Thinking Faster

Continuous Reinvention

First, let it be said that I am a fan of continuous improvement.  In any organization, the goal of getting better and better at what you do is important.  Eliminating variations and errors, reducing work or tasks that have little or no value is exceptionally important.  However, what I want to understand is whether or not most firms have the ability to constantly reinvent themselves as well.

If you think hard about the logical conclusion of a complete focus on continuous improvement, you'll end up with the fact that every firm in an industry is racing to eliminate waste and cost from products and processes.  However, only one firm is going to be the excellence leader, and everyone else is playing catch up at best, and is falling farther and farther behind at worst.  Need an example?  Think about the real "low cost" big box stores.  Wal-Mart has destroyed most of its competition by a single minded focus on lowest cost.  Kmart and others are completely irrelevant as competitors.  Only the Dollar Store chains, which serve a specific niche, remain as competitors in that space.  However, Wal-Mart has jettisoned everything else. Remember how they used to talk about all of their products that were Made in America?  Gone.  All other strategies have fallen by the wayside to the god of low cost in this case.

Well, if continuous improvement is a good thing but not likely to be differentiable, where should you focus your creative energy?  I think firms should have a team that's responsible for continuous reinvention.  Rather than asking "what can we do better" we need a team asking "what should we be doing?"  Given how quickly tastes change and technology changes, we ought to be constantly re-evaluating our business and strategy.  Yet too frequently we lock into one long term strategy as if the world and our competitors and clients won't ever change.  Rather than have change forced upon you when you least expect it, why not constantly ask the question - what should we be doing differently?

The Momentum of Change

There's little I like better than a pithy quote.  Usually it has meanings at several different levels, and grasping those meanings shines a new light on the way we think.  Many authors have contributed to the one liners we use every day, but I've been thinking about one in particular lately, since it relates to how we change.

In "The Sun Also Rises" Hemingway has a character answer the question "How did you go bankrupt?" with the response "Gradually, then suddenly".  Now, that's a great line, but underneath that great line is a grain of truth for those of us interested in change.  Most change happens gradually then suddenly.

Why?  As I noted in a previous post, Violating the laws of nature, when we change anything we are usually acting within Newton's laws of physics.  Bodies (or organizations) at rest tend to stay at rest.  When we act on them, they push back with an equal and opposite force.  The force we have to apply is equal to the mass (size) of the organization and the acceleration we want.  All of this says that it's hard to start the change initially, but with a constant application of force and pressure, we can begin to move the idea through the organization.

Then, stealing a march from another book and idea, we reach a Tipping Point.  This is the point where the idea becomes relevant or interesting to enough people that they begin to come on board more readily.  This usually happens after all the early adopters and enthusiasts have climbed on board.  Once a Tipping Point occurs, then the change is much easier because you spend less time convincing people of the idea, since they can see who has already adopted the idea.

A great way to see this in action is to look at S-curves.  Many scientists have noticed that adoption of a technology or infection of a group of people by a communicable disease follows an S-curve.  In fact, if you track the adoption rate over time of most consumer electronics, almost all of them follow an S-curve, with the "S" stretching over decades for telephone and radio, and becoming skinnier for CDs or digital cameras.

Here's an example of the adoption of different technologies in the 20th century.  Note that all of them follow the "S" curve model.

What's this got to do with us?  Simple.  Change happens in three dimensions.

First, what I call the Lone Ranger phase.  This is where a small group of evangelists get on board and begin to convince others.  Change is adopted slowly but steadily.

Second, the discontinuity or the Tipping point, where change accelerates because enough enthusiasts and late adopters jump aboard.

Third, the gradual slowing as all of the possible adopters jump aboard, other than the curmudgeons who never change.  Once you reach this point, the change is as fully adopted as possible.  Start looking for something new to change.

Where are you in the changes you are trying to implement in your firm? 

Violating the laws of Nature

When we talk about productivity and innovation, we put into play the nature and approach of how we work.  This means that we have to consider changing the way we work.  What's interesting in this age of business help and self help books is that no one has written a book about business management and Newton's 3 laws of physics.  These laws really apply well to what we try to do every day, in our physical lives and in our work lives.

If you aren't familiar with Newton's three laws of physics, you can take the brief refresher course here.  Basically, the first rule states that objects at rest tend to stay at rest, and objects in motion tend to stay in motion unless acted upon by a new force.  This rule applies to business as well.  Processes and bureacracies tend to remain the same if at all possible.  They remain "at rest" unless someone acts upon them.  Changing a business process requires a unique force, and the bureacracies won't change without an outside force.

The second rule deals with force, mass and acceleration.  It states that the force applied is equal to the velocity and mass of the object.  If you place a force on the object, it will move according to its mass and the acceleration applied.  This is also true for businesses.  The larger the mass, the more ingrained the process or bureacracy, the less acceleration your change will achieve.  Note that there's a corollary to the second law - Acceleration is inversely proportional to Mass.  Thus, the larger the organization, the weaker the acceleration toward the change you wish to make.

The third rule deals with the balances of forces.  It states, basically, that for every force there is an equal and opposite force applied.  This means that as we push change in an organization, an equal and opposite push is occuring not to change.  If you've ever tried to create a significant cultural change in an organization, you've seen this principle at work.

If the three laws apply equally to physical objects and to business cultures, what can we take away from Newton's Laws to help us implement change to become more productive?

First, recognize that most organizations resist change.  They want to stay at rest.  Organizations are made up of people who, although they are capable of learning new things, often resist learning new processes from fear of the unknown.  Thus, you must educate people to the value of the change and get them on board.  Otherwise you violate the first law.

Second, recognize that the size of the change and the size of the organization make your task more complicated.  Break down the size of the change or the size of the organization, or both.  Can you break down your change into smaller chunks, rolled out over a longer period of time, to increasingly larger groups?  As my favorite saying goes, Don't boil the ocean.

Third, recognize that no matter what you do, there will be people and organizations who push back against your change.  First you want to attempt to co-opt them, by demonstrating the value of the change and getting their inputs.  Next, you want to educate them and show them the vision of the future and their place in it.  Finally, if all else fails, you want to isolate them, and not allow them to be a roadblock to what you are trying to accomplish.

There's a book in there somewhere.  If everyone from Sun Tzu to Jesus Christ can be quoted as a management expert, why not the father of modern physics?