In the original post, A Formula for Change, we referenced Dannemiller’s formula (D x V x F x CL > R) that dictates that the product of Dissatisfaction, Vision, First steps and Creative Leadership must be greater than Resistance, for change to occur. Over the next few articles, we’ll focus on the components of that formula, finding ways to increase the left side while simultaneously decreasing the right.
When Dissatisfaction is a Good Thing
To lead an organization through change, you must first begin by admitting there is a need for change. Ironically, one of the biggest obstacles to recognizing the need to change is a success. A successful organization can very easily become complacent. Patterns of behavior and thought become codified and the organization, focusing on its success, becomes unable to accept new ideas or develop new insights.
The inevitable decline in performance, denial that it’s happening, and search for blame can shift focus further from customer input and exacerbate the cycle. We have only to look at the lessons of Kodak, Blockbuster, Sears, and others. Of the companies listed on the Fortune 500 in 1955, only 10% are still there. At the current turnover rate, about half of today’s S&P 500 firms will be replaced throughout the next 10 years.
In 2001, Ray Kurzweil, futurist and Chief Engineer at Google, published his “Law of Accelerating Returns” and predicted that as the current exponential rate of change continues to accelerate and compound, the 21st century will see almost a thousand times greater technological change than the one before. Considering that the advances made in the 1900s include widespread electrical power, automobiles, radar, television, air travel, nuclear energy, satellites, computers, CAD/CAM, the Internet, cell phones, 3D printing, the thought of 1000x that sort of progress is staggering.
Globalization, technological advancements, changing regulations, and geopolitical uncertainty are requiring that companies examine and reexamine not just their current product offerings and manufacturing processes – but the competitive landscape as well. Technological advances are allowing companies to cross industries more quickly and enabling startups without entrenched systems and processes to quickly become competitive. It is becoming more and more likely that your next competitor is one you have not even heard of yet. A small electronics contract manufacturer, with the right motivation and funding, can become the next medical device giant.
Historically, dissatisfaction has been the result of an external event or driver, a shift in the market, or a new competitor, that caused a crisis for the organization. Today companies no longer have the luxury of expecting daily operations to fall into easily predictable patterns, periodically interrupted by carefully planned and executed bursts of change. The companies that survive, and even thrive in today’s market are those that cultivate dissatisfaction – not on a personal level of course, and not the simmering frustration that is generally associated with the term. Organizations that flourish will be those that refuse to settle for current success when so many external factors are in a constant state of flux.
Hold on… we’ve spent the years, decades trying to satisfy not only our customers, but our internal teams as well based on the premise that there is a strong correlation between employee satisfaction and customer satisfaction! Now you’re telling us we have it wrong?! Well, this will be easy… longer hours, lower pay, and less time off for everyone! Not exactly what I mean…
There are two kinds of dissatisfaction.
The “bad” kind that we’ve all been working so hard to correct: poor working conditions, skewed work-life balance, appropriate pay scales, etc. is demotivating. Keep up the good work on all of that! However, like success in the market, employee satisfaction can be a double-edged sword, actually inhibiting innovation.
Transformation is hard. Remember the “Ain’t broke, don’t fix it” comments? It’s easier to stick with what we know and work on incremental improvements. Employees who are satisfied with current processes will not be the ones championing change.
“Well-behaved women seldom make history”, a quote originally penned by Laura Thatcher Ulrich that now appears almost everywhere, including her own book on the subject, denotes exactly the type of dissatisfaction we want to foster. The kind of frustration that questions the status quo, asks “Why not?” and seeks something greater than incremental change.
People who transform their organizations will be those irritated enough with the current situation that they’re willing to exert the effort and bear the risk to change it. This “good” kind of dissatisfaction is highly inspiring and can be quite contagious and it is exactly the type of dissatisfaction that is required for transformative change. The same leaders who refuse to settle for market success and recognize the need to continuously transform their organizations, must not only look for dissatisfaction on which to capitalize, but also be willing to cultivate this sort of dissatisfaction in their employees. But how?
Challenge your leaders and managers to find out what’s wrong – or could be wrong in the future – with current operations or solutions. Provide them with examples of companies that failed to innovate, relied too much on their initial success or those that flourish through constant innovation. Netflix is a great example. Blockbuster spurned a partnership when Netflix was just starting out. Where are both companies now? Have them challenge their teams in return. Remember those pesky engineers we discussed last time around? They love to be asked how something could be done better. In fact, almost everyone, regardless of role, has at least one idea for how the company could improve either their own work or performance in general.
Provide open, direct channels of communication at every level. Create the opportunity to regularly share ideas – in small teams, functional groups, and company-wide – in the form of weekly, monthly or quarterly meetings. The recent pandemic has fueled the growth and usage of tools like Zoom and Microsoft Teams for bringing geographically diverse teams together. But don’t stop here – go beyond the expected. Open channels direct to the leadership team. Until you can build the trust that true openness requires, utilize anonymous surveys to get honest feedback. And listen without judgment to the input. Utilize tools like Slack, Skype, and Microsoft Teams further encourage 1:1 and small group conversations.
Reward the “good” dissatisfaction. Highlight improvements and gains that result from employee input. Even in failures, praise the involvement and promote the lessons learned.
Were you able to remove a bottleneck by utilizing a new process or improve performance based on a new system?
And, since you can’t be everywhere as a leader, put a system in place where managers, even colleagues, can nominate each other for recognition.
Ask what else? After you celebrate, rinse and repeat. Stay dissatisfied. Remember, the rate of change is accelerating. Meeting the challenge will take a continual pursuit of excellence.
See you next month for a focus on Vision (no pun intended!) and First Steps…