Global affairs are often unstable. This month, Japanese stock market falters again, capping its worst single-week performance since the global financial crisis in 2008. Japan is not alone in its underperforming markets. Yet, globalization has connected countries through various elements. Financial markets are not an exception. This article explores issues of change in a global environment and discusses the merits of change agents in today’s organizations.
Change comes in many ways for organizations. In Harvard Business Review, author Rod Ashkensas put a framework on how to deal with change: “It’s easy to beat ourselves up over failures in change management and the various studies that show we’re not getting better at it. But we really do know how to execute discrete changes.” The basic type of change in organizations can be categorized as incremental (gradual) and disruptive (radical). Incremental change can be defined as “a small adjustment made toward an end result.” Managers are either aware of the change or have enough notice so that they can react in a controlled predictable fashion.
With incremental changes, organizations can make slow, systematic improvements. If you think about Whirlpool and its appliances, an individual would get a good idea on how organizations reply to incremental changes. Customers, for their appliances, wanted them to reflect societal changes. Given this reality, appliances like refrigerators went from the basic colors of white and black to more unique color combinations. Electronic technology was included to make Smart appliances. Companies now have ample time to react to consumer demand. Disruptive change does not give organizations such a generous reaction period.
Disruptive change is what causes great companies to fail and well respected CEOs to get fired. Organizations cannot afford to misunderstand this type of change. Unlike incremental change which may have some predictability, disruptive change can be classified as unpredictable, irrational, and unstable. All of these adjectives mean higher risks for organizations. Disruptive change speaks the changing nature of our society. Young adults feel comfortable with their technology. We live in an instant society that wants everything now. Disruptive change can provide a market advantage.
Harvard professor Clayton Christensen, author of The Innovator’s Dilemma, coined a term disruptive innovation to explain how an innovation transforms an existing market or sector by introducing simple, convenient, accessible, and affordable to customers. In fact, the produce and service will be quite inferior to the status quo produce or service. A disruptive innovation is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market leaders and alliances.
One of the most disruptive innovations to modern education has been distance learning. Traditional universities have attempted to ignore the model with only modest undertaking. The University of Phoenix, a not-for-profit institution of higher learning with over 100,000 students and 112 worldwide campuses, has slowly overtaken the educational market. While the university has come under fire for its business practices and have lost students, no one is saying that the innovative strategy of distance learning and treating students like customers is a faulty model.
Globalization with all of its wonders poses a threat due to disruptive change. Organizations need leaders who are change agents during this time in history not just managers. Dr. Christenson notes the failures of great companies like Sears to unanticipated change: “As we shall see, the list of leading companies that failed when confronted with disruptive changes in technology and market structure is a long one…One theme common to all of these failures, however, is that the decisions that led to failure were made when the leaders in questions were widely regarded as among the best companies in the world.”
What is a change agent? A change agent is someone who ‘helps an organization transform itself by focusing on such matters as organizational effectiveness, improvement, and development. A change agent has a high internal locus of change. That reality means that this person is driven from the inside out. Under adversity, that individual has enough internal drive to overcome external forces. Os Hillman, author of Change Agent: Engaging Your Passion To Be The One Who Makes A Difference, argues that change agents are special people.
In order to shift culture, Hillman notes that an individual needs to be special: “It takes less than 3-5 percent of those operating at the tops of a cultural mountain to actual shift the values represented on that mountain.” Many organizations are stuck in a rut and need a change agent to carry them out. In most organizations, the significant changes do not happen from the bottom-up. The following are characteristics of an effective change agent in a global environment: (1) Courageous, (2) Morally grounded, (3) Global mindset, (4) Visionary, (5) Strategic, (6) Adaptable, (7) Relational, and (8) Committed.
Therefore, the leaders in power need to be change agents in their organizations. Unfortunately, many executives are unwilling to invest their time in developing and promoting change agents in their organizations due to the fears concerning their shareholders and financial pundits. With change continuing to be more rapid and unpredictable, today’s organizations need to equip themselves effectively. They must embrace the recruiting and development of change agents within their organizations.
How has disruptive change impacted your industry and organization? Please state how effective organizations should handle change using your professional and personal experiences.
© 2016 by Daryl D. Green
Change Agent: Engaging Your Passion To Be The One Who Makes A Difference by Os Hillman,
“Nikkei Plummets in Japan on Yen Strength” by Jonathan Soble
The Innovator’s Dilemma by Clayton Christensen
“We Still Don’t Know the Difference Between Change and Transformation” by Rod Ashkensas