The Appetite for Change

Many firms claim to be eager to make changes that will improve their performance, or at least claim to be open to the changes that are necessary - but in truth, the only thing that has the power to overcome the inertia of tradition is the stark realization that the current practices are not sustainable.

This is one of the reasons that different silos within a business seem to have different levels of desire or willingness to change.  Typically, the closer an employee or business unit is to a stakeholder, the sooner they realize the need for change because they recognize a growing dissatisfaction in those with whom they have constant contact.

Departments such as sales and service are the closest to the customer, and interact with them daily.  As a result, they receive constant feedback and are highly attuned to the needs of the customer.  Salesmen find it harder to close deals and customer service representatives get more complaints, both because their firm has been slower than its competitors in meeting customers' demands and expectations.

Meanwhile, departments such as finance, human resources, and information technology are well insulated from the customer.  They have no direct contact, receive no feedback.  As a result, they feel no urgency in making or supporting changes that are necessary to continue to deliver what is required by their stakeholders and are prone to cling to the comfortable routines of business as usual.   They simply do not recognize the threat because they are too distant from the alarm.

It seems particularly ironic that information technology should fall into this category - but while technology is rapidly changing, those who manage technology are far removed from the front lines: they have no contact with customers, and often regard front-line employees with some degree of indifference, as the most unreliable component of a system that they feel the need to control.  They also have made significant investment in the current systems and tend to defend their past choices.  Extremely few have a service orientation, and are focused on the technical rather than the human elements.

Back on point: the need for change ripples through an organization: the sales department recognizes a deficiency in products that is causing customers to choose other providers.  They must communicate this back to the manufacturing department to request product changes.   Manufacturing must support the change and engage engineering to make the necessary changes to the production process and human resources to bring aboard the necessary skills.  All must then contact finance in order to get budget allocated to change the operation.

At each step along this chain, there is reluctance, which is institutionalized in bureaucracy: there is a process to request a change, a process by which the change is evaluated, and a process by which a change is approved.   All of these are designed to make it difficult to deviate from business as usual, forcing any new idea to prove its worth against an existing method that is backed by historical data and the implicit assumption that the future will be no different from the past.   The larger the organization, the more elaborate and numerous are the processes by which any request to change is discouraged and slowed.

These procedures hail from an era in which environmental factors (customers, employees, vendors, competitors, markets, and technology) tended to change more slowly - and companies could take months or years to slowly tend to the process of making changes.  In the present day, the time to make all the arguments, secure all permissions, and go through a chain of processes to institute a change is limited, and obsolescence sets in quickly.