I’m sure our earliest ancestors recognized the constancy of change; however, the first philosopher who recorded that observation for history was the Greek philosopher Heraclitus. According to freelance writer and part-time philosophy professor Joshua J. Mark, “[Heraclitus’] central claim is summed up in the phrase Panta Rhei (‘life is flux’) recognizing the essential, underlying essence of life as change. Nothing in life is permanent, nor can it be, because the very nature of existence is change.”[1] Plato accepted that Heraclitus was the father of the idea. He stated, “Heraclitus, I believe, says that all things pass and nothing stays, and comparing existing things to the flow of a river, he says you could not step twice into the same river.” Few, if any, leaders would argue that change isn’t constant. It logically follows, therefore, that dealing with change is the very essence of what it means to be a leader.
Resistance to change is also constant
The Arapahoe (Colorado) Libraries system staff asserts, “One constant since the beginning of time might be change, however, the fear of change is also a constant. Since times immemorial, humans have liked routine. It makes us feel in control of our lives.”[2] And, centuries ago, Niccolo Machiavelli, in his classic The Prince, wrote, “There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things, because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new.”
The Arapahoe Libraries system staff writes, “When fear of change becomes irrational our ability to control it becomes a phobia, particularly Metathesiophobia. A Metathesiophobe feels they have no control over their lives due to constant change. Metathesiophobes tend to live in the past and are unwilling to progress, which often leads to depression which can seriously impact their professional and personal lives.” A great leader understands that change can be difficult and finds ways to help others feel comfortable with change. They have no choice. As Benjamin Franklin once concluded, “When you are finished changing, you are finished.”
Even leaders can find themselves resisting change. McKinsey & Company analysts call this “the adaptability paradox.”[3] They explain, “Just when leaders need fresh thinking and decisiveness, they tend to fall back on tried-and-true ways.” To counter this paradox, McKinsey analysts insist leaders must become more adaptable. They write, “By becoming aware of and open to change now, we can maintain control over uncertainty before pressures build to the point where altering course is much more difficult, or even futile. Our research shows that adaptability is the critical success factor during periods of transformation and systemic change. It allows us to be faster and better at learning, and it orients us toward the opportunities ahead, not just the challenges.” Tim Ryan, U.S. Chair and senior partner at PwC and the founder of the Trust Leadership Institute, agrees that too often leaders only see challenges and not opportunities. He writes, “Many CEOs I’ve spoken with feel as if they are focusing more on ‘downside risks’ than ‘upside opportunities’.”[4] If leaders are resisting change, they aren’t really leading.
Fostering better change management
McKinsey analysts believe a leader must change (i.e., become more adaptable) before they can lead change in an organization. They suggest leaders follow three-steps to achieve better adaptability. They are:
Step 1: Practice well-being as a foundational skill. “When people are exhausted, they fall into a scarcity mindset (thinking about what they don’t have) and aren’t as adaptable or open to learning. … The best way to handle demanding situations is by investing in one’s own well-being first. … Leaders have to be fit to face whatever comes their way and to support others for however long it takes.”
Step 2: Make purpose your North Star and define your ‘non-negotiables’. “While learning is normally invigorating, it can feel daunting during challenging times. We often fall into the trap of attending to the most urgent tasks rather than what is the most important. That’s where a sense of purpose comes in: it offers a framework that makes hard work worthwhile and expands tolerance for change. … Purpose starts with exploring what truly matters to you and what you want to spend time on. As your North Star, your purpose can guide you through tough decisions and inspire you to move forward. While purpose helps define what you hope to gain, it also frames what you don’t want to lose — your ‘non-negotiables.’ … The link between well-being and purpose is strong. People who say that they are ‘living their purpose’ at work report levels of well-being that are five times higher than those who say that they are not. Research shows they are also healthier, more productive, and more resilient.”
Step 3: Experience the world through an adaptability lens. “Unless the brain learns something new, it will forecast what will happen based on what it has seen and learned before. That is why people default to certain behavioral patterns, especially under stress. Some want to control the situation. Others tend to see themselves as victims, claiming everything is out of their control and shutting down. Our default patterns may serve to protect us in the moment. But ultimately, they may hinder our ability to adapt and respond in ways that a new situation requires.” According to the McKinsey analysts, an adaptable mindset embraces the following characteristics: growth; curiosity; creativity; agency; abundance; and exploration.
