An Article of the Modern Survival Guide
Welcome to the Modern Survival Guide! If you haven’t read one these article before, this is an article about a piece of the modern world that most likely affects you, and therefore is something you should know about. In this edition, we’re discussing change: specifically, change that takes plane in a large organization, like the company you work for, or maybe the company you own, or quite possibly the school system your child attends.
The truth is, of course, that we’re surrounded by large organizations that dominate huge swathes of our life experiences, so it’s just a generally good idea to know how they work. Let’s dive in, and see how things change.
The Status Quo is Always Preferable, and Change is Always Hard
There are two statements we need to start with that are both true and contradictory. One is that the only thing that stays constant is change. The other is that every organization trends towards the status quo. In this article we’ll talk about reconciling these ideas in the context of changing a large organization — an entity that has at least several hundred employees. Which large organization actually matters less than you’d think because, at the end of the day, most bureaucracies behave the same way, and all large organizations are bureaucracies. What kind of change is a more interesting subject, and we’ll get into that in a moment.
Let’s start by defending the part of our premise that needs defending, which is that organizations trend toward the status quo. There are a lot of reasons why this is the case, but they all boil down to one word: procedure. Any large organization has to have procedures for how they get work done. These are usually pretty easy to recognize — things like process flows, standard operating procedures, knowledge centers, template groups, and that one form that Doris insists you fill out every time you submit an expense voucher.
Procedure is extremely important. Good procedures lead to replicable processes, and replicable processes mean that you can start estimating and measuring work. All managers love to do that; it’s a huge chunk of their job. Estimating work is how you figure out how long it will take and how much it will cost to do things. Measuring work is how you identify good and bad work using data, track returns on investment, identify points of efficiency or inefficiency, and ensure customer satisfaction. These are all extremely valuable concepts to any organization, and thus every organization is highly incentivized to invent or adopt procedures for just about everything.
Equally important to these points, good procedures are also how you ensure that business does not grind to a halt if someone leaves. An acronym for institutional knowledge is SOP (standard operating procedure). Good procedures increase your odds of being able to bring new people onboard with some expectation they will be able to start doing their jobs quickly, while at the same time ensuring that your veterans are keeping to the “correct” processes, whatever those might be. At least, in theory.
The problem, of course, is that once you write anything down it freezes that process in place. The more procedures you have, the harder it is to change anything, because every change means you have to redefine, rewrite, and in general pay for the rework of your existing roster of interlocking procedures. Every organization is a machine, and machines react poorly if you just start randomly swapping out parts. Changes therefore require planning and coordination, or they fail.
Accordingly, the status quo is always easier than change. Once you have everything set up, it’s hard to change. People won’t want to change. Change is mentally difficult and physically taxing. It’s tiresome, stressful, and annoying to retrain others and yourself to a new procedure. We need to take this into account whenever we think about change. Every single organization on this planet has to change anyway. So, how does that work?
Why and How Change Happens
Every change starts with a shift in reality. I’ve written about this before. Something happens that alters the way that the objective universe works. Then someone notices it in their subjective reality. Then, and only then, can a change in their actions occur. That’s hard — our subjective self only rarely allows objective events to penetrate the bubble of delusions that we call “normalcy,” and people will go to extraordinary lengths to keep things “normal.” Proactive change can only occur in situations where people can imagine a change in objective reality, which is even harder.
To give an example, let’s picture a farm by a river. One night there’s a heavy rainstorm, and the river shifts course, flooding the farmer’s field. The farmer wakes up and notices their field in now underwater. This creates all the conditions for a change in the farmer’s land use strategy, which they may or may not act upon. Perhaps they clear another field. Perhaps they dam the river. Perhaps they wait for the water to go down, which requires no action at all and may be the preferred option if this sort of thing happens on a regular schedule. Note that only two of those alternative actions count as a “change;” waiting for the water to drop doesn’t.
Organizations have to deal with constant changes; the metaphorical river never stays the same from one night to the next. But only some of those shifts result in organizational changes. It’s very important to realize that change only occurs if, metaphorically, the farmer doesn’t think the river will go back to “normal.” Executives have a lot of trouble with this, and failed companies, bad strategies, and poor government all can come from someone failing to realize that the field is going to stay flooded, or failing to take action to prevent the field from flooding in the first place.
So, if you’re wondering why an organization that is relevant to you is not changing, the most likely explanations are that the people who run it either haven’t figured out that there has been a change in reality, haven’t figured out how to deal with that change, or they’ve decided that it doesn’t matter to them. If you want to change that organization, at least one of those things has got to go.
That was the “why.” In terms of the “how,” there are three main ways that change happens in any large organization:
- Top-Down Change: Management makes a decree that things shall change, and enforces a new system, process, or concept.
- Intervention-Led Change: An outsider (typically a consultant) audits the organization and suggests changes, which management and employees then adopt.
- Bottom-Up Change: Employees decide that things should change, and lead an effort to do their work differently.
Each of these types of change are different, each have their risks and benefits, and each require different levels of acceptance before change happens.
