Klaus Schwab, founder of the World Economic Forum in Davos, Switzerland, is among those who believe the coming business transformation will be on a par with the vast changes brought about by the steam engine, electric power, and the introduction of computing.
Schwab identifies several ways businesses will need to change to survive in this new era:
- They must look “outside in” to embrace the developments outside their industry that have the potential to radically change what’s happening within it.
- They must create internal cultures of innovation willing to embrace rapidly-changing ways of doing things.
- They will need to “resist short-term thinking” and keep focused on the long-term changes that these technologies can bring to their business.
Schwab argues that the profound nature of technological developments in areas like artificial intelligence and genetic engineering will require business leaders “to draw deeply on their values and those held by their employees and stakeholders to both navigate and shape” this new industrial revolution.
Three Factors That Define Organizations Ready for Change
First, effective leadership is in place at all levels in the organization. Your organization may have excellent pay, benefits, and employee-friendly policies, but if incompetent leaders are in place, your team will not be motivated to adapt and change.
Second, your people are personally motivated to change. Change happens when people are sufficiently dissatisfied with the status quo and are willing to make the effort and accept the risks involved in doing something new.
Third, your company culture is accustomed to collaboration. Effective change demands collaboration between willing and motivated parties.
Six Techniques for Fostering Change in Your Business
Here they are:
- Share information freely. Information is the lifeblood of any organization.
- Help people see why the change is necessary. During times of change, getting and disseminating information is critical to operating effectively, flexibly, and quickly.
- Encourage participation within your team. Allow others to make informed decisions, rather than imposing your own. This will increase employee autonomy and empower your team members to do their best work.
- Make communication a two-way process. Talk but also listen, especially to people who are resistant to change.
- Get into the trenches with frontline employees to better understand the day-to-day issues they face.
- Push decision making down to the lowest levels possible. Give people practice in collaborative work between functions by tackling problems and assigning projects through cross-functional teams.
Change is part of the new normal. Outperforming leaders will be those who help their people get ready.
Although creating a culture that is ready for change is not easy, it will be worth it.