Why Can’t Organizations Change? vol.1
By: Bunshiro Ochiai
Tags: Leadership Development, Leadership, Entrepreneurship, Organizational Change, Organization

My last post was “Why Can’t Leaders Change?” In this post, we’ll discuss “Why Can’t Organizations Change?”

▼ “The mindset of upper management has not changed and we are unable to take new initiatives.”

▼”Interdepartmental coordination is required to do anything, and I’m stuck”

▼”Old-fashioned structures and systems are becoming a shambles, but they are difficult to change.”

▼”I have my hands full with what I’m doing now, and I can’t take on new initiatives even if I wanted to.”

▼”We know we have to do things like digital transformation (DX), but we can’t move forward as an organization.”

I’m sure there are more than a few of these thoughts and opinions in your company or organization. I am not exaggerating when I say that there is not a time when I don’t feel these things myself, and I face them every day.

Two kinds of inertia in an organization

It’s been said that “organizations have inertia.” It’s a term that often comes up in the context of the fact that organizations don’t change easily. Inertia is a term originally from physics. If there is no force acting on a stationary object, the object will remain at rest. If there is no force acting on an object in motion, it will continue in constant velocity linear motion. This is the law of inertia in physics.

When this concept is applied to organizations, I think it is expressed as “an organization has inertia” when the organization as a whole tries to maintain the same mechanisms, systems, and practices as before.

When people ask why organizations can’t change, the answer is “organizations have inertia, so they are difficult to change,” which I think is true. However, I don’t think it’s often mentioned that there are two kinds of inertia here.

What do I mean by the two types of inertia?

One is “visible inertia,” such as structures, systems, behavioral habits, and organizational routines. To take a more concrete example, the human resource system, organizational design, role allocation, how to conduct meetings, how to conduct sales, and how to communicate are all examples of “visible inertia”.

There are certainly aspects of “visible inertia” that are difficult to change. To take the example of the HR system, if a manager says let’s change the HR system tomorrow, there will be confusion about the sudden change in most cases.

Let’s say that when employees are working under the current HR system, and that system suddenly changes. Many people won’t be able to keep up with the changes in the assumptions under which they work and will be confused as to what they will be valued for, what their salary will be, whether they will be able to be promoted, what their benefits will be, etc.

However, while changes related to “visible inertia” can be easy to confuse and difficult to work with for such a rapid change, there is also the aspect that it can be changed if you take the time to carefully consider how to make the change.

To use the example of the HR system mentioned above, if the need for change arises from management or organizational issues, it is possible to implement a change in the HR system by carefully examining the concept of the new system, designing the details of the system, explaining the concept, and taking the process of implementing the system carefully.

In fact, I believe that the other inertia, “invisible inertia,” is the essential factor in why organizations cannot change. By “invisible inertia,” I mean invisible values and culture, like organizational culture or shared values within an organization.

If you’ve read the previous article whose theme is “Why Can’t Leaders Change?” , I’m sure you’ll find something that rings a bell. In that article, I talked about two types of challenges, technical challenges and adaptive challenges, which are actually closely related to this content.

First, let’s review the technical and adaptive challenges. In the previous article, we defined them this way.

Technical challenges: challenges that cannot be solved with the technology and knowledge currently possessed, but the technology and knowledge needed to solve them exists and can be solved by using them. Adaptive challenges: challenges that are difficult to solve with existing models of thinking and require changing or letting go of some of the traditional values and beliefs.

The “invisible inertia” of an organization is exactly what I mean by organizational adaptive challenges. And because it is a challenge that requires changing or letting go of some of our values and beliefs, I think it is very difficult to change or alter.

Adaptive challenges as an organization

As one specific example, I’d like to talk about an adaptive challenge our company (Alue Corporation) recently faced as an organization.

Our company has had a strong background in training new employees for large corporations. We believe that our ability to customize and combine our customization capabilities with large scale operations that maintain quality (e.g., dozens of simultaneous classes per day) is why we are the company of choice.

Around 2015, we launched a vision to challenge the management development market. In the context of new employee training, managers are extremely important in creating an organization that nurtures newcomers and young people, so it was natural for us to turn our attention to the development of management positions.

We then began product development, marketing and sales for management training. We knew we wouldn’t see immediate results, but we were struggling more than we expected. We have existing customers who have introduced training for new employees and young people, so they can listen to our ideas about management training, and we have opportunities to make suggestions and proposals.

But we can’t take orders. Initially, we thought the product might not meet their needs, so we reviewed the product content and developed assessments because we thought assessments were essential for management training. In sales and marketing, we conducted internal sales training, strengthened our marketing efforts, and went through a variety of other trials and errors. Even so, we were unable to find a breakthrough.

Recently, we have been able to take on large corporate clients in managerial development as well as in newcomer development, but the tipping point was the realization that for us, taking on the managerial market meant facing the adaptive challenges as an organization.

What were the adaptation challenges for our company as an organization?

When we provide training for new employees or mid-career employees, our premise is that the customer has clear issues and we are there to provide solutions to those issues.

For example, in response to the issue that there has been a lot of turnover of young people recently, or that young people’s motivation has not been increased, we suggest that young people learn the attitude and skills to find opportunities in their work, and at the same time, we suggest that managers and OJT trainers learn the attitude and skills to connect the intentions and thoughts of young people with their work by observing how young people work and communicating with them openly.

This approach is effective in training new and younger employees, and is supported by our clients. However, the values and beliefs behind this basic premise did not work as it was in the training of managers.

Until then, the values and beliefs that had been the norm at our company were based on the principle of “Our customers have clear issues, and we need to identify them. The value of our company was to identify the issues and provide high quality solutions to those issues. We saw ourselves as a “solution provider (vendor)”.

Adaptive challenges include the transformation of the values and beliefs level

Depending on the topic, this assumption does not hold true in management development. Managerial development is directly related to organizational issues, and organizational issues are directly related to management issues. For example, if a new mid-term management plan is formulated and a policy is set to increase sales by XX% in the global domain and to enter new domains such as digital domain, then naturally, it will be developed into organizational and human resource development issues such as what kind of organization to build and what kind of human resources to develop.

The target of organizational and human resource development issues is all employees, but managers are expected to play a core role in these issues. In other words, management development is the embodiment of management and organizational issues.

As I said in my first article, management is the integration of contradictions, so there is no clear answer to management and organizational issues. Therefore, there are no clear answers to management development either. Not only there are no answers, but the issues are often not clear.

While we don’t even know what the issues are or what the challenges are, we need to think about the issues together with our customers. On the other hand, we can’t keep worrying about it without taking action, so we need to come up with the best hypothesis at the time and implement it as management training. Issue setting and solution implementation are a continuous process of groping in the dark, trial and error.

In such a situation, the values and beliefs should be “a partner who thinks about the customer more than the customer, who shares their concerns, who considers the challenges and their solutions with the customer, and who works through trial and error with the customer”.

Our previous values and beliefs: A solution provider (vendor) who finds out the customer’s issues and provides high quality solutions to those issues.

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Our current value and beliefs: A partner who thinks about the customer more than the customer, who shares their concerns, who considers the challenges and their solutions with the customer, and who works through trial and error with the customer.

Summed up in this way, it may seem simple or straightforward, but in fact, such a difference in value levels seems to be the difference between heaven and earth in the sense of the people involved.

I’ d like to talk about how big of a gap this is and how to overcome this gap in the next article.

Here are the quests of the day. (If you’d like, please share your thoughts in the comments.)

・What organizational adaptive challenges, if any, have you faced in your company, organization or school?

・What organizational value and belief level changes were required in the above adaptive challenges?

Bunshiro Ochiai