Organizational change must focus on people

The issue is not that organizations are resisting change, but rather that they fail to successfully execute their intended strategies. Image: Shutterstock

Professor Tony O’Driscoll of Duke University’s Fuqua School of Business says the pressure to continually change as a result of a constantly shifting business environment has shortened the life of many organizations.

O’Driscoll explained on Fuqua’s LinkedIn page (full video above), that between 1970 and 2020 the average lifespan of a publicly traded company fell from 55 to 31.6 years.

“When my mom and dad told me, ‘You should keep your job at IBM, and stay there for the gold watch’, that's probably statistically very difficult to do today,” O’Driscoll said.

The issue is not that organizations are resisting change, he said, but rather that they fail to successfully execute their intended strategies.

“They fail in their transformation efforts almost 80% of the time,” O’Driscoll said. “That’s like $2 trillion a year (in failure costs), roughly equivalent to the GDP of Brazil.”

O’Driscoll spent years studying why transformation was failing and concluded there wasn’t enough focus on an organization’s people—“they are strategy in motion,” he said.

That led O’Driscoll to design the People Centered Transformation (PCT) Framework –developed with the support of the Project Management Institute’s Brightline initiative. The PCT Framework suggests 10 key elements common to people-centered organizations. Once leaders identify which key element they need to activate first, they take steps to enact that change—and the process keeps repeating on different elements until change is complete.

O’Driscoll outlined a few aspects of his framework which centers around communication and decision-making in driving change.

He said when addressing organizational change, leaders often emphasize the tangible aspects (structure, systems, process) and rarely the emotional ones (experiences, beliefs, behaviors).

“We have to engage the people in the change effort,” O’Driscoll said, “because if we don't, they won't play along.”

He said people-centered organizations identify the beliefs and behaviors they want to change and then focus on new structures, processes and governance to achieve that change.

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To this end, “communicating a compelling change narrative” is at the core of a people-centered culture, he said

“In 1963, when Martin Luther King sat in front of the Lincoln Memorial, he did not say ‘I have a plan,’” O’Driscoll said. “It’s a dream, not a plan, that will be the spark to motivate change in human beings.”

He said research shows that companies that focus on a shared belief perform better.

O’Driscoll said many organizations also struggle with how to encourage  “decentralized decision-making”, especially crucial when the volume of quick decisions companies need to make has turned them into “decision factories.”

“Do leaders only make the choices they're best equipped to make?” he asked. “(Do leaders) clarify the choices others should make and the boundaries within which to make them?”

O’Driscoll said the goal of the PCT Framework is to create a shared understanding among employees who will then apply their discretionary effort to “go the extra mile to make change happen.”

He believes people-centered organizations are best poised to execute change, because they create a culture of “aspiration, alignment, autonomy, and accountability.”

“In these organizations, middle managers are the nervous system between brain and hands, the tissue connecting the CEO to the edge of the organization and back,” O’Driscoll said. “These organizations consider people their assets, not their liabilities.”

[This article has been reproduced with permission from Duke University's Fuqua School of Business. This piece originally appeared on Duke Fuqua Insights]