Before we go into detail on these changes, let’s talk about one more thing: success and failure. Changes are “successful” if they result in a material improvement in the organization compared to the status quo. Changes “fail” if they are not adopted, or if they result in worse outcomes than the status quo. Thus, every change is inherently risky, because the opportunities for failure are almost always more numerous than the opportunities for success. This also must be kept in mind whenever we think about change in a large organization — the potential benefits must arguably outweigh the risks before any sane manager will agree to change anything, and making that case can be very difficult indeed.
And so, without further ado…
Top-down change is probably the most common type of organizational change you’re likely to see, because it’s being made by the people whose jobs are supposed to be to do this exact thing: analyze and strategize to ensure their organization is on the right course, and adjust the rudder as needed. If management-level people aren’t constantly looking for ways to make their organization better, they’re failing at their jobs. Unfortunately, it can also be hard for management-level people to drop down from their 30,000-foot viewpoints and make good changes.
A top-down change is typically a generalized, procedure-based, or policy-based alteration to an organization’s work processes. That means it isn’t usually targeted at any one person or possibly even one work unit; it’s intended to apply to the broadest scope of people possible, in the broadest variety of circumstances possible, because that’s usually the viewpoint that high-level managers have, and they’re usually the ones with the power to mandate change. This has the effect of making top-down change expensive and time consuming, because any broad-scope change is going to involve a lot of rework. This is the origin of the paradox that any change made to increase efficiency first results in decreased efficiency.
A top-down change is also typically something that is forced upon the employees, and consequently is a coerced change. It’s not something that is left to personal preference; employees change the way they work because they’re told to do so and measured against the new paradigm, not because they want the change or even necessarily think it’s a good idea. Most of the time, in a top-down change scenario, no one cares whether or not the employees think it’s a good idea; management thinks it’s a good idea, and that’s enough to justify the change. Sometimes, management is dead wrong.
Top-down change requires two things in order to work: managers have to consistently require their employees to do things the new way, and they have to have chosen the correct change strategy in the first place. Top-down change fails if management slacks off on enforcement or picks a poor strategy. The way you’ll know that a top-down change has worked is that (1) the new process is being followed and (2) people have stopped talking about it. This indicates the change has been accepted into the work culture.
Overall, top-down change is the most common but also the least effective type of change. It has to be enforced, it is usually unpopular, it usually results in a period of lower efficiency, it is subject to the Peter Principle, and in some cases employees may simply decide to wait out a troublesome executive and then go back to doing things the old way. On the flip side, it is the most reliably available type of change available to an organization, because the people who want it are the people in the position to make it stick.¹
Next, we have interventions. Intervention-led change occurs when an outsider, typically a professional consultant, is hired by an organization for the specific purpose of identifying or leading a change management process for the organization. This is the domain of management consultants of all stripes, leadership consultants and trainers, teambuilding consultants, etc. It occupies a middle ground between top-down and bottom-up change in terms of frequency of use and effectiveness.
The main limiting factor for intervention-led change is that this kind of change has an added layer of expense: you have to pay the consultant in addition to the cost of making the change they suggest. There are a great many well-trained, extremely competent consultants running around, and most of them have a binder full of good ideas, but if you can’t afford to pay them then it’s kind of a moot point. There are also a large number of duds who present as if they are well-trained and competent, and you may not know which is which until they are already hired. This adds to the risk profile for an intervention-led change.
If you can afford to pay them, and you get a good one, consultants typically advocate for best practices. This is advantageous because best practices tend to be generally useful industry-tested strategies (as the name implies), they’re often quite clever, and consultants sometimes have an easier time cutting through an organization’s internal politics to get them approved. There’s no point in re-inventing the wheel if you can just pay someone to tell you how it works. Therefore, the primary benefit of intervention-led change is that you are taking advantage of a strategy that has already been tested on someone else; this doesn’t guarantee it will work for you.
This raises another limiting factor for intervention-led change: consultants generally are not able to perfectly tailor their proposed strategy to their client. Some do, but this usually requires the consultant to embed with project teams or conduct extensive interviews, which loops right back around to the cost issue. This can be a problem with best practice-oriented changes. They can lead to shallow, surface-level changes that people give lip service, but don’t do a lot to materially affect the organization. The hell of it is that it’s hard for upper managers to recognize this because they typically only have a high-level view of the organization to begin with. Sometimes a process change looks good on the outside, and it takes a years’ worth of data to realize it really didn’t do anything.
Finally, it’s worth remember that intervention-led change relies on an outsider by definition. You’re not hiring an employee, you’re contracting out a difficult job to an expert. Once the expert leaves the building, their expertise goes with them. If they change hasn’t taken hold by the point, you can be in trouble if there isn’t anyone else who understands how to carry it forward.
Therefore, intervention-led changes require a few things in order to succeed:
- First, they have to have funding. An organization that is looking for intervention-led change needs to recognize and budget for the expense of paying a consultant and making a change. This is not cheap.
- Second, they have to have buy-in. They require champions at both the management and employee level, people who thoroughly understand the purpose of the change, agree with it, and are willing to promote it among their peers.
- Third, they have to be tailored. Someone has to work with the consultant to make sure they aren’t applying a one-size-fits-all tuxedo to a penguin.
