How to embrace change

Embracing change is not easy. But despite the complexities involved, Hugh Mitchell, Chief Human Resources and Corporate Officer, Royal Dutch Shell plc, argues there’s no need for leaders – whether a head teacher or a CEO – to reach for management books. Excerpts from his speech on the subject given recently at the School Leaders Scotland Conference:

I’d like to kick-off by describing two different frames of reference for the process of change, which have emerged over time. Better researched people than me have characterised these as a ‘Diagnostic’ form of change, versus a ‘Dialogic’ form. I like to think of them more simply as ‘Programmatic’ change versus ‘Emergent’ change.

Programmatic change is the more prevalent in organisations and institutions. It builds on the change theories which emerged in the 1940s and evolved over many decades. In essence, it involves analysing the status quo in an organisation and pin pointing specific changes that need to be made. The status quo is then unfrozen temporarily, some changes are made, then it’s re-frozen. It often characterises change as a “journey” from A to B. This model relies a lot on data to identify specific areas which could be improved. And it assumes that you have time to unfreeze, change and refreeze before the next big change comes along. It also tends to attract its own special language, diagnostics and depend on experts to manage the change process for you.

Another type of change, though, is ‘emergent’ change. This is less about setting up separate project teams to diagnose specific problems and design change projects, and more about a long-term, constantly evolving process. This model is about almost imperceptibly advancing productivity and effectiveness through constant efforts to spot performance gaps and immediately address them. Emergent change tends to focus on enquiry, group reflection, and evolving the narrative within the organisation, more than analysing data. It takes longer, and in my experience is more long-lasting and deep-rooted than most change projects. It also more powerfully uses alignment to a purpose or vision to provide the organising discipline for change, rather than the more analytical model more typical of programmatic change.

In preparation for today, I reflected on both theories in relation to the theme of this conference – leading change. And I kept coming back to two questions: do these theories actually help an individual or an organisation lead and control change? Or do they simply help leverage and exploit a change that’s happening anyway to achieve a specific outcome?

For answers, I’d like to tell a short story about Napoleon. Given that this year marks 200 years since the Battle of Waterloo, this seems apt. One day, he was speaking to a colonel of a Hungarian battalion. The colonel said he’d served in the army of Maria Theresa, who was Holy Roman Empress of the Habsburg Dynasty from 1740 to 1780. This prompted Napoleon to chime in: “You must have a few years under
your belt.”

When the colonel said he’d lived “sixty or seventy years” Napoleon exclaimed: “You mean to say you have not kept track of the years you have lived”.

The colonel responded: “Sir, I always count my money, my shirts, and my horses – but as for my years, I know nobody who wants to steal them, and I shall surely never lose them.”

I mention this story to illustrate the inevitable passing of time. Which is worth reflecting on when looking for an answer to the questions I posed. Because change, like time, is inevitable. It’s constant. And it can’t be led or controlled. In simple terms, if change cannot be led, is it more about leveraging broader change in pursuit of an enduring purpose? Everyone, from teachers to business people, can clearly control how they react to macro changes – be they societal, political, or economic. But they can’t control those changes themselves.

While it’s impossible to lead and control big picture changes, like the rise of technology, such changes can be embraced and harnessed for a specific purpose.

Technology is a good example of a macro change. Let’s wind back the clock. In 1989, Tim Berners-Lee wrote a document called “Information Management: A Proposal.” The response to it from his supervisor at CERN was “vague, but exciting” and Berners-Lee was given the nod to develop the idea. The World Wide Web was created a year later. Since then the pace of change has been staggering. This is well illustrated by images of people waiting for the announcement of a new Pope at St Peter’s Basilica in the Vatican. In 2005, everyone’s eyes are fixed on the balcony. But in 2013, most people are photographing or filming the announcement on phones or tablets. No wonder teenagers are now being referred to as ‘screenagers’.

As technology has changed, so too has the amount of data that’s created. A memory card in 2014 could fit 1,000 times more memory than the same sized card available in 2005. Put another way, a memory card that fits on the tip of your finger has 32 million times more memory than the guidance computer on Apollo 11.

It’s not just the amount of new data which is staggering, it’s the rate with which it’s shared. Look at social media. Every minute, around 280,000 tweets are sent, 72 hours of video are uploaded on YouTube, and around two and a half million posts are ‘liked’ on Facebook. These numbers are less surprising when you consider that more than 2.2 billion people actively use social media.

No single person or company can hope to control or lead all change in the technological landscape. But companies can embrace this change.

Take Uber and Air B&B. They’ve come in and are shaking up the services sector. These companies aren’t generating change. They’re tapping into the overarching technological revolution taking place and using it for a specific outcome, whether it’s taking on taxi companies
or hotels.

Some companies, of course, choose not to ride the wave of change. Look at what happened with Kodak. It’s a well-known example, but pertinent nonetheless. Steven Sasson, a Kodak engineer, invented the world’s first digital camera in 1975. Although bosses at the company were warned this could transform their industry, they failed to change their business model.

Did the pace of change in their world throw them off guard? Did they feel their successful products were immune to the changes? Or were they misguidedly hoping an existential threat to their status quo would blow over?

One thing is for certain: despite the ever-presence of change, it catches many of us – people, governments, schools and companies – off guard from time to time. Perhaps that’s what compelled Thomas Hardy to write that “time changes everything except something within us, which is always surprised by change.”

Perhaps the greatest change is a challenge that is unfolding over the course of this century. This challenge boils down to the following: how do you address two key global imperatives – rising global demand for energy, and
climate change?

