New Technology, Old Thinking

Change is about more than new infrastructure or systems: managers today have to be skilled in people and culture.

May 2022 | Practice

Material change is a must

The world is demanding that business become more sustainable. In part at least, this means ripping out old  infrastructure, systems and products. In their place will emerge low-carbon, Nature-friendly alternatives that yield value for society as well as for the bottom line.

Code a new platform. Launch a new service. Build a new office. Such tough challenges require people to think hard about design, process and results. The nightmare of the change itself is also well-known: resources, constraints, dependencies, milestones, tasks and other paraphernalia that sap managers’ energy.

Upgrades to the material, or physical, environment are clearly necessary. After all, carbon emissions (for example) will not reduce if we cling to fossil-fuel systems. Nevertheless, for leaders aiming to make their businesses more sustainable, ploughing through a Gantt chart for material change is one of the easier aspects of transition.

Non-material factors decide behaviour

A new platform, service or office brings the chance for sustainable practice. All the same, the burden of change lies not in reshaping this material world, but in other, non-material determinants of human behaviour. These include – often hidden or subconscious – beliefs, values, rules, norms, morals, language and institutions.

Leaders who ignore the power of this ‘culture’ will discover two things. First, that any progress they make is hard-won and slow – people resist change for many reasons. Second, that outcomes fall short of their expectations.

Culture overpowers technology

Back in Hong Kong, I worked for an international investment bank. Understandably, head office was keen to roll out its customer relationship management (CRM) platform. Work took shape over many months and, after some pain, the final project tasks were marked off. The system appeared on hundreds of desktops worldwide.

One year later, the solution was abandoned – because it was never utilised. The technology had been sound; the training extensive (tediously so). The stumbling block was how the leader of the delivery team, whilst skilled in ‘project management’, had quite neglected the people- and culture-related aspects of change.

Salesmen did not record meetings for others to view because this conflicted with a belief that they ‘owned’ the client. Directors saw the computerised process as bureaucratic and dull, at odds with the buccaneering spirit that had animated the bank’s success. Compensation strategies did not reward the sharing of information.

Never go home too soon

Such problems are commonplace. Yet many organisations still fail to account for human factors in change. Admittedly, to do so is not easy. Managers often lack the required leadership skills. Time and budget are exhausted on technology and other physical assets. People and culture dynamics are infamously hard to measure.

Ironically, a cultural assumption exacerbates this problem. Managers believe that their job is done when the material work is complete: code the platform, launch the service, build the office – then go home. Sadly, artificial intelligence, cardboard packaging and cross-laminated timber do not make for a sustainable business.

Industry is shifting to new models and practices. More than ever, leaders have to account for both material and non-material change. In practice, this means helping all stakeholders to see the value of – and to use well – the physical assets of a newly sustainable world.

Embrace three simple imperatives

Despite the hard impact of non-material factors on project outcomes and the bottom line, talk of ‘culture’ and ‘people’ can sound woolly. Nevertheless, effective change leadership may be achieved by embracing three simple, concrete imperatives.

Set out direction in plain words everyone understands, covering (a) financial ambitions; (b) commitments to reduce environmental damage; (c) ways the company will enhance individual lives and / or society.

Model effective behaviours. Senior role models accelerate or hinder change. Ensure that through their work managers stand for the long-term aims of the business; and that their actions always live up to their words.

Clarify expectations for sustainable work. Such values are a yardstick for how the company should operate. In time, the culture leaders talk about shapes day-to-day practice, which in turn reinforces culture.

New technology demands fresh thinking

Efforts to clarify direction, leadership and standards in these ways can span the entire organisation. Still, the three imperatives sit at the heart of all good change leadership. Directing attention to these areas will accelerate and enhance any attempts – big or small – to have new ideas adopted.

A fast system, an innovative product, a green building – these physical assets offer limited value when people continue to think, work, or live to outdated standards. Sustainable business demands change equally across the material and non-material assets of the organisation.

Companies have to act swiftly to stay ahead of society’s demands. As leaders recast the physical elements of their operations, so they must also harness the unseen forces that decide human behaviour and business outcomes.

Image Francisco Aceldo | Unsplash

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