Some Key Challenges Facing Organisations
Introduction
Increasing research around the science of organisational change (include neuroscience, organisational studies, business history, leadership, etc.) is showing how best to handle the VUCA world, ie volatile/vulnerable, uncertainty/unknown, complicated/complexity, ambiguous/alternatives (for more detail, see elsewhere in the Knowledge Base). This research is showing that both organisations and people need to be faster, more agile, flexible, adaptive, adoptive, creative, etc to handle VUCA.
Everybody needs a better understanding of the:
- core components of human nature
- limitations of the modern organisational designs
- the current leadership frameworks (more than management).
For example, the idea of leadership is expanding beyond senior management to all organisational levels, eg informal leaders (for more detail, see elsewhere in the knowledge base.)
Some Key Challenges
- increasing pace of change (including disruptive change, especially around technology; incremental improvement is inadequate in the Information Age, eg
"...The total number of patents granted by the United States......doubled from 1960 to 1990. Then the number of patents quadrupled in the last three decades......a 2018 IBM study estimated that 90% of all data on the Internet was produced in the preceding two years..."
John Kotter et al, 2021)
- most organisations and people (minds) are not designed to handle change; most organisations are built on
"...stability, efficiency, reliability, quick-threat elimination and most of all, short-term survival..."
John Kotter et al, 2021
As organisations mature, there is a trend to move away from innovation and lean towards stability and short-term safety.
Human brains are not hardwired, or do not evolve quickly enough, to handle the latest technological developments, etc.
- growing gap between the external environment and the ability for organisations and humans to handle this gap (this can be seen both as a danger and an opportunity; need to be equipped to
"...see the relevant external change quickly, invent or adapt responses with speed, and get results that are hard for even their own people to imagine..."
John Kotter et al, 2021
Need to close the gap between internal and external realities.
"...risk mitigation means getting on with it and not missing opportunities. In today's world, not adapting fast enough is the greatest risk..."
John Kotter et al, 2021)
- some of the changes will have significant impact on the lives of people everywhere (change impacts everybody and everything, ie nothing is immune from it; increases social upheavals/unrest, connectivity, etc)
- getting the balance right between surviving and thriving responses (the surviving response is to handle threats while thriving involves handling opportunities; some managers regard the thriving response as
"...only creates chaos, conflict, or distraction from getting their daily routine jobs done well......they are inclined to wonder if the idea is theory and impractical, or only suited to some limited situations..."
John Kotter et al, 2021
In summary
In addition to macro-threats like climate change, food security, military aggression, etc, there are threats for organisations associated with low-cost competitors or opportunities for growth from innovative products or acquisitions.
"...long term change trends have reached a point where the era of classic business and government may be over..."
John Kotter et al, 2021
Some examples include Kodak, Blockbuster, Borders, etc - they once dominated the industry are now in the corporate cemetery.
NB
"...there is no magical sauce or possible-to-replicate situation......people can be guided, facilitated, educated, and motivated to adopt new ways of thinking and working, to actually change their actions, resulting in sometimes astonishing business or mission impacts..."
John Kotter et al, 2021
Some organisations do amazing things to successfully change direction.
"...the vast majority of the time, people who successfully help deal better with change benefit greatly themselves. They not only do better in their careers but they feel better about life. They not only receive material rewards; they gain esteem. They not only survive: they truly thrive. And they leave legacies of which they are deeply proud..."
John Kotter et al, 2021