I had not until recently considered (in any kind of structured way) how significant shocks to the system, like the pandemic, motivate radical change. An article in the August 2021 issue of IEEE Spectrum, What We Learned from the Pandemic—Most of all it taught us how to adapt under pressure, got “the little grey cells” agitated—in a good way. The authors outlined a taxonomy for thinking about how disasters can promote radical change. They laid out four change agents:
- Habit Disruption— this happens when a significant change in the environment causes one to rethink how they do something. A disaster can do this, but the introduction of new technology can too. When we founded Textura, we leveraged several new technologies (especially software as a service, but also electronic signature) to change the way that commercial construction companies pay their subcontractors. The introduction of the Construction Payment Management (CPM) software significantly improved the efficiency of the payment process and made it difficult (if not impossible) not to move to electronic payments. I note that Textura recently crossed the $1 trillion mark in payments made thought the system.
- Selection— this happens when companies will not (or cannot) adapt. There is a weeding out process where these companies (or individuals) are no longer able to compete because the world has changed, and they have not. Sometimes this is voluntary (please notice, I did not say smart), like when U.S. chip makers decided to focus on design and not fabricating, and sometimes it is not, as has happened to so many companies in the auto industry over the past 120 years. The companies that survive do so because they have adapted and can compete, i.e. have made the changes necessary to thrive in and support the new environment.
- Weakening of Inertia— this is another way of saying that the forces that maintain the status quo are overcome by even stronger pressure for change. I would argue that the remote working movement, which had been slowly gaining momentum over the past decade, was supercharged by the pandemic. There is a notion by leaders in my generation that work needs to be done at work. And there was/is an imperative, driven by COVID, that was even stronger and motivated companies that might have waited years (or longer) to implement remote work.
With regard to remote working, I would note:
- That the pandemic motivated companies to jump on board, but technology enabled it.
- The last word has not been written (even in the short term) on what remote work means and what forms it will take.
- Coordination— I see this as suggesting that the “establishment” becomes motivated to get behind change because they see it as necessary to maintain their position in world. The Federal Government’s decision to make domestic chip production a priority combined with Intel’s recent decision to invest in two new U.S.-based Fabs (manufacturing facilities) is an example of two “establishment” players getting behind an initiative (caused by concerns about the availability of chips) to make things happen.
After reading the Spectrum article and digesting the taxonomy that I restate/rework above, it struck me that the world would change for the better if we could institutionalize (within companies, and society as whole) these change agents into the fabric of our thinking and replace the more prevalent predisposition to look back to the past and maintain the status quo at all costs.
I spent the better part of my career working with companies that desperately needed to change. During the portion of that career where I worked at PwC (and its predecessors), we used a process that we referred to as “change management” to help our clients understand the need for change. Many of the principles that were embedded in that methodology are incorporated into the four points that I outlined above. And I would have been very pleased had I had such a clear and concise set of statements to use to communicate with my clients and support me in my actions.
In closing I would note that the authors of the article that prompted this post might not agree with my “summarization” of their ideas, so I encourage you to read the article and draw your own conclusions.
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