The Uncertainty Phase—Time to Shift or…
So far in this series, we’ve explored the meaning of the term “paradigm shift,” and we’ve looked at the first two phases of an organizational paradigm evolution. Now it’s time for us to look at how the actual shift happens, to uncover why the existing paradigm begins to decay.
It’s upsetting to realize that a critical issue (current or anticipated problem or opportunity) cannot be adequately addressed by the existing paradigm and its multitude of fixes. Such a crisis is usually precipitated by a combination of two circumstances:
- the environment that the initial paradigm was designed to serve has shifted, and
- the patchwork of overlapping fixes that has evolved has sapped its strength to the point that it cannot adequately meet the challenge being faced.
In Stephen Elop’s now-famous “burning platform” memo, the Nokia chairman outlines exactly what has put the organization in crisis: Apple’s powerful ecosystem, Android’s platform, MediaTek’s low-end price range, Chinese OEMs. Nokia has fallen behind, missed big trends, and lost time. They now find themselves years behind the competition. (More on Nokia in subsequent posts.)
The key thing to understand is that a crisis is not responsive to more fixes and, left unresolved, will result in a significant loss of productivity, quality, and safety.
The Decay Begins
When an organization’s response to a crisis results in the preservation of existing mindsets and behaviors, productivity, quality, and safety take a nosedive. It occurs when corrective measures, primarily directed toward methods, systems, and behaviors (fixes), are continued even though they have become ineffective. In a word, the situation stinks.
During decay, organizations spend increasing amounts of time and other resources:
- denying the decline in productivity and quality,
- explaining why the decline was inescapable,
- avoiding the ongoing nature of the decline and treating the situation as a short-term aberration,
- dodging the accountability, responsibility, or consequences that may result,
- protecting the existing methods, systems, and behaviors, and
- defending the continuation of ineffective, short-term “fixes.”
This can go on for an extended amount of time. People in these organizations have succumbed to the pressure that exists within all successful companies to protect the present means of operation instead of staying focused on the company’s primary purpose. The outcome of all this is a lethal combination of unyielding methods, rigid systems, inflexible behaviors, unchallenged mindsets and unquestioned assumptions.
Deep in the Shift—The Collapse/Renewal Phase
In this series, we’ve been talking about organizational paradigm shifts and how they evolve. When a crisis develops, companies tend to protect the present means of operation instead of staying focused on the company’s primary purpose. The outcome of all this is a lethal combination:
- Unyielding methods
- Rigid systems
- Inflexible behaviors
- Unchallenged mindsets
This results in a significant loss of productivity, quality, and safety.
The Grass Is Greener on the Other Side of the Shift
An organization’s response to a crisis can result in the reshaping of its fundamental mindsets to significantly enhance productivity and quality. First, the organization must admit that the “fixes” that worked in the past are no longer an effective way to resolve critical business challenges. Second, leaders have to do some serious evaluation:
- What does our current market really look like?
- What are the core mindsets needed to succeed in that market?
- Is the current market even the one we should focus on?
Organizational renewal results from examining and dramatically altering each key component in the existing paradigm. It begins with the difficult task of recognizing previously unquestioned mindsets that have served as the foundation for prior decisions and actions. From modified or altogether new assumptions, fresh implications are generated for what is believed to be true, relevant, and so forth. From these frames of reference, priorities emerge and specific behaviors are identified that can best manifest the intent of these beliefs.
As this effort unfolds, certain clusters of mindsets and behaviors are modified or altogether new systems are designed to accomplish specific outcomes (e.g., hiring people, processing and using information, etc.). Finally, these systems will demand new methods (rules, tools, etc.) necessary for their operation.
Renewal is the building of a new organizational paradigm from the ground up. The result may be a new paradigm that includes aspects of the old one, renders the old one completely obsolete, or reduces it to limited applicability. The key is that whatever the new one includes, it is built with little dependency on the previous one…it represents embarking on a new era.
I mentioned Nokia’s burning platform memo in my last post. Stephen Elop, Nokia’s chairman, understands exactly what must be done to spur renewal, and he outlined it at a strategy meeting in February. It included a bold new strategic plan and “a new leadership team and organizational structure with a clear focus on speed, results, and accountability.”
Composing new paradigms calls for replication of the sequence that generated success for the old one: mindsets ► behaviors ► systems ► methods. The difference is, instead of relying on trial and error, intuition, and luck (as is often true during the evolution of the initial paradigm), the new paradigm is created by intentionally challenging what has worked in the past and deliberately building a fundamentally different alternative.
Next: How to make shift happen