Avoid This Common Organizational Transformation Mistake (And What to Do Instead)

Is your organization kicking off or in the midst of an organizational transformation? Are you shifting from outputs to outcomes or working to adopt the product operating model?

If you answered yes to any of those questions, keep reading.

Hope Gurion and I recently kicked off a new series on organizational change. In our first installment, we discussed how to know if you are ready to change. If you missed it, be sure to start there.

Today, we’re sharing one of the biggest mistakes we see companies make when it comes to transformation, exploring why this happens so often, and offering our advice on what to do instead.

You can watch the video of our discussion or read a lightly edited transcript below.

Full Transcript

Teresa Torres: Welcome, everybody. I am here again with Hope Gurion. We are adding to our series about organizational transformations.

In our last video, we talked about how to tell if your organization is ready for a transformation. We looked at a couple of things that need to be fulfilled at the CEO level. Once those are in place, today what we’re going to talk about is what companies tend to get wrong.

We see a really common pattern where they’re ready to kick off their organizational transformation, moving towards outcome-driven teams or, in Marty Cagan’s language, moving towards the product operating model. And we see companies make a pretty common mistake. So we’re going to dive into what that mistake is and then what to do instead.

Okay, Hope, do you want to dive in? Tell me a little bit about what this pattern is that we see around: We’re ready to kick off our organizational transformation. What are most companies doing that we don’t recommend?

Hope Gurion: Let’s train everybody all at once.

Teresa Torres: Yeah, we see a lot of management consulting firms recommend this. It’s an easy thing to put on a swim lane. Okay, we’re excited. We got everybody excited about where we’re heading; this is the future. Why not train everybody?

Training Everybody All at Once Rarely Works and Often Leads to Resistance

Hope Gurion: The reality is that it rarely works. So that’s the biggest reason why not. Usually, it’s because there’s going to be quite a bit of resistance. When you do this broad training, it’s a mandate, everybody’s getting it, and yet not everybody is going to be able to put it into practice immediately.

It can create a lot of confusion. And that confusion turns into resistance. It’s this big bang change that not everybody can take action on, not everybody is ready, willing, able. And so it just tends to not get its intended results.

Teresa Torres: I think it would probably help for us to talk through specific examples of what we’ve seen because it seems so intuitive. We’re trying to make this change as quickly as possible. We’re going to commit to this. Why wouldn’t we train everybody?

I think one thing that you mentioned that really resonates is it creates a lot of chaos. We’re taking an organization, we’re saying we’re going to completely change everything overnight. We know from change management literature that this just doesn’t work. It’s hard. It’s messy. It creates a ton of chaos.

I think there are two things that you hit on that I want to dive deeper on. One is: Not everybody’s ready for that change. And then the resistance that comes up as a result.

Do you have a couple of examples you can share? What types of teams might not be ready for the change?

Hope Gurion: It’s often very well-intentioned. It’s like, we’re trying to be equitable. We don’t want to have some haves and have-nots, and if we’re committed to this, let’s just go all in. That’s usually the thinking.

The reality is, there’s a lot of WIP—a lot of work in flight currently—that may be close to being finished. There may be skills gaps on the team. There may be high-integrity commitments, contractual obligations. There could be lots of reasons why people can’t mentally absorb the training, let alone put it into practice. And so it can feel like a distraction and create that confusion for the people who are not ready.

Teresa Torres: Teams that are two months into a six-month replatforming project, or they’re a month into building a feature that’s contractually obligated at the spec level. We would argue there’s still discovery that could be done there, but especially in an organization where culturally that’s not been what’s required, and they have a high-commitment date they’re committed to, you say, okay, now take 12 hours of your life, come to training, start interviewing customers, and their reaction is “Why? You’re taking me away from this deadline that’s already going to be hard for me to reach.”

Hope Gurion: And a lot of companies seeking to make this change have had deadline-driven cultures. And so now you’re telling me to do something that’s going to put that deadline at risk, and it creates a lot of confusion and resistance.

An Important Lesson: Not All Teams Are Equally Ready for Change

Teresa Torres: One of the key ideas here is that not all teams—we talked about organizational readiness for change. In a single moment in an organization, not all teams are equally ready for the change. And one thing that I love from the change literature is this idea of creating bright spots, which we’re going to talk about in a minute. But it’s how you find the teams that are most ready to change and use that to build momentum in the organization.

This idea of rolling it out to everybody—some of the teams are going to take to it, but you’re going to have a lot of teams that are just not ready for it yet. So this idea of team readiness is really important.

Hope Gurion: And maybe I can give another example of one situation where a team might not be ready, and this might be across teams.

We talked about commitments to existing work, contractual obligations, replatforming in progress, things that they don’t want to put at risk. Another is just the managerial accountability structure that is in the organization, where people might be managed on an individual performance review basis or managers—we haven’t changed anything about what the expectations are about how a person or a team is evaluated.

And that creates more confusion within the teams and within the organization, because managing by outputs and deadlines is very different from managing by outcomes. And so when that isn’t addressed and you just start training everybody, inevitably the teams are going to say, “But my manager is not wanting me to do what you’re telling me the training is that I should be doing.”

Resistance Is a Common Reaction to Change

Teresa Torres: We actually see this a lot. It sounds funny—you get brought in by a C-level executive or a VP, you would think all those middle managers are going to be all aligned, but it’s not what we see in practice.

It takes time for that C-level leadership or that VP to build that alignment internally. And if we jump to training everybody, now the teams are hearing very mixed messages and it contributes to the chaos.

