Insights

The Challenge of Staying Competitive in Turbulent Times

In a 2003 HBR article titled “The Quest for Resilience,” business writers Gary Hamel and Liisa Välikangas observed that: “Every business is successful until it’s not. What’s amazing is how often top management is surprised when ‘not’ happens.”

The issue could be described as ‘the problem with success’. Successful organisations create structures, and ‘ways of doing things’, or ‘cultures’ to help them become more and more efficient in delivering their competitive advantage. They sustain their advantage through being good at delivering a product or service that is valued by their customers.

As the environment becomes more volatile, complex and uncertain however, the things they do well may become misaligned with changing market realities. Kodak, Motorola and Blackberry are obvious examples. While the business may still be good at what it does, ‘doing what it does, well’ is no longer equal to the challenge of sustaining performance.

Responding to the challenge typically calls for ‘thinking differently’: qualities such as innovation, strategic agility and creative problem solving. Herein lies the real challenge: the intimate connection between strategy and the ‘human factor’: organisational behaviour, interpersonal dynamics and group/individual psychology.

A ‘golden rule’ of strategy is that structure follows strategy, not the other way around. And structure is one of the elements that produces an operating culture. But when the strategy changes, it is often difficult to implement, because today’s structure and culture are the products of ‘yesterday’s strategy’.

The challenge is made worse by the fact that people in today’s structure often try to protect the status, power, authority and influence associated with their role in it. Anything that changes that for the worse becomes the source of what is so often described as ‘change resistance’.

These emotional aspects of human behavior are often quite immune to rational arguments for change. To put it in simple terms: what people know, believe and feel about how things work today can end up obstructing efforts to ‘get new thinking to work’ and bring about constructive, generative change.

Any change creates tension and conflict – between yesterday’s way of doing things and the new direction; between different opinions about what the problem is; and between different beliefs about what the solution should be and who should play what role in delivering it.

These tensions are often seen as resistance, and lead to increased focus on ‘persuasion’ – usually via town hall sessions, design workshops and communications programmes to present arguments for the change, or get people to address the implications of the change.

Conflict and resistance are, however, different things. Both arise from different interests – and these are present in any organisation. The bigger the organisation and the longer it has been doing things the way it currently does it, the more likely it is that different interests will be present. But resistance tends to be one-sided: the refusal of one party to act in a way that another party wants. Conflict more often has both (or all) parties pulling in different directions until a decision is imposed, usually from the top. Of course, once a decision is imposed, resistance may arise.

When things change, the differences between interest groups can be inflamed. People start seeing the interests of one part of the organisation (often the leadership) as being served at the expense of others; or suspect the motivations of one part of the organisation as being a play for power or authority in relation to the new direction and structure.

However, conflict and tension can also be important sources of creative problem solving. Getting parties with conflicted views around a table to constructively address the issue can lead not only to the issue being resolved (often with a creative, innovative solution); it also often leads to higher levels of commitment from the parties involved: to a solution they have had a hand in creating.

The process of resolution itself can usefully highlight where there are misalignments in knowledge, beliefs and feelings that can then inform communications programs and other interventions, to move beyond persuasion to engagement – and deliver better outcomes as a result.

CONTACT US

The Human Factor LtdT: +852 6403 9088E: graham@thehumanfactor.net
8C World Trust Tower,
50 Stanley Street,
Central, Hong Kong