Monday, May 7, 2012

Harnessing the Power of Change

If you plot the pace of societal and technological change over the course of human history, you see a generally linear pattern of growth over centuries until you reach the post-World War II era. Then suddenly the curve lurches upward, displaying an exponential rate of growth. And futurists project that the rate of change will only increase in the years to come.

In the business world, the rate of change accelerated substantially with the advent of the current recession. Many of the changes that the financial crisis wrought will likely be with us for a long time, if not permanently. This is what is popularly called the "new normal." It comes on the heals of what was the heyday of A/E industry, characterized by record growth in revenue, backlog, and profit.

Hard to believe it passed so quickly, isn't it? But we can no longer afford to reminisce. While most firms seem to be enjoying a modest rebound, don't expect a return to business as usual. If you agree, that begs the question: What is your firm doing differently now? Are you simply adapting to the marketplace changes, or harnessing their power to help you transform your business?

As I've written before, times like these present ripe conditions for corporate change. Firm executives face an unavoidable choice: Lead change or follow change. The vast majority of A/E firms have long followed others' innovations and adaptations. They could get away with it in the past because being slow to change didn't put their firm all that far behind the leaders.

That will no longer be the case. The financial crisis has weakened many firms, allowing the stronger ones to increase their advantage. With slow industry growth, those firms that can take market share will prevail over the majority that are merely eking out an incremental increase on pace with the marketplace. The best firms will leverage the crisis to remodel their business practices and reduce the inefficiencies that plague our industry.

Will your firm be among them? This post launches a series on leading change, a perennially important subject that has now become essential. Few firms are prepared for the changes that may be necessary even to just keep pace. Hopefully this series can help. 

Change vs. Transition 

Let me start by clarifying a vital distinction when it comes to this matter--the difference between change and transition. Companies make lots of seemingly wise changes that don't succeed because they fail to adequately manage the transition. 

For example, your firm may introduce a new business development process. The change is generally well received--in concept. But people find it more difficult in practice. They're uncomfortable and inconvenienced with doing things differently. They work at the new process for a while, but ultimately retreat to old habits. They can't make the transition to the change.

Changes are always easier to make than transitions. So when you hear the term "change management," what is really being referred to is management of the transition, the human dynamic of change. And to be precise, it's really not a matter of management, but of leadership.

Change is situational; transition is psychological. Change is external; transition is internal. Change is an event; transition is an experience. Change can happen quickly. Transitions almost always take time. Corporate changes rarely meet expectations without a successful transition. In fact, about 70% of corporate change efforts fall short. You can bet they fail in the transition phase. That's where leadership is needed.

Effective leaders guide people through the difficult process of transition. Indeed, successful transition is a byproduct of leadership, because leadership is about creating positive change. Is there a more important topic in our business these days? I think not. As evidence, consider that a post I wrote in 2009 on the four stages of organizational change continues to be my most popular post--almost each and every month!

So in the next few months, I'll be digging deeper into the topic, outlining several strategies for helping people transition through corporate changes. If you have particular issues related to this topic that you'd like for me to address, let me know.

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