Preparing Teams to Lead Innovative Change
A new model of
organisational change for today’s fast-moving industries.
The auto industry may
be in for a double upending in the near future. First, the tipping point for
self-driving cars is expected to occur between 2020 and 2026, according to experts’
estimates. Second, the rise of ride-sharing (otherwise known as “Uberisation”)
poses a potentially fatal threat to the prevailing business model. Looking
ahead to the next decade, it’s impossible to predict the future of cars, let
alone that of an industry based around putting a car in every driveway.
Automakers aren’t
alone in confronting blinding, multileveled change. Before the iPhone, few
anticipated that smartphones would essentially reshape the field of consumer
electronics. Now, innovation is coming so rapidly that one in two consumers
believes the smartphone itself will be obsolete by 2020.
The state of play in
today’s most innovative, dynamic industries requires organisations to think and
adapt in new ways. The familiar paradigm of strategic change—wherein senior
leaders dream up the vision and see it through to completion—is out of place in
a world where no one, in or out of the C-suite, knows what the future holds. To
remain innovative, strategic change itself needs to evolve from a top-down,
linear process to a more democratised, open-ended process. The primary staging
ground should shift from the organisation as a whole to its constituent teams.
In a paper (co-authored by my INSEAD colleague Quy Huy), presented at the most
recent Academy of Management Annual
Meeting, we explore a new model of strategic change and attempt to answer
some of the questions it raises.
Orchestrating change
Our inter-team model
would remove the pressure on top leaders to be industry prophets. Instead, the
task of determining the organisation’s future direction can be divided among
frontline teams, each with its own area of expertise. Pooling the fruits of
their parallel experiments, teams can develop collective knowledge resources
that can be converted—with support from senior leadership—into innovative
organisational routines. The cycle can be repeated any number of times. When
innovative capacities start to run dry, they can be regenerated at the
intersections of team activity.
Of course, without
some form of discipline the whole system would be in danger of collapsing into
chaos. We use the analogy of a symphony orchestra: The various sections and
sub-sections of an orchestra each play different music, yet the conductor’s
baton unites them. In our model, the “conductor” is the top team, whose role
would include (among other functions): fostering a safe, empowering context for
the frontline teams’ experimentation, aiding horizontal coordination, setting
behavioural norms, and guiding selection and implementation of appropriate
strategic options.
Our orchestra analogy
isn’t perfect. There is no sheet music—i.e. no predetermined plan—for the teams
in our model. In this sense, they would be more like a well-rehearsed and
experienced jazz combo, composing the piece in collaboration as they play it.
Their improvisations, however, receive structure and shape largely from
guardrails set down by senior leaders. It falls to the top teams to maintain
harmony between team experimentation and overarching strategic goals.
Our model allows
teams to assume task-appropriate roles at different points, instead of being
made to march in organisational lockstep. They can even take a break—just as
sections in an orchestra will “rest” as the music requires—while the work goes
on around them. Teams need periods of slowdown and stillness to cope with a
potentially exhausting environment of continual change.
Three critical
functions
Preparing teams to
initiate strategic change will usually require strategic investments on the
part of companies. We isolate three areas of critical importance towards which
companies should consider directing time and resources.
1) Discovering –
Teams focusing on this function prioritise and excel at what we call “scouting”
tasks. In other words, they are silo-busters. By learning more about their
wider terrain, they ensure the experimental process remains relevant to the
real-world context. Before experimentation begins, a main concern for leaders
will be whether team members are diverse enough in their abilities and
approaches to tackle the task environment. Where knowledge is lacking within
the team, leaders will set up cross-team collaborations to compensate.
Top teams can help
the frontlines perform these tasks better by fostering a holistic
mindset—creating conduits for intra-organisational collaboration and providing
frontline team leaders with a broader strategic orientation.
2) Deliberating –
This function corresponds to an “ambassador” role in which politics (an
organisational inevitability) comes to the fore. Once experimental results are
in, teams will compete with one another to win scarce resources. In essence,
this is a political process wherein actors proffer contrasting change visions
in hopes of swaying higher-ups. In making their case, teams should be
sophisticated about the motivations—both overt and hidden—of all players
concerned. Eventually, visions that fail to win widespread support will fade
from consideration, while those that remain will come to inform the new
strategic direction.
Top teams should be
ready to ask pointed questions of frontline teams, in order to assess the
relevance of proposals to the overall strategy. Also, senior leaders can alert
frontline teams to political pitfalls (such as pockets of elite resistance)
they may be unaware of, or unprepared for.
3) Embedding –
This function requires a “task coordinator” role whose purpose is to translate
new strategic directions into manageable, sustainable routines. At the
grassroots, it will take many forms: coordinating with various stakeholders to
address their concerns about the change; collecting evidence to reinforce the
legitimacy of the new direction; and conveying timely information both from and
to higher-ups (to name a few).
Senior leaders will
be under the microscope during the embedding phase. While being careful to keep
words and actions consistent, top teams should tailor their communication
strategies to the demands of the moment. When they don’t have the luxury of
time to elucidate an original or complex change narrative, simplicity will do.
For example, former IBM CEO Lou Gerstner eschewed all embellishment as he began
framing his change vision, encapsulating everything in the simple value of
customer service that fueled the company’s initial success.
The three functions
above are not entirely unique to our model. They are similar to components of
past theories of organisational change. Our model differs in transferring them
from a context where the three are performed in linear sequence to a
(team-based) context where they are performed simultaneously by different work
units, each at its own task-appropriate pace.
Putting it into
practice
The chief
beneficiaries of our model would be incumbents experiencing fast-moving,
existential change in their operative environment, e.g. automakers such as
Daimler or Toyota. Organisations with a clearer notion of what the future holds
are better able to execute strategic change using the familiar, top-down
structure. As fast-moving market and tech trends capture more and more
industries, we predict that our team-based schema will become increasingly
pertinent.
A good starting point for
implementation is to experiment, e.g. as part of a leadership development
programme. Split into “frontline teams” reporting to the top team, participants
could be asked to devise possible solutions to a strategy-related problem
facing either the organisation or the industry as a whole. The inter-team
competitive element could be either downplayed or accentuated, depending on
organisational culture and demands.
Henrik Bresman, INSEAD Associate Professor of Organisational Behaviour | October 11, 2017
Read more at
https://knowledge.insead.edu/leadership-organisations/preparing-teams-to-lead-innovative-change-7391?utm_source=INSEAD+Knowledge&utm_campaign=bbc918ab98-EMAIL_CAMPAIGN_2017_10_26&utm_medium=email&utm_term=0_e079141ebb-bbc918ab98-249840429#5KElI30YKH7lAxkJ.99
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