Strativity Group CEO Lior Arussy On Why Constant Change Is The New Normal

arussyStrativity Group CEO and cofounder Lior Arussy knows that change isn’t just something business leaders adapt to—it’s the new normal. For CEOs and their employees, the days of stability and predictability are a thing of the past, and constant change and upheaval across the business landscape is just reality.

In his new book out today, “Next Is Now: 5 Steps for Embracing Change—Building a Business that Thrives into the Future,” Arussy shares his five-step “Future Ready Impact” program, and guides change-impacted CEOs and their employees from a victim mentality to one of participation and ownership.

Chief Executive spoke with Arussy about how organizations are dealing with resilience to change, why employees need to lead the charge in change transformation and what the future holds for businesses in this new business ecosystem. Here’s what he had to say:

The lowdown on “the new normal”

Let me start with the study that we released in the book that we had done with Harvard Business Review. We talked to 422 companies and asked them about the success of their different types of change initiatives, and the reasons why they didn’t succeed. To our surprise, 91% have declared their change initiatives as a failure, something that didn’t meet their original goals. They needed to redo them, probably down-scope them, and change them. And if you change the word “change” with the word “strategy,” because, usually, a change initiative is about implementing a strategy, you are chasing a very, very dangerous mandate here.

Basically, companies are coming up and CEOs are developing strategies to survive and to thrive into the future, and 91% of those are not achieving their goals. Which means that organization’s survival in future is at risk, because they are fighting against forces that are trying to hold back the organization in old and less-relevant market positions. And that is why every CEO needs to go and check, not the quality of their strategy, but the quality of their readiness for change, or what I call the new core competence of organizations—change resilience. The scale and the scope in which you actually execute and embrace the initiatives. That’s why it’s so critical, because it’s at the essence of the organization, being able to be relevant to today’s and future customers.

Taking ownership of change initiatives

Looking at over 200 transformation projects around the world, here is what we learned: A strategy’s success is not dependent on the CEO’s decisions, and leading a strategy from the top down is not going to accelerate anything. Instead, what the book is advocating is what we call “employee-led transformation.” You see, the success of the transformation, the success of the strategy, is in the hands of the people who are working for you, and they’re the ones, in the daily decisions, who are either activating it or deactivating it.

What we found out is, because of a lot of misconceptions around change and around transformation, employees are wasting their time rejecting it in a very, very creative way. In fact, in the book I name six different personas of change rejection, which will be fascinating to see. People are very, very creative when it comes to this, and as a result of it, are basically holding the organization’s future hostage because they are refusing to adopt. They don’t have a high change resilience. There’s a very low change resilience, and the people’s reaction is, first, no.

I’ll give you an example: I remember working with a financial services organization, and one of the employees in a focus group said to me, “Look what the CEO is doing to us now with all these digital platforms.” And I said, “Stop for a second. What is the CEO doing to you? Did you ever stop to think that maybe Facebook and social media happened to your CEO in the same way that it happened to you? Yeah, maybe he sees the same exact trends, but the difference between him and you, or her and you, is that he took action and tried to do something about it, and you are trying to take all the excuses possible to stop from taking action.” What we’re introducing here is the need to treat every employee as they are the CEO, engage them in a structured decision process that has them own the transformation, not just execute the transformation.

The future of change resilience

I think that one of the new criteria that you’re going to have to incorporate into our hiring of our new talent is change resilience. Let me give you an example from an industry that we are very involved in, the automotive industry. The automotive industry right now is facing a variety of trends. Autonomous driving is coming, electric cars are coming in larger numbers, subscription is on the horizon, we’re talking of not even owning a car anymore, and of course the sharing economy. And given the multitude of organizations trying to forecast with a crystal ball what’s going to happen, until they know it, they freeze and they basically wait until the answers are provided for them.

With change resilience, I will tell you that the future will belong to the ones who are willing to experiment, who are willing to embrace successes of the others and not wait until others do it. And the two defining success factors are not going to be the quality of your product or the amount of inventory that you have, but rather the depth of your knowledge of your customers and your ability to change your business to respond to those evolving changes. This is a completely different change, a different value proposition from being in the metal business, to really becoming the memories business. So, when you look at the future, companies will have to incorporate into their hiring and nurturing criteria the notion of, “How do I keep my talent change resilient, so we embrace those things faster, we can experiment faster, we can fail and move forward faster, but ultimately we’re going to stay ahead of the curve and own the future and be future-ready?”