The Five Fatal Habits
For more than 30 years, five habits have consistently stifled, smothered and strangled organisational efforts to create future-fit cultures of innovation and agility
“When the rate of change inside an institution becomes slower than the rate of change outside, the end is in sight. The only question is when”.
Jack Welch made what was perhaps his most enduringly insightful statement above towards the end of his 20-year tenure as CEO of General Electric, during which time GE’s market valuation shot from $14Bn to $410Bn. 1
In today’s increasingly volatile, uncertain, complex and ambiguous 2 climate, organisations need to repeatedly recognise and respond to new threats and create, cultivate and capture new opportunities.
To survive and thrive in this future, organisations must become sufficiently innovative and agile so the rate of change inside the organisation keeps up with the increasingly uncertain and unpredictable outside world.
This involves a fundamental transformation that has to be achieved whilst the organisation continues to deliver current expected results.
Innovation and agility aren’t things you can simply ‘bolt on’ to an existing organisation by setting up an innovation lab, creating a digital platform or partnering with external creative ideas agencies.
Yes, new technologies like Quantum Computing, AI, Blockchain, Cloud Services and 5G will open up new possibilities but in order to capture these, organisations must create a culture in which people experiment, explore and exploit new ways of creating new value as a normal part of their day to day work.
This is exactly the kind of culture that makes firms like Facebook, Amazon, Microsoft, Google and Apple so successful.
And it’s the lack or loss of such a culture that slows down the rate of change inside an institution, ultimately leading it towards its demise. 3
The biggest challenge that established organisations face in becoming more agile and innovative is escaping from legacy cultural baggage.
This doesn’t just slow them down but acts like an immune system that actively protects and preserves the status quo whilst stifling, smothering and strangling innovation and agility.
Most attempts to improve innovation and agility fail due to this cultural baggage.
So, how can you ensure that your efforts succeed?
The single most important thing to understand is that cultural transformation only succeeds when it’s led, guided and delivered by people in the organisation themselves.
That’s why the vast majority of transformational change efforts fail - because they’re designed and delivered by big consulting firms whose primary aim is to keep lots of their junior consultants billable on client fees.
Why would you expect your people to build their future-fit organisational muscles when a bunch of outsiders get shipped in to do the heavy lifting?
If these big consulting interventions actually worked, then you can be sure that the firms involved would be running around with their megaphones telling everyone about the amazing high profile success stories of transformational change they’ve guided and led.
Despite big consulting having grown into a gargantuan $250Bn global industry, such success stories are conspicuous by their absence.
Instead, big consulting blame their failed efforts on “employee resistance and lack of management support”. 4
So what are the five fatal habits that underpin the cultural baggage that prevents organisations from creating future-fit cultures and that are systemically reinforced by the way big consulting firms operate?
Habit #1: “One Best Way” Thinking.
This is a legacy that stems from the Scientific Management principles of the early 20th century.
Overcoming this habit allows an organisation to leverage its own unique opportunities to achieve greater success with less effort and risk.
Habit #2: “All or Nothing” Thinking.
This is a legacy that stems from the Strategic Planning era of the 1960’s to 1990’s.
Overcoming this habit enables more people to make pragmatic, low risk, high leverage, iterative contributions to growing organisational innovation and agility.
Habit #3: Leadership that Creates Followers.
This is a legacy that stems from traditional and now woefully out of date notions of what it means to be a leader.
Overcoming this habit develops an organisation’s capacity for agile leadership.
Habit #4: Wasting People’s Strengths.
This is a legacy that stems from traditional HR practices rooted in Habits #1, #2 & #3.
Overcoming this habit unleashes the collective human capacity for innovation & agility.
Habit #5: Hired Help that Hinders.
This is a legacy that stems from more than a century of traditional ‘help’ from external big name consulting firms based on the finders, minders, grinders business model.
Overcoming this habit is absolutely essential if an organisation is to break free from the single most debilitating systemic reinforcement to the other four fatal habits.
Find out more about the five fatal habits and how to overcome them in my free 22 page report - direct download here.
No signup is required to download the report but if you want to make sure you regularly receive these posts every week, subscribe now.
This statement appeared in GE’s 2000 Annual Report p4 ‘Relishing Change’. After Welch’s retirement in 2001, GE’s top management failed to keep up with market trends and the firm’s value has fallen to around a quarter of when Welch left.
The increasingly volatile, uncertain, complex & ambiguous multilateral world that emerged after the Cold War is often referred to by the acronym ‘VUCA’ – coined in the 1990’s by the U.S. Army War College.
There is already evidence that bright shining star Google is losing some of its lustre.
Big consulting brand leader McKinsey made this claim here where they state: “We know, for example, that 70 percent of change programs fail to achieve their goals, largely due to employee resistance and lack of management support”. Those of us who have frequently been hired to help organisations recover from the mess big consulting leaves behind would argue differently: “We know, for example, that 70 percent of change programs fail to achieve their goals, largely due to them being led by firms like McKinsey”.