In the “old days,” change management was essentially about destabilizing things—creating a “burning platform.” This was followed by implementing the change and then stabilizing the new state, also known as the simple model: Unfreeze – Change – Refreeze. This approach often worked reasonably well, as changes were not a routine occurrence but rather a “project” that organizations had to address from time to time.
Today, change management has changed significantly. It now focuses on transforming leaders rather than merely managing changes.
Outdated Model for Change Management?
But does that model work in today’s turbulent and ever-changing world, where all businesses and organizations—whether we like it or not—are subjected to continuous change? And where it’s not just about individual change projects? Or has change leadership taken on a new face? We asked INSEAD Professor Spencer Harrison for his insights.
“Most change management models are probably 20 years old, yet we still use the same terms and language. Today, change is not a one-time event but a process that never stops. Change is fluid. Therefore, it’s no longer about ‘managing change,’ but about ‘transforming leaders.’ Changes and transformations are constant factors that you, as a leader, must be able to handle,” explains Spencer Harrison, Professor at INSEAD, and continues:
“Today, changes also mean that a culture cannot simply be moved from point A to point B. Instead, you must work to continuously shift the culture in the desired direction. Many might still be nervous about constant changes, but fortunately, today there are many more ways to gather data and information that support a culture of change. This can include surveys that can be completed on a smartphone, internal social media systems, and general monitoring of hashtags on social media.”
Data-Smart People Reader
Two of the most significant factors that Harrison highlights when comparing past and present changes are the speed of these changes and the expectation that employees may not stay with organizations for long. At the very least, you should anticipate that they will leave if changes are not implemented. This means that a company’s leader must possess specific and crucial skills.
“Leaders need to be very ‘data-smart.’ This means they must be able to understand and interpret all the available data and act on it effectively. At the same time, all this data and information can make things more impersonal. Therefore, it is crucial for leaders to maintain personal contact with their employees. One of the most important skills for leaders is to have meaningful conversations with their staff, to understand where they ‘are’ and how they feel,” Harrison emphasizes.
In one of Scandinavian Executive Institute’s newer programs, the Strategic Execution Program Leading Strategic Change INSEAD, Spencer Harrison is one of two instructors. The program provides insights into both the hard and soft aspects of strategy execution, with change management particularly addressing the “soft” aspects.
“Everyone can have good ideas about a company’s choice of strategies, but what is truly challenging is executing those strategies and ensuring that the people in the organization make the changes happen and integrate them into the culture. In the Leading Strategic Change program, participants are presented with a series of ‘magic tricks’ that enable them to effectively manage the human and cultural aspects of the execution processes,” concludes the INSEAD professor.
Learn more about the leadership program, Leading Strategic Change INSEAD.
Recipe for Change Management
A number of scholars have explored change management over time. One of the field’s “grand old men” is John Kotter, who has written the book Acceleration – Strategic Agility in a Changing World. In the book, Kotter provides a recipe for how even large, traditional organizations can survive in a world full of unpredictable events and exponentially increasing changes.
Many organizations and companies struggle to keep up with the rapidly accelerating changes. The cautionary tales of those who were overtaken by unforeseen innovations are legendary. Just think of Kodak, which failed to recognize that photos didn’t need to be on film, the postal service, which is running out of letters, or the struggling newspaper industry, which is still desperately searching for a viable business model online.
Tear down the old, rigid organizations! Break up the hierarchies, or start completely from scratch, are the most radical pieces of advice from John Kotter. In his book, he suggests implementing a dual management system, which will actually be familiar to most. This is because it was once a natural part of the organization itself.
The Dual Management System
When it comes to change management and organizational structure in the modern, ever-changing world, Kotter has developed a framework he calls the “Dual Management System.” According to Kotter, this system enables even large, traditional companies to accelerate. The method, as the Harvard professor describes, is both cost-effective and practical. As Kotter writes: “The solution is not to dismantle what we know and start from scratch, but rather to organically reintroduce another system that will be familiar to most successful entrepreneurs. The new system provides the necessary agility and speed, while the old system continues to offer reliability and efficiency.”
Organizations that want to keep pace with the accelerating changes in their environment can benefit from what Kotter calls “back to the future.” This movement, in short, involves reviving the network-like structure that most organizations operated with before they grew larger. Network structures, unless one is very unconventional, tend to evolve over time into traditionally structured hierarchies with management, budgets, measurements, clearly defined tasks, and positions, etc.
In summary, Kotter’s management system is based on the following five fundamental principles:
- Many are Drivers of Important Changes: This means that tasks should be accomplished within the organization and through collaboration. As Kotter writes, 200 external consultants, no matter how intelligent or dynamic, cannot solve the task.
- A “Get to” Mindset Rather Than a “Have to” Mindset: This means that leaders take on the role of identifying change agents (who are usually already within the organization) and allowing them the opportunity to shine, step forward, and act. As a leader, there is no need to search for a new team.
- Action Driven by Head and Heart, Not Just Head: This means being able to appeal to people’s emotions and their desire to contribute. It involves providing more substance and purpose.
- Much More Leadership, Not Just More Management: This involves leadership characterized by vision, opportunities, agility, engagement, innovation, and celebration. It’s about providing inspiration and direction, not just managing routine tasks (which is also part of the role).
- An Inseparable Partnership Between Hierarchy and Network, Not Just a Strengthened Hierarchy: This means that the two systems do not merely operate side by side but function as a single entity. There is a continuous flow of mutual activities and exchange of information between them.
Change Management and Strategy
However, acceleration requires that as a leader and steward of the company’s strategy, you must accept that there are limits to what management-driven hierarchies can achieve. It is crucial to acknowledge that many people rightfully feel frustrated with organizations’ sluggishness and tendency to allow the same (self-satisfied) employees and leaders to continue with “business as usual.”
Kotter proposes a new direction, which he calls the Dual Management System. The system has roots in familiar structures and approaches but is practically organized as an agile, fast, and creative network structure.
Dynamics and Creativity
In the Dual Management System, hierarchy operates alongside network structures. The network side mimics successful organizations in their early stages—before organizational charts, command hierarchies, and status symbols took over. Key aspects include dynamics, shifting forms, and a level of individualism, creativity, and innovation that even the most streamlined hierarchy cannot guarantee.
The network should consist of a broad cross-section of employees from across the organization, at various levels, and address many of the challenges that traditional organizations sometimes struggle with. These challenges include innovation, difficult changes, and large strategic initiatives.
The management system requires leadership
Kotter acknowledges that the Dual Management System challenges the traditional organizational structure and what he refers to as “systematic” management. This duality demands a more mobilizing leadership, which does not come easily to all leaders. However, when the new system is effective, the traditional hierarchy is less burdened. It can then focus more on routine operations and predictable strategic initiatives (such as IT system upgrades), while the network operates dynamically alongside it. When successful, the two systems naturally intertwine, populated by people who move within and between them.
It requires leadership, particularly from top management, to keep the network component active, support it, and ensure that the network and hierarchy work in harmony. This involves continuous mutual exchange and coordination between the two systems.
Does it work? Yes, Kotter affirms, providing examples in his book of companies and organizations that effectively integrate these approaches. However, it requires leaders and management who are willing and daring enough to explore new paths.
