A virtuous cycle

I was thinking over the weekend about change - many people want change, some may resist change, but at some level change is inevitable.  Most organizational bureaucracies resist change, and may stand in the way of very necessary change in this economic environment.  And with the dramatic upheaval in this marketplace, those that don't change will certain find the going exceptionally rough, to say the least.

It will be difficult for many individuals to believe that their CEO or management team will ask for ideas, for sweeping change after so many years of "stay the course" or incremental improvements to what seems to be working.  After so many years of resisting change and innovation, will large Fortune 500 firms have what it takes to change efficiently and effectively, or will the turf wars, compensation models and risk factors arise to block needed change?  It was this topic that made me think over the weekend.

You see, in any system, the status quo is usually reinforced.  Stasis is reinforced with statis, and change begets more change (I really wanted to work in the word beget).  In other words, we get from the organization what we expect and reinforce.  If we resist change, an organization learns to resist new ideas, regardless of their impact or possibility.  If, on the other hand, we demonstrate a desire for change and innovation, and reinforce the best ideas, then the organization will seek out and bring new change to light.  Change begets change and can become a virtuous cycle if properly managed. 

Obviously, as scandals with Enron and the subprime mortgage mess indicate, these virtuous cycles can spin out of control if the change and innovation get too far ahead of the insight and regulation, or when compensation is disconnected from real results.  However, at this point the biggest challenge for many firms is simply to start listening and start changing.  There may be a risk down the road to linkages between change and compensation, but that's not the issue now.  We need to move fast, and unfortunately we've managed to eliminate the vast majority of people in any business who are able to think quickly and independently and challenge the established order.  Stasis reinforces stasis, deadlock reinforces deadlock. 

At a time when we need change desperately in many large organizations, we have no organizational structure or methods to do so, and few people left who are invested or have the willingness to create the change.  This is the equivalent of the coming of the industrial age - we have to organize our businesses for nimbleness, sponteneity and change, rather than long runs of the same mass production.  Introducing corporate nimbleness and the ability to adapt and adjust won't occur overnight, but it will be a critical skill going forward.

Comments

[Graham Lauren]

Hi Jeffrey
I've really enjoyed many of your posts and your work is at the top of my reading list. I found your comments on the way organisations reinforce their existing mindsets insightful in this post. It was also in tune with something I just posted about the need for entrepreneurialism in our responses to climate change. I tracked back to you already, but the link to my post is here: http://rethinkingsustainability.typepad.com/home/2009/03/entrepreneurship-and-time-pacing-are-our-best-hopes-for-sustainable-innovation.html
Keep up the good work, and thanks so far.
Graham Lauren