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The Change Gap

March 6, 2018

 

This graphic is one I prepared for a meeting of senior change personnel. The initial thoughts of the company organising the event were to speak on something like regulatory changes eg GDPR or MIFID. While these are certainly topical, they are being done-to-death by every consultancy so why should this breakfast invitation stand out and persuade people to attend.

My alternative approach was to think about what I see causing issues for those charged with leading change? What causes them to lose sleep?

My suggestion, which was accepted, relates to an issue I have seen for some time and that is that the nature of change, at least in the world of financial services where I live, is changing and our ability to keep up, let alone get ahead, is struggling and, many would argue, failing.

I can't say that this keeps me awake, but it does keep me thinking and looking for ways to explore the issue and identify possible solutions.

The black arrow in the diagram above represents the fact that the complexity of change, along with the pace required is growing rapidly and only showing signs of accelerating, not slowing.

When I installed a front office trading system for a leading bond dealer in the early 1980's it was located in a single building, ran on two central boxes (we didn't use the word "servers" in those days), had around 100 terminals connected directly by dedicated cables and took in two data sets daily that were delivered physically on tapes and  loaded over-night. Think today about a global user base connected over virtual networks to dispersed server farms using real-time data to trade in nanoseconds. I am the first to accept that it was easier when I did it, but it is an illustration of growth in complexity and pace.

Similarly while modern regulation only started in the UK in 1986, if one now looks at the current influences and demands from Europe and the US they are not always in tune or synchronised with UK developments; another example of growing complexity and pace. Other examples abound.

In some areas there is a compounding factor and that is uncertainty. Many changes evolve over time rather than being stated up front and then remain unchanged during the life of a project. The term "direction of travel" is used more and more in the regulatory world and reflects the fact that while the broad intent and aspirational schedule may be known, the details are not and will only be developed gradually. Thus the ability to plan with confidence is limited, yet the risk of not doing anything keeps growing.

The green line illustrates the growing efficiency brought about the use of methodologies, programme offices and project and planning software. These have grown substantially since the 1980's and can be seen evidenced in the number of "qualified" change personnel and the membership of change bodies. This has largely been an "industrial" exercise of standardisation, measurement, reporting, governance and incremental improvement.

While rarely intended, the net effect is often a one size fits all approach with little real opportunity for a project manager to adapt or deviate from the "standard"; Prince 2 is a case in point. It is intended and designed that one can pick and choose the elements that are appropriate for each project, allowing a lighter touch for smaller, simpler endeavours yet a robust structure for bigger, riskier work. In practice this difference is rarely seen and the processes for a "large" project swamps and cripples a "small" project.

Being industrial there is a level beyond which one cannot go, ie the best possible efficiency. As one approaches that then the benefit of making additional improvements diminishes.

In the early part of my working career I would say that the productivity/efficiency gains were ahead of the complexity/pace impact and we saw improvements in real and perceived delivery of change. I would argue today that we have passed the crossover point and now face what I have labelled as "The Change Gap".

This gap is essentially the difference between demand and supply. It could easily be seen as a capacity issue, ie we could solve the issue if we point more people at the problem, but is actually more of a capability issue ie can we mentally, behaviourally and collectively do what is needed? Just doubling or tripling the number of resources is not the answer.

A similar concern about the limitations of the "industrial" approach is voiced by John Kotter, a leading thinker on transformational change. This style of thinking has led to huge progress since the industrial revolution and has spread geographically, but John argues that we are seeing evidence that the industrial approach to organising and controlling a business is proving unable to cope with the scale, complexity and pace of modern business.

If you accept my model then unless we do something different and smarter the gap will keep growing. Just doing the same as we have previously done, no matter how well we execute it, is not enough. This is something that concerns many organisations and should concern those that it doesn't yet.

So what does it mean? Well it doesn't mean throwing all the best practices out, at least not until we have something better. What it does mean is equipping change professionals with skills that are more than structured planning, Powerpoint generation and list management. They need better business understanding, skillful judgement and an environment that empowers them to make the right calls at the right time. It needs a workplace that understands the uncertainty and adapts to it, embracing the "journey" and understanding that it is unlikely that it will ever arrive at its destination, yet can be very successful along the way.

It may well be time to re-negotiate the contract between BAU and Change, moving from Client/Supplier  to a place where Change is at worst a fully-fledged partner (risk and reward) and quite possibly a real leader, arguably with a seat at the top tables of business (that is if those tables still exist!). This is something of a game changer in my mind and will need some real leaders to achieve it.

Not everyone will be able to or want to make that journey, but it is one we should be thinking about as it is people led and will take time, as all human change does. We must consider who we hire and why - being prepared to challenge the current project/change manager model. We must look at how their skills are developed and deployed, using individuals as valuable assets rather than a commodity capability. And we must do it now.

I am sure there is a lot more to do and I hope I will find kindred spirits that can help shape this vision. It will take time to effect, but if we want to be in a better place in future, now is time to investment, mentally and emotionally.

Change is exciting and we should be able to change ourselves!!!

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