Transformation Perspectives Series 02
How do you deal with major changes? The example of digitalization
Digitalization, with the associated “digital disruption”, has become one of the hottest topics of discussion in boardrooms and management meetings. So as to actively address this issue, many companies are starting to offer their staff the chance to take part in design thinking workshops or developer hackathons, or web-based innovation processes and pipelines in which employees can contribute their own ideas or sign up for specialized workshops. By now there is a whole host of examples from various industries in which digitalization has led to radical change, resulting in new types of services, new products, and even new business models – like Uber or Airbnb, to name a couple. Such examples often elicit the following response: cycles of change are becoming ever shorter, the new technologies are disruptive – therefore, we need to take quick and decisive action. Nevertheless, the technological changes are often exponential in scale, while approaches to learning and enabling employees to adapt are at best based on a linear logic.
Until the new business model or type of customer service has become established, employees need to be wholeheartedly willing to make mistakes and learn from them; they also need strong support from their superiors, who should also act as role models in this regard. This raises the question: how do people in organizations respond fundamentally to major changes? How do they cope with increasing volatility, uncertainty, complexity and ambiguity – a set of circumstances aptly dubbed ‘VUCA’ by the US Army War College? In this dynamic and demanding environment there is a high risk that employees will see themselves as pawns, in danger of being sacrificed on the altar of digitalization; they are likely to experience innovations as stressful, and react with resistance.
Graph: One task of leadership is to enable the expansion of the Learning Zone
The strain placed on them is particularly high given that they are forced out of their comfort zone, i.e. made to change their habits. Getting to grips with new ways of doing things often involves making mistakes, and if there is a distinctly negative culture around mistake-making, this can make it impossible to work through the experience in a constructive way, thus adding to the employees’ stress and anxiety. How can both employees and the management team learn to consciously operate in a learning environment in which they can try out creative new approaches without fear of failure? Carol Dweck from Stanford shows in her studies that a person’s mindset is the critical factor that determines whether or not he will enter the learning zone of his own free will; she also shows that less constructive mindsets can be changed. This means that a person can learn how to deal with change, i.e. how to develop the right mindset; it also means that an employee’s perceived learning zone can be expanded. Accordingly, the task of the leadership team is clearly defined: to transform anxiety into confidence, and to expand the employees’ learning zone (see graph).
Given all of these considerations, initiatives aimed at major impending changes which focus only on the content level often fall short of the mark. In contrast, a transformation program which is actively overseen by leaders, who also act as role models, can create the culture that is needed to confront the ever more rapid changes with greater openness, fast alignment and increased curiosity. If you can succeed in meeting volatility with an inspiring vision, uncertainty with understanding, complexity with clarity and ambiguity with agility, this will empower your employees to discover a new and energising meaning for the acronym VUCA.
Dr. Thomas Gartenmann
This is part of the Transformation Perspective series of www.aergon.com