- And fourth, they have to have follow-through. Someone has to keep the change going after the consultant leaves the building.
One final note — this may sound very similar to a top-down change, but intervention-led change is subtly different. Top-down change is what management thinks is a good idea. Intervention-led change is typically what the industry thinks is a good idea. This tends to carry a bit more legitimacy as a result.
Consequently, intervention-led change tends to be less common than top-down change and more common than bottom-up change for the simple reason that you have to pay for it. But when you can, you generally get a good product for your money. It tends to be a cost-effective strategy that doesn’t rely on good ideas emerging from within, which is handy for a low-performing organization. The way you know an intervention-led change has taken hold is when everyone starts using new buzzwords and also understands what they mean.²
Last but certainly not least, bottom-up change occurs when employees identify and advocate for a process change that is then accepted by management. It is much less common and usually much more effective than top-down change, because it only takes place in organizations where two very important things are happening: employees care enough about their work to think about how they are doing their jobs, and management is willing to listen to them. Usually one or both of those conditions are absent in an organization.
Bottom-up change tends to be characterized by highly specific, technically-detailed alterations to specific processes. Unlike a top-down change, this type of change is usually only applicable to one process, or even one component of a process, and serves a very specific, often arcane purpose. About six people in the organization are likely to understand what it is, why it’s important, and how it will affect things. This raises the difficulty of communicating the necessity for the change, and accordingly lowers the likelihood of it being adopted.
For that reason, bottom-up change can be hard for managers to understand, much less promote; in my experience, the greater the separation between an employee and a manager, the less likely it is that a bottom-up change gets approved. This tends to be because the upper ranks have no idea what’s actually going on when employees do work, and can’t put the proposed change in a context that makes sense to them. Good organizations put strategies in place to account for this.
Bottom-up changes tend to be spontaneous, in the sense that there’s no telling when someone might suggest a good idea. Along with the previous point about specificity, this can make bottom-up changes harder to implement across multiple work units — in the time it takes to implement one change, someone else might have had another brainwave, which requires additional re-tooling to implement. This can have the effect of limiting the number of bottom-up changes that management will countenance at any given time, and this difficulty increases in line with the cost of revisions.
On the other hand, bottom-up changes tend to actually make work products better, which shouldn’t come as a surprise. After all, the employees who promote bottom-up changes are usually the people with the best view of the work process, and the expertise to understand when and how it needs to change. Particularly in manufacturing and computer programming, good organizations spend a lot of time promoting bottom-up changes, because they are essential to turning out a consistently good product.
In terms of success and failure, a bottom-up change only succeeds under a very narrow set of conditions:
- First, an organization’s employees have to take enough pride in their work to want to improve things. That rules out huge sections of the corporate working world right off the bat.
- Second, an organization has to have high enough employee retention that people can get familiar enough with their work processes to understand what needs to change. Expertise only comes with time.
- And third, the organization has to have a work culture in which management wants to listen to employees. That means that managers also have to be invested in the organization, and not be power-hungry ladder-climbing prima donnas, which rules out even more of the corporate world.
For these reasons, bottom-up changes are the least common but also the least risky type of changes in an organization. They require a very specific set of conditions to emerge, and an appropriate workplace culture in which to thrive, but they tend to result in meaningful and valuable changes to an organization. However, these changes are typically going to be very limited to narrow process areas. The way you’ll know a bottom-up change is working is that efficiency and quality-control metrics increase.³
Defeating the Status Quo
There’s been a running theme of omission in this article, and I’ll go ahead and call it out: where, oh where, are the middle managers in all of this? The answer is that, in each of these three change strategies, they succeed or fail on the backs of middle management. Middle managers are the secret sauce to defeating the status quo and implementing change. If that statement sent you into a dark place mentally, you’re not alone, but it’s still true.
Why is this the case? Simply because middle managers are always in the best position to champion change. They are the conduit between upper management and the employee workforce, they monitor day-to-day work, they are often the main level of management that deals with process problems, and good ones understand how the communications pathways of their organization function.⁴
Similarly, middle managers are always in the best position to kill any change before it has a chance to get started. They can slow-walk any change they don’t like, cover up or substitute metrics, push back against upper management (to some extent), or deliberately misinterpret orders. This tests the resolve of upper management, and quite frequently upper managers will simply move on to the next thing.
To close us out, it’s worth remembering that change is not inherently good. Change is often required, and there is always some pressure to change, but a poorly executed change is usually worse than doing nothing at all. Success in not guaranteed, failure has consequences, and any organization worth its salt will treat changes seriously and with deliberation.
To defeat the status quo, then, any change has to have met several criteria. It has to present a significantly better outcome than doing nothing. It has to overcome the time and cost barrier to entry. It has to work its way through one of the three change strategies we discussed. And it has to have middle manager champions.
Then, and only then, does a change succeed.
¹An example of a top-down change is something like a new payroll system or a new customer-service model.
²An example of an intervention-led change is a time-and-motion study, or an independent audit.
³An example of a bottom-up change would be something like a manufacturing plant altering an assembly line process due to suggestions from their welding crew.
⁴For more information on management structures and duties, read this.