Once a leader has overcome the adaptability paradox, they are ready to lead an organization as it transforms to meet the needs of a changing business environment. Ryan asserts, “A CEO not only has to change their organization, they also need to be highly skilled in leading people through change. This requires four actions.” Those actions are:
1. Prioritize, prioritize, prioritize. If leaders need to adaptable, Ryan insists organizations need to be agile. He insists, “Agility is key in the shifting landscape.” One way to enhance agility, he explains, is to leverage scenario planning. He explains, “Engaging in scenario planning around key issues can help leaders position their organization to pivot quickly in a new direction when needed. Too many priorities are the enemy of focus and run the risk of doing a lot of things poorly or ‘just okay.’ Even if it means pulling back on initiatives or pivoting the mindset of the company to focus on the right things, leaders have to prioritize what matters most to their stakeholders and do it well.” Fortunately, cognitive technology solutions, like the Enterra Global Insights and Decision Superiority System™, can help companies explore hundreds of scenarios at computer speed.
2. Invest in trust. Ryan asserts, “Trust is one of the most valuable assets a company can have during these complex times, and businesses are being challenged again and again on their trustworthiness.” In a climate of divisiveness, fostered by political leaders who deliberately lie to undermine trust and foment unrest, it should come as no surprise that trust is a rare commodity. Ryan observes, “Today’s leaders may overestimate how much their businesses are trusted by employees and consumers. In our recent survey, Trust, the New Currency for Business, we found a trust perception gap with businesses among both their employees (15-percentage-point gap) and, to a larger degree, consumers (a 57-percentage-point gap).” He adds, “Leaders may also overestimate what actually drives trust.” Compliance to laws and regulations, he asserts, “is only the beginning of maintaining trust.” He continues, “Stakeholders are also looking to businesses’ answers to questions like ‘Are we doing the right thing on diversity, equity, and inclusion?’ or ‘Are we doing everything we said we would do surrounding the environment?’ Businesses also have to look at the appropriateness of their algorithms, as well as their privacy and data policies, and other topics that will drive both value and improve trust. It’s on those deeper questions where companies’ processes often fall short, but expectations will only continue to rise.”
3. Simplify portfolios. Ryan writes, “During disruptive times, it’s often good to take a step back and ask whether the businesses in the portfolio make sense or whether some businesses are better owned by someone else. A more streamlined portfolio underpins an organization’s ability to stay agile and increases the likelihood of successful transformation.”
4. Prepare for shareholder activism. As I noted above, political extremism has found its way into the business environment. Right-wing extremists decry “woke” companies and left-wing extremists denounce “unwoke” companies. Either way, Ryan warns that leaders must be wary of activist investors. He explains, “Some CEOs and boards are objectively ‘looking themselves in the mirror’ to challenge established strategies and execution results to ensure that they are not prone to an activist’s target. Companies benefit from aggressive role playing and analyzing what activist investors would be looking for. … CEOs are also talking with their boards more about alternative strategies or perspectives on results to avoid surprises. The discipline of the discussion, as well as the objectivity of the process and judgments, are an area of improvement for many companies — and absolutely a skill to refine before an activist shows up.”
Concluding Thoughts
Machiavelli was correct when he insisted that change management is hard. Ryan agrees. He writes, “It takes time, intentionality, and focus for a CEO and leadership team to become highly skilled in leading change and creating differentiation. … Change is difficult — managing through it might even be more challenging. Yet, CEOs have no choice but to be even more aggressive with change efforts in their companies to simply stay competitive. This is the time to lean into change to drive more differentiation and thrive.” I couldn’t agree more.
Footnotes
[1] Joshua J. Mark, “Heraclitus of Ephesus,” World History Encyclopedia, 14 July 2010.
[2] Staff, “‘The Only Constant in Life Is Change.’- Heraclitus,” Arapahoe Libraries Blog, 9 September 2020.
[3] Jacqueline Brassey, Aaron De Smet, Ashish Kothari, Johanne Lavoie, Marino Mugayar-Baldocchi, and Sasha Zolley, “Future proof: Solving the ‘adaptability paradox’ for the long term,” McKinsey & Company, 2 August 2021.
[4] Tim Ryan, “CEOs, Here’s How to Lead in an Era of Constant Change,” Harvard Business Review, 16 June 2022.
