Can large organisations really change?
Transforming large organisations: power or will?
On November 27th, Laurent Ledoux spoke at the NextGen Enterprise Summit 2020 about the ability of large organizations to transform themselves. A theme that raises several questions, both in terms of their capacity to do so and their real willingness to do so.
- Collaborative governance
- Organizational Transformation
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From the very beginning of his presentation, Laurent gets to the heart of the matter. For him, it is obvious: yes, large organisations can change and set up authentic collaborative governance. It's not easy, but historic blue chips face many challenges that push them, whether they want to or not, to transform themselves in this direction.
For large organisations, with thousands of employees, it is essential to understand that such a transformation is not just about establishing a collaborative culture: it also involves adjusting all the organisation's cross-functional processes (HR, payroll, legal, finance) and in some cases even reinventing its business model. This requires a sophisticated collaborative approach, intelligently combining both top-down and bottom-up dynamics.
"It is no coincidence that Frédéric Laloux has entitled his book "Reinventing Organisations". His message is that there is much more at stake than the implementation of collaborative governance. It's about reinventing organisations in a systemic way," says Laurent.
He also returns to the fact that transforming an organisation is not complicated, but complex. This is a distinction that can also be found in Laloux's work. A complicated system is one for which there are pre-established solutions and whose functioning allows us, a priori, to anticipate certain future events or causal links between the components of the system. A complex system is one for which there is no "solution" or pre-established transformation path: the interactions between the components of the system are impossible to predict; the transformation is not imposed, it emerges. At most, it can be accompanied.
Indeed, a company is a living organism, composed of cells (people for example) and coordination mechanisms (processes for example), themselves influenced by events endogenous and/or exogenous to the organization (the covid-19 crisis for example). This creates many levels of complexity and challenges within the organization. Here are some ways of addressing these issues.
Firstly, Laurent suggests integrating a series of tools and techniques without dogma and presuppositions. In doing so, he takes up the words of Jean-Christophe Conticello who insists that an organization must, at all costs, avoid a "parish rivalry" between different possible approaches, such as Lean Management, Agile, Teal, Liberated Enterprise, Holacracy© or Sociocracy.
"All these approaches or philosophies more or less explicitly recognise the need to better satisfy the three major fundamental and universal psychological needs highlighted by Deci & Ryan in their theory of self-determination, namely the need for inclusion, framed autonomy and personal development. It is therefore a question of extracting the main contributions of these different approaches and marrying them together in the best possible way according to the specific needs of the organization concerned to help it transform itself in an authentic, in-depth way", says Laurent.
Laurent went on to explain that while dogmas are useless, the establishment of a clear framework is essential to initiate transformation at all levels of the organization.
"This framework can be broad, it does not need to go into detail, but it must borrow a common language from all departments of the organization. Many large companies that have tried to "do collaborative" have made the mistake of letting teams test very different approaches separately, if only in terms of the vocabulary they use. This paradoxically reinforces even more the silos that collaborative governance is precisely supposed to reduce. However, in order to set a common framework for transformation, the leaders of the organization need to be genuinely involved in the transformation project from the outset", says Laurent.
According to him, in order to successfully implement collaborative governance, top management must set an example. The authenticity with which the CEO approaches such a transformation reflects the vision and the need for change he or she wishes to address. The top management can certainly be accompanied and coached, but it is impossible for them to delegate the keys to such a transformation to a consulting firm, however good they may be, as is the case for other, more traditional types of reorganization - such as Business Process Reengineering.
An authentic transformation therefore inevitably requires in-depth work with the company's management committee to help its members find the right posture, which will enable them to truly assume their leadership while giving their employees the latitude to implement the transformation.
As Carlos Verkaeren explained the week after, in a webinar organised by Phusis, it is also imperative to ensure that the rationale for the organization and its transformation encompasses more than just increasing shareholder value. The improvement of employee well-being and the societal impact must be considered as important as the development of shareholder value, otherwise the transformation will be instrumentalized for the benefit of a financial strategy and will only fail. The failure of many organizations that claimed to transform when their sole purpose was to make budget cuts to meet shareholder demand is evidence of this.
"By trying to transform themselves authentically, companies are taking a significant risk. They devote time and resources to a project that may be decisive for their future but that may also fail. It is therefore essential that they move forward step by step, testing and experimenting iteratively, mitigating the risks as much as possible. In order to increase the chances of success in such a transformation, it is important to be accompanied by people who have real experience in this area, who have themselves experienced similar transformations as managers in large organizations. Indeed, it would be dangerous to claim to accompany such a type of transformation without having experienced it yourself before", Laurent underlines.
In the same vein, it is essential that leaders who decide to carry out a genuine transformation project ensure, from the outset, that all of their employees internalise the skills related to collaborative management as quickly as possible, while taking into account their different levels of maturity in this respect.
"In general, employees involved in transformation teams have a degree of knowledge and understanding of collaborative governance and its mechanisms that can vary widely. In large organizations, in order to be effective and to best motivate the people involved, it is therefore essential to set up differentiated training paths adapted to each person's level of maturity in terms of collaborative governance. This makes it possible to go faster and save precious time resources in disseminating the new collaborative culture", concludes Laurent.
Yes, large organizations can transform themselves authentically if they really want to. But do they want to? No one can say for sure except the people who run them. On the other hand, what can be said is that they will have to change whatever happens, because they are part of an ecosystem that cannot but change. In order to find out whether their desire to genuinely transform their organization is real, leaders of large organizations can ask themselves the following four essential questions:
- Am I convinced that the vast majority of the organization's members would, under the right conditions, be willing and able to take responsibility for leading the organization autonomously towards the objectives it has set itself?
- Am I ready to work on myself to change my posture, to adopt a low posture, to put myself authentically at the service of my collaborators?
- Am I convinced of the need to implement collaborative governance primarily for its benefits in terms of employee well-being and positive societal impact, regardless of its effects on shareholder value, the latter not being the ultimate goal but a possible outcome of the transformation?
- Am I willing to let go, i.e. to accept that the transformation process is out of control, even if the risks can be mitigated?
If the answer to these four questions is a frank and genuine 'yes', which comes from the gut (and not just the head), then the leader is truly ready to engage his or her organisation in such a transformation. If not, it is better that he or she abstains and waits until he or she is genuinely ready.
Watch the video (in french)
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