts by Deb:
3 Things That Cause Ethical Breakdowns in Workplace Culture: Timing a Reminder is Everything Agile Learning for Sustainable Change: Steps through the Sharp Rocks Strategic Agility: Adapting to Now & Next
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