How to Address True Business Model Change

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How to Address True Business Model Change

 

As someone who spends the majority of his time working with C-suites and other senior executives at many of the largest companies in the world, I am fortunate to have insight into a myriad of complex situations. And, in all cases, finding the solution to those challenges involves orchestrating all of the right people from in and around the challenge, bringing them together for intensive, focused conversation and candid and productive debate so that, ultimately, there is genuine, integrative and emergent co-creation of solutions that can then be executed.

As an orchestrator of these organizational turning points, a neutral and honest broker, and a process (not a content) expert in the proceedings, I am exposed to insights that transcend companies and industries, and cross challenge types, contexts, cultures and geographies. I get to see patterns that exist wherever systems and complexities collide.

Sometimes, the challenge is growth, or fending off a new competitive threat. Sometimes it’s about turning around a brand, or revitalizing an antiquated talent strategy. Sometimes, the challenge is business model transformation; I’ll talk here about the patterns I’ve seen in this latter example.

You can imagine, first of all, and have probably experienced, just how unsettling and uncomfortable it is to make real change to the fundamental model that an existing organization has known, possibly from the beginning but, certainly, for years and years.

For human beings, this would be analogous to experiencing major changes in one’s life, such as getting married, or having your first child, or undergoing a significant change in health or career. From what I’ve seen, in fact, the analogy that best fits is probably “all of the above and all at once.”

In a few rare situations we’ve encountered, the need for business model change is patently obvious to everyone who needs to be part of the change: “We’ll be out of business in two years.” “We’re getting our asses kicked every day and the shareholders are up in arms.” “We are very rapidly becoming irrelevant.” Those are the easy situations when it comes to mobilizing people for action. Even if it isn’t clear to everyone exactly what to do about it, a crisis tends to get people moving.

But in many (most) situations we’re involved in, the need for change is in question; some see it clearly, others patently don’t. And therein lies the biggest hurdle: generally, people don’t want to change. They know what’s known. They’re good at what they’re good at. There is safety in routine. The easiest “out” is to deny the need for change, to refuse to see it, to argue for the status quo, to quietly resist and/or subversively undermine the agents for change.

Our particular platform for business orchestration starts by assuming that people, generally, aren’t ready for the change ahead, and they likely don’t feel the urgency that a few might. That’s a pretty safe assumption. The complex nature of the organization, its changing environment, its even more rapidly changing customers and stakeholders, its breadth, its depth, its history and its emerging future—all of that has got to be understood (or at least glimpsed) as a whole bunch of letters on the wall, before people can read the writing.

No one person or small group possesses all of these “letters” in isolation. Not senior leadership. Not the employees in the field. Not the “ivory tower” head-office folks. Not the customers. Not the partners. And certainly not the outside subject-matter-expert consultants. It is only from among the “right people,” collectively, that all the stimulus, knowledge, data points, experiences, and so on, can be found. And it is only with all of them in the room that there can possibly be the wherewithal to make sense of it.

A few change agents can skip to the end of the book and draw very good conclusions, but the vast majority of people need to get there through their own individual process of discovery. Our orchestration platform takes “all the right people”—individually and collectively—through that process of discovery, so that everybody, all at once, can feel the weight of inertia, see the consequences of inaction, and feel the compulsion for change.

Then and only then are they ready to start talking about what needs to be done.

I’m not talking about any particular organization we’ve encountered, or even a few. This is a pattern that applies to nearly all of them. We are brought in to do our thing by the senior-most executives who know something needs to be done. Sometimes, they believe they know what needs to be done, and they may also believe they’ve convinced the key people around them. (That’s occasionally true, but usually those key people also have their doubts.) “The challenge,” these executives tell us, “is helping us execute our change agenda.”

Not so fast.

If the so-called change agenda was not created by all the key people, then they don’t own it and won’t drive it. They’ll play along, until it gets too hard. When the change agenda was built by an outsider—even a smart and capable top-tier consultant who may well have gotten it completely right—it’s no different: I don’t own it; I won’t do it. Change is hard; change that I don’t believe in doesn’t happen.

So what am I saying? Halfway through this post about business model change, I haven’t said a word about business models. That’s because the business models and the specific changes—from a geography-based to an account-based model, from traditional software to software-as-a-service, from fee-for-service to value-based care, from regionally aligned to product-aligned to customer-segment-aligned and back again—those are details that get lost in the patterns. But what emerges as the dominant and consistent underlying truth is about people and change.

People will not want it unless they’re convinced it’s necessary. They won’t be convinced by somebody (anybody) else telling them. And they won’t see it themselves until they can’t help but see it. The writing must be clearly and undeniably staring them in the face. And even then, you can lead a person to the writing on the wall, but you can’t make them read it.

It takes time and effort to get people there, but far more time and effort when you don’t. People need to be part of a groundswell, a movement, with others they respect and trust. They need to share with each other and learn from each other before they can collectively feel the compulsion—and the will—to change. Some won’t be up for it, and those people need to see that for themselves too, so they can step aside.

None of this happens by accident. It is not a natural inclination to disrupt the routine, shuck the comfort zone for discomfort, and step happily into the abyss. It is only after people are convinced there is no other choice but to change, that they will do so. It starts with clarity on the “why,” and only then can you turn your attention to the “what.”

All levels of leadership. All geographies. Front-line people, head office people, and everyone in between. I’ve seen it time and again. Thinking, reasoning adults don’t just do what they’re told. They don’t look at a new business model and say “Cool! Let’s change everything I know because that new thing is really neat and my boss says it’s right!” But they will put their shoulder to the proverbial wheel when they, themselves, know they must.

Margaret Mead said: “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.” A thoughtful and committed group of people doesn’t come together by accident and, while changing a business model is easier than changing the world, thought and commitment is no less important.

I believe, because I’ve seen it time and again, that only through a rigorous process of orchestration can people convince each other to commit to the change ahead. And only then are they ready to chart that course.