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On Shaking Things Up

No, it’s not just your imagination. The pace of change really is speeding up in organizations all over the world. At least, that’s the opinion of 82% of respondents to the 2006 Agility and Resilience Survey, a global poll of organizations commissioned by the American Management Association (AMA) and conducted by the Human Resource Institute (HRI).

It isn’t only the pace of change that’s increasing, either. Change itself is undergoing a transformation, becoming increasingly disruptive. About seven out of 10 of the 1,472 respondents said that their organizations had experienced disruptive change—that is, severe surprises or unanticipated shocks—over the previous 12 months. Although 29% said it amounted to only minor disruption and organizational impact, about 40% characterized such disruptions as affecting core operations, necessitating a major shift in strategy, challenging the overall vision and mission or even threatening long-term viability and existence.

When asked to compare disruptiveness in their organizations today with disruptiveness over the previous five years, about 37% said that their organizations had experienced more shocks and surprises, compared with only 19% who said there were fewer and less-frequent shocks and surprises.

It’s not likely to get any easier, either—at least not in the short term. That’s because some companies like it this way, and they’re often the ones setting the pace in their industries. The survey asked responding companies about their market share, profitability and competitiveness. The AMA/HRI analysis found that the higher-performing companies were more likely than their lower-performing counterparts to say that they see change “as an opportunity” and that they like to “shake things up.” They’re also more likely to anticipate and plan for change before it happens or actually induce change and force others to react.

In short, a significant proportion of organizations seem to gain a competitive advantage by ratcheting up the speed and even the disruptiveness of change. After all, what’s “disruptive” for one organization might seem perfectively manageable for another. It’s all about how agile and resilient the organization is.

It’s no surprise that the AMA/HRI survey found that higher performers tend to be both more agile and more resilient than lower performers. The survey defined agility as “the ability to move quickly, decisively and effectively in anticipating, initiating and taking advantage of change” and resiliency as “the ability to absorb, react to and even reinvent who you are as a consequence of change.” By increasing agility and resilience, companies are able to boost their ability to manage change—that is, what the change literature often calls “adaptive capacity.”

What does all of this mean in practice? For one thing, compared with their lower-performing counterparts, higher performers view themselves as having superior change abilities at the individual, team and organizational levels. At the individual level, for example, people in higher-performing organizations are seen as being better able to cope with pressure and stress, better at making sense of ambiguous and uncertain conditions and better able to “see the big picture,” taking a systems view of situations.

At the team level, a similar pattern emerges. Among high-performing organizations, teams tend to be more open to change, more likely to act as active learners and more effectively integrated into key decision-making processes. At the organizational level, higher performers are better than lower performers at actively and widely scanning for new information about what’s going on, quickly taking advantage of opportunities and expanding external alliances and partnerships.

Higher performers are also more likely to engage in certain practices that improve their responses to change. The most widely cited of these practices was training to improve managers’ change-management skills, followed by improved communication of organizational values/mission/vision, the establishment and development of talent pools and training that’s geared toward improving employees’ perception and handling of change.

The HRI/AMA survey also looked at what’s driving organizational change. It found that the most important drivers are related to the expectations of customers and vendors, new products and services and technological and process changes. This suggests that in fast-paced markets, there is no resting on laurels. There’s always a new customer demand, a new competitive product, another business-changing technology.

The AMA/HRI research team concluded that companies must be able to balance agility and resilience in this environment. That is, they not only need to move quickly to take advantage of change, but they also need to be able to “take a hit” when unexpected change occurs. Like great athletes, they have to anticipate well, be quick enough to make the play, be tough enough to take a blow and adjust to difficult circumstances.

The research team also concluded that businesses may have to adjust their priorities in coming years. In recent times, there’s been a great deal of focus on organizational agility. But if the business environment becomes increasingly disruptive, as some expect, then resilience will become an even higher priority than it is today. In an uncertain and sometimes dangerous world, companies that find just the right balance will develop a higher adaptive capacity than their competition.