Change management has become a priority for managers in all industries. And while it’s no secret that large corporations tend to have a problem with organizational change, startups and scale-ups often don’t fare much better.
As founder of the change agency NOBL, Bud Caddell has seen this first-hand. With Fortune 500 clients he’s witnessed countless new ideas die in committee because of dysfunction, fear, and toxic short-term incentives. And in high-growth startups he’s watched exponential growth divide cultures, corrupt values, and destroy profitability.
NOBL’s Innov8rs Miami workshop “A Survival Guide for Change” outlines simple fixes to to get change back on track in your organization. As a sneak peek, Bud has allowed us to share highlights from his recent appearance on the Overtime Leader podcast with Gillian Davis.
Why focusing on organizational change?
Bud’s background is software engineering and design. “Eight or nine years ago, I was the innovative product services guy - companies hired me to create new products and services,” he says. “Coming up with them was no problem, but when it came to getting them implemented, my batting average was terrible. The organizations were rejecting those ideas almost like an immune response.”
He realized that they weren't set up to accept new ideas. They didn’t have the right incentive structures in place to accept risk and innovation. That’s when he decided someone needed to fix the way organizations work, and it might as well be him.
Why we’re having a problem with change
According to Bud, there’s a difference between punctuated change and gradual change. Punctuated change what we're used to: mergers and acquisitions, moving into a new market. It’s basic change management work. But he’s found even that has atrophied - many organizations have forgotten how do it.
Then there's the gradual, or evolutionary, change. Customer expectations or competitive trends demand attitudes and behaviors that ensure your people sense and respond to subtle changes outside the company. For example, people’s expectations have radically changed around what a banking service should feel like, so you launch a new banking app - often too late, you’re playing catch-up.
“The problem we face with gradual change is there are no sensing and adapting muscles built into companies,” he says. “The capacity for change is the last true competitive advantage in a developed economy. We need to build sensing and adapting functions back into organizations.”
Change management itself has also changed dramatically. In the last thirty years we've pretty much stopped training managers in anything, let alone in change management. The trainings they are exposed to are the lowest common denominator, implemented based on how many courses can be bought per dollar. “Most of the material coming out of the training industry is aimed at things a 22-year-old fresh out of college can be trained to do quickly. It's still very much talking head stuff, it’s not focused, strategic training.”
So we’re having such problems because we’ve got massive global technological change. We’ve got massive disruption across all different industries. We’re working in a chaotic environment, and we’re trying to do it with people who aren’t equipped to handle the change that was happening a decade ago, never mind right now or five years from now.
Why cross-functional teams aren’t the solution
Bud has witnessed a lot of companies looking to change the way their organization works because they see silos, and know the harm that silos can cause. Often, they decide to simply jump right in to more cross functional work. What they don't understand is there are critical implications of cross functional work.
From a talent perspective, you must have people who can work outside of their discipline, who can see a larger picture. You also need to train them properly, so they understand the way that business works as a whole. If they were just silo players before, they don't understand how a decision made at one point in the value chain ricochets down and causes problems.
“We’ve tried several times to do cross-functional pilots with organizations and found that they simply don’t have the right talent on staff, or they're not training people properly for this way of working,” says Bud. “If you truly want to move faster and work cross- functionally, you have to train differently and hire differently.”
How to recognize your change-resilient people
Successful change management requires engaging the right people. There is a spectrum of work between fixed and fluid environments. In fixed environments you continue to do the same thing, in the same way, and you need people who thrive there, in the core. Fluid environments, on the other hand, are changing all the time. Bud says “There’s where you need people who really understand change - are almost obsessive about change - and who also wouldn't do well in a fixed environment, because they'd be trying to reinvent the wheel every day.”
Bud recommends you evaluate your people on a few criteria: how resilient they are, how accountable they are, how self-aware they are. Those are the three superpowers for knowledge workers in the 21st Century. Here’s how he gauges them.
Resiliency: Everyone is going to feel burned out, everyone is going to falter. Do you recognize when that happens to you, and do you take the time to take care of yourself properly so you can bounce back? We tend to think of resilience as toughness, but in the workplace it’s often more about self-care.
Accountability: How self-directed are you? Employees need to be more like entrepreneurs now than ever before because of the speed, the pace of change now. So, how well do you own what you do, take responsibility for your piece?
Self-awareness: This is a big one. Most of us are a bit uncomfortable or scared when it comes to change. It’s natural to automatically resist. Are you aware of that tendency in yourself? Can you check in and probe into where it comes from - is it fear around your career prospects, or aggravation about a new way of working, or discomfort because you don’t fully understand all aspects of what’s going on? And once you know and name your tendencies, can you move forward?
