Friday, August 16, 2019

It's Critical to Measure Your Organization's Capacity for Change

Change is difficult.  The default mode of most organizations is to resist change. There are many anecdotes in business that demonstrate this.  I remember many years ago when Blockbuster Video’s own board resisted change out of concern for short-term profits, which doomed it.

Businesses that can redirect energy to fast and positive transformation can exploit many more opportunities than enterprises mired in resistance.  The challenge for leaders is creating an organization that is not only prepared and willing to change, but that also has enough energy and resources to succeed.

One of the rules of the First Law of Thermodynamics is, "Energy can be changed from one form to another, but it cannot be created or destroyed.”  I propose there is an application of this rule in business.  If energy is being consumed on resisting changes to your business, then it is not available for making changes to your business.  When markets are rapidly changing due to economic conditions, business or technology innovations, changing customer behaviors or new forms of competition, companies must be able to quickly redirect energy focused on resisting to implementing positive change in order to win.

Change consumes energy, and energy is limited.  That means in order to make changes to keep up with a rapidly changing market, energy must be conserved and stock piled so it is available.  Expending scarce energy resisting intelligent change is a huge waste.  Making investments and taking your business down a path that cannot quickly be undone if the market moves a different direction is also a big waste.

We have focused so far on the notion of conserving and investing energy to facilitate intelligent change, but there are additional things that go along with energy that we must intelligently ration as well such as: time, budgets, credit limits, trust, skills, goodwill, leadership, mental and emotional capacity, etc.  Too much change can drain goodwill, and expend too much mental and emotional energy to continue.  The responsibility of a good leaders is to always be measuring how much energy is available to make changes.

In the days of old when battles were primarily fought by foot soldiers and horseman, military leaders were very tuned into the energy levels of both.  You can’t march your soldiers on short rations to the point of exhaustion and expect they will arrive at a battle ready to fight.  Intelligently managing energy levels are just as critical today.

Today, when every company is engaged in change in the form of digital transformation, enterprises need a method by which they can measure and monitor the amount of energy available.  Knowing how much energy is available requires a formula for calculating the number of energy units (EUs) currently in reserve, how many are being created over a specific period of time, less the number of energy units each project and tasks consumes in a particular time frame.  To that end, all aspects of a business should be assigned EU values so a total energy score (TES) can be derived.

All business activities consume and/or generates EUs.  As a result, the second step is to identify how many EUs each transformational task consumes. If digital transformation can be implemented with minimal resistance from the board, executive team, employees and customers, then those EUs can be dedicated to making the necessary changes.  However, if there is major resistance to change from any combination of these constituents, then there is less energy available for making it.

Once the number of available EUs is known, enterprises can monitor their total energy scores to ensure they maintain a sustainable level to implement current and future changes.

Higher total energy scores that are self-sustaining, support a higher level of business agility, while lower scores limit a company’s ability to make changes fast enough to compete.

In a world in permanent flux, enterprises with higher total energy scores have a competitive advantage in the form of business agility and energy to use for digital transformation efforts.  As real-time data is analyzed, and changes in trends detected, businesses with higher total energy scores are in a far better position to exploit emerging trends.

Kevin Benedict
SVP Solutions Strategy at Regalix
Website Regalix Inc.
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***Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I work with and have worked with many of the companies mentioned in my articles.