Demand for all types of energy is on the rise – from power to plastic, and heating to transport. In fact, the International Energy Agency, the energy watchdog, expects global demand to be 37 per cent higher in 2040. This increasing appetite for energy is coming from a global population growing by 200,000 people a day. It’s also coming from economic growth and a rising middle-class, with a growing desire for products and lifestyles.

When looking at future demand, there’s a critical point which can’t be overlooked. And that’s the fact that one in every six people on the planet still don’t have access to electricity. A lack of electricity means no light for students to use when doing their homework in the evenings. It means no access to the internet to research a project they’re working on at school. Measurements of human wellbeing, such as education, are correlated positively with the supply of stable and affordable energy.

All of this points to the reality that meeting future demand for energy is a formidable challenge. At the same time, there is the need tackle climate change. Ultimately, we need much more energy, with far fewer emissions. Easy to say. Tough to do. To address both challenges the world must undergo a transition over the course of the century to a low-carbon future. This macro change to the global energy system is not something that can be led and controlled by any one company or government.

Looking back over all of the changes I’ve been involved with, there are three practical lessons I’ve taken away.

Lead change from within. One, ownership of change is critical. Leaders – whether a head teacher or a CEO – need to get stuck into the conversation and drive the process forward. Employees know their company a heck of a lot better than an external consultancy. So change should be led from within, and not outsourced to others.

Coupled with ownership must be a long-term commitment from leaders. If there’s a quick succession of education ministers appointed in Westminster, I don’t need to tell you that this will upset the balance in your line of work. But if a minister is in post for a reasonable length of time – and if that minister owns the changes being implemented – they’re bound to be better.

Historically, major organisational changes in Shell were run by consultancies. This meant we were largely dependent on another company doing much of the thinking for us. This changed in 2008, when we began to manage organisational change ourselves.

I’m not saying external consultancies don’t have important roles to play. They do. But they are important when you need niche support in areas of the business where a company decides not to build a deep capability.

Management of change is not one of those areas. As well as taking responsibility and ownership for managing change, it’s also important for leaders in companies to listen to and involve people affected by it. It’s no use sitting in your office and dreaming up the next big idea with a few other senior colleagues. You’ve got to involve the frontline too.

That’s exactly what the Comte de Talleyrand did during the French Revolution. Observing the sans culottes heading to storm the Bastille, he said: “There go my people, I must follow them, see where they are going, and understand their intentions so that I can lead them.” This is a powerful example of taking time to understand the motivations of your teams. Reaching for the re-set button. The second lesson I’ve learnt is that big changes aren’t necessarily the right option. Sometimes, without doubt, significant change is needed. But often it’s not. And it certainly shouldn’t be the default position.

New leaders often want to hit the reset button when they take over. This is a perfectly natural instinct, but re-structures aren’t a panacea to all ills. In the end, it may well turn out that a big company re-shuffle is the best solution, but it shouldn’t be the first one. Nor should it be taken lightly, for the simple reason that even well-calculated changes cause big ripples.

One reason why leaders instinctively think about a change project is it will grab people’s attention. The trouble with this approach is that people associate a ‘change project’ as something with a start date and an end date. But this ignores the fact that change is continuous. And as such, surely it’s about having a focus – day-in and day-out – on strengthening the capability or performance of a business. Bit by bit. This can be done through well-managed tweaks which leaders across the organisation are responsible for.

The ‘everything curve’ applies here. It’s simply making the point that after a change has been made, it’s not good enough to take your foot off the pedal. If that happens, you fail to achieve continuous progress. You’ve got to continually think about change, to create that next upward curve.

It’s also about approaching organisational change with caution and managing it carefully. Because the changes you make really will affect everything.

At these moments, I tend to resort to a football analogy to make a point. So here goes. When David Moyes took charge of Manchester United he was seen by many as a safe bet. But the team’s performance plummeted. Many of the players and coaching staff were the same. But the one change in head coach from Ferguson to Moyes upset the balance and led to a staggering drop in performance.

The last aspect of this point which I want to touch on is that it’s crucial that employees don’t feel alienated when a leader does opt for a big change. Don’t rubbish the past. All you’re doing is criticising the work many of your employees have their fingerprints on. Instead, recognise that people have pride in what they do. So involving them, and having conversations, is important.

It’s always worth reaching into the DNA of the past. Then think about how that can evolve and be relevant in the future. This goes back to avoiding a stop-start approach. It’s more about an evolutionary process.

Motivation for change. The third and final lesson I’ll share is that timing and reasoning is essential when big changes are being made. For example, if a new leader takes the helm he or she may decide to initiate a big set of changes. The intention may be good. But regardless, a new leader isn’t the trigger for effective change.

However, if a number of changes beyond a company’s control prompt a leader to think that the status quo is intolerable and a future opportunity irresistible, then it may well be a good time to exploit the changing tide for the benefit of the company. None of us have a crystal ball. But even though we can’t predict the future, we can use tools – such as scenarios – to make sure that we’re making changes with good reason, and at the best possible time. Politicians demonstrate just how important timing is when it comes to making changes. There are examples across the political spectrum of changes being made at tactical, opportune moments.

Embracing change isn’t easy. But despite the complexities involved, don’t reach for the management books. There are a few simple truths worth sticking by. First, drive change from within and engage heavily with the process. Farming out responsibility won’t deliver the desired outcome.

Second, respect and build on your past, using it as a platform for change. Telling your teams that the work they’ve done in recent months or years is rubbish won’t help your cause. What will help is to adopt an evolutionary approach, and appeal on them to build on and re-frame their good work so it’s relevant for the future.

Third, be opportunistic, and seek out the right opportunities to drive effective change. And tied to all of these points is the need to take people with you through engagement, building alignment and shared purpose and making change a norm not an exception.

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