How to hire change agents
Bud stresses the need to hire not just for skill-set, but for what types of teams you want to create. You need to uncover those soft-skills.
“Google has a pretty bad way of doing this, in my opinion,” he says. “It’s happened to a friend of mine a few times. You’ll go in for multiple interviews for a specific position. Then they’ll come back to you and suddenly say ‘We love you, but we want you in this different position,’ which is one you’ve never heard of. It’s their idea of a resiliency test - how will you react to change? It doesn’t really measure someone’s actual resilience in a work or change environment. From the potential employees perspective it certainly doesn’t lead to trust, which is vital.”
Instead, ask questions like: talk to me about a time when you worked in an environment that underwent change. Bud has found that It helps if people have been through it before and understand how it's challenging in a different way than regular day-to-day.
Also ask them to tell you about the worst job they’ve ever had - not the best job. How did they cope in that environment? How and why did they survive it, or how did they decide to leave it? That tells you now only about their experience with a challenging organization but also reveals a lot about their self-awareness - what their coping strategies are, how they talk about their experience.
Why narrative is key to getting people on board
The first instinct of many of the leaders Bud works with is to hush up, There’s big change happening, they don’t know each and every detail, so they think it’s best to keep quiet until they have all the information.
Problem is, people know something is going on and, lacking information, will just make up stories to fill in the gaps.
“It’s a very human instinct,” says Bud. “Just look at mythology: The sun rises and sets because a chariot moves it across the sky. We'll come up with very fun stories, but also very dangerous stories, in an information vacuum”.
When it comes to change, narrative matters. Bud and his team build a narrative structure for leaders to help them talk about it with their people, and to form a basis from which to direct the change. They call it three P's and a Q.
The first P is purpose: Why are we doing this, why now? The second P is a picture: What do things look like when this change is successful? What does it look like when we finally turn the corner? The final P is part to play: Clearly defining what everyone's role is in the change, what they can do to help the company get there. And the Q is, of course, questions. Leaders need to be vulnerable enough to admit there are questions they don't have answers to yet.
Why you need to check your goal-setting
“I’ve worked with a lot of companies who set very ambitious goals,” says Bud. “One company, a start-up, was initially very successful. They assumed everything they did was going to be just as successful, so they started setting ridiculous quarterly objectives for their teams. Of course those teams couldn’t reach them, and that pain would roll over to the next quarter, and to the next, and so on.”
Human beings tend to over-inflate what they can get done within a certain time period. When you’re goal setting, Bud stresses that you need to question your objectives. Too often, teams hit the end of the quarter and they’re exhausted - they feel like they're hitting their heads against the wall, because they gave themselves unrealistic objectives.
How we get better at organizational change
When there’s that sort of intense, unrealistic goal-setting and expectations from employers, it’s natural that employees demand something in return over and above their pay. A confusion has emerged between accommodations versus opportunities, both from an employer and an employee perspective.
Bud uses a cruise ship to illustrate the difference: “On a cruise ship you’re given every amenity possible, right? The reason is, they want to keep you on the ship, spending your money. A lot of our clients, particularly in the San Francisco area, incentivize with amenities. Free lunch, laundry service, scooters everywhere. The budget for perks is insane. We have clients who have to compete with the company next door on things like who has the best private chef - they’ll lose engineers on a week-to-week basis based on which company has better meals.
Now think about the difference between that, those sorts of accommodations, and actual opportunity. Instead of the cruise ship, say you do the backpack trip across Europe. You’re living in hostels, meeting all sorts of people, having different experiences and learning new things all the time.
That’s the thing that changes you - no-one comes back from a cruise and says ‘Wow, I see the world so differently now, I’ve really grown as a person.’”
If you want to attract the right people and build those change sensing and adapting muscles, you have to think beyond perks. You need to create better opportunities at your organization, not better accommodations. And you do that through giving your people a sense of autonomy, of control. You do it by empowering them.
According to Bud: “We should all have the opportunity to find personal meaning at work. We should design our organizations and the experiences we create for employees consciously, with thought and purpose. I believe it's possible to change the status quo, and get better at change, by making work better for everyone.”
NOBL’s Kim Perkins will be hosting a workshop “A Survival Guide for Change” at Innov8rs Miami, 20-21 Feb 2019. Kim has identified the most common ways change gets bogged down—everything from sabotage to “change for change’s sake”—and in this workshop, you’ll work through the simple fixes you can make to get things back on track.