This is actually a great segue to our second topic around this, which is resistance, because oftentimes teams resist the change because they’re being told two different things. So their VP is saying, “Adopt this new way of working,” but their manager is saying, “No, build what I told you to build.”

Hope Gurion: And what’s a person to do?

Teresa Torres: This is the one I’ve seen the most. Let’s talk a little bit about resistance, because I think we see when we do training across an organization, there’s resistance at the team level, there’s resistance at the middle management level. We’ve also seen resistance with these support teams, whether it’s product ops or agile coaches or program managers.

Talk a little bit about how resistance shows up when we’re training the whole team at once.

Hope Gurion: This is where a lot of people are likely going to be either fulfilling their job descriptions, what their manager told them to do that might contradict what’s recommended in the training.

We also have people who have jobs that are tied to output, deadline-driven cultures. Program management is a great example of that.

It can also feel like a loss of power. If you have to do the things that the sales team promised in a contract, or you have to do the things the support team gets a line in the queue of things that have to be built, there’s this potential power struggle, and that creates resistance as well, because they’re not clear. Did I just lose power because you did this training?

So sometimes the causes of the resistance are clear and sometimes they’re not so clear, and you need a leader who has seen the things that can resist change to help piece it apart to know how we’re going to mitigate the risks and the reactions as we approach this transformation.

Teresa Torres: And I think this is one of the challenges with company-wide training. I know we’ve both seen this in different organizations. A few examples are coming to mind—like, we both worked with a company where we did training across the board, but they had a lot of old-school product managers and there was team resistance. I remember one guy specifically said, “I’m old school, Agile doesn’t work for me.” And we weren’t even talking about Agile, we were just talking about discovery!

And that’s team-level resistance, but I can think of another company that we worked with where the resistance was coming from a team responsible for coaching and training the teams, and they felt threatened. They were like, “Why can’t we do this ourselves?” But they didn’t have the skill to do this themselves.

And then I worked with an organization where I coached teams for a long period of time, and the resistance came from the middle managers because nobody was working with them on how their role would change and why they felt like their ideas didn’t get to be heard. And their ideas should get to be heard.

There is this balance. It’s not that stakeholders no longer get to have ideas. And so I think the challenge with cross-company training is that all of that resistance is bubbling up at the same time and it creates a ton of chaos. So let’s transition a little bit and let’s talk about what we recommend companies do instead.

Limit Chaos and Friction by Creating a Few Bright Spots

Hope Gurion: All these friction points are going to show up. You just don’t need them to all show up at the same time, because for a leader, it’s really going to hurt your credibility. It’s not going to expedite the change; it’s actually going to delay the change.

In order to expedite moving to that transformed state that people want to get to, you want to create a bright spot for others to follow. And that can come in the form of a pilot team or ideally a few pilot teams.

Pilot teams can be the proof point of what this new, outcome-oriented way of working looks like in practice. It shows that it’s possible here. It also exposes what we need to address internally in order for this way of working to succeed.

And sometimes that could be skills gaps within a team that need to be addressed. It could be missing roles on a team that need to be addressed, like missing skills that are actually filled by an entire role. It could be ways of managing teams and setting success metrics for them. And it could be this power struggle or it creates friction with these other groups who aren’t aware of, don’t understand, don’t support this way of working. These pilot teams create a lot of goodness and expose—at a manageable level—the points of friction or resistance that need to be addressed in order for this to scale.

Teresa Torres: Let’s dig into this a little bit. This idea of bright spots I really love. This term comes from the book Switch by Chip and Dan Heath, and it’s a book all about how to manage change.

One of the most common forms of resistance whenever change is happening is of the form “that will never work here.” And when you create a bright spot, you’re basically saying it does work here. And you’re limiting the chaos.

You’re basically saying instead of doing this for everybody across the board, we’re going to pick a handful of teams that we think have the best potential to become a bright spot, to show this can work here. And even our best, highest potential teams for working this way are still going to encounter obstacles, there’s still going to be resistance, but it’s a smaller scope. So we can start to manage it in a smaller realm before we roll it out to everybody. And so it really helps with containing the chaos.

Let’s remove that resistance of “it could never work here.” Let’s use these pilot teams to learn what else in the organization needs to change to support this way of working. And then it allows you to learn and be able to—when you’re ready—roll it out to everybody across the organization. Then you’re in a much better position to do so because you’ve gotten ahead of the resistance. You’ve created an example of what good looks like in your own organization.

Hope Gurion: It also follows the principles that we recommend when teams are building new products. We don’t want to build it, roll it out to 100% of our customers, and hope it works. It’s much more of—let’s try something, let’s see what our assumptions are about whether this solution will work, let’s figure out whether or not those assumptions are true.

If they’re not, can we change the solution to make sure that those assumptions are true? So it’s the same principles to make sure you get that product-market fit within your organization for this way of working.

Wrapping up: Remember to Start Small and Iterate

Teresa Torres: Okay, so it sounds like what we’re recommending is: Don’t start with this whole organization chaotic training. Identify a couple teams, a handful of teams. The number of teams probably depends on your organizational size. If you’re tiny, you could start with one team. If you’re a large organization, you might start with a group, a tribe, whatever you’re calling it.

And in our next video, we’re going to get into: How do we pick those teams? But for now, the main takeaway of this video is: Start small, iterate, use this to control the chaos, because all change is chaotic.

All right, Hope. Thank you for joining me in this. This has been a lot of fun. Hopefully it’s helpful for folks.

The post Avoid This Common Organizational Transformation Mistake (And What to Do Instead) appeared first on Product Talk.