Today’s Businesses Must Be ‘Made for Change’—But Where to Start?

Today’s climate is one of constant change. If business leaders weren’t already comfortable with that notion, the last few years have made it impossible to ignore—the pressures of the pandemic, supply chain issues, evolving consumer preferences, global unrest and cresting inflation have created a landscape in which companies must embrace flexibility, adaptation, and perhaps more risk than they’re used to. I call this transition becoming “made for change,” and evidence suggests it may actually be the lower-risk, higher-value strategy for businesses to adopt. Adaptive organizations grow at three times the rate of their more rigid counterparts, according to Forrester, underlining the fact that flexibility is not just a buzzword, but a business strategy worth pursuing.

Happily, becoming made for change doesn’t involve an organizational overhaul or laborious five-year plan: in fact, it is best done by adopting a little and often mindset. When team members at all levels adopt such a mindset—by deploying small changes regularly, gathering feedback, and adjusting course as needed—this flexibility becomes imbued throughout the organization and sets it up to be made for change.

Before delving into the logistics, let me give a brief real-world example: The global chip shortage during the Covid-19 pandemic significantly impacted car production. Companies with hardened assembly lines (and mindsets) had trouble flexing to adjust to the shortage. But others, like Tesla, had an adaptive, little-and-often mindset to begin with: without the constraints of a fixed chip type, the company deployed incremental software updates to accommodate alternative chips seamlessly during changing conditions. This mindset, which includes a willingness to test, learn, iterate on products, existed across the company before the pandemic and positioned it to flex right along with the changing pressures of Covid-19.

As mentioned, every employee in an organization can embrace a little-and-often mindset—and it begins with leadership. If the c-suite expects staffers to adopt a change-forward approach, they must not only live it themselves, but also help cultivate it in their employees, by investing in their employees’ core competencies—clusters of related skill sets, knowledge, and traits that foster work habits. There are certainly other elements in becoming made for change, but fostering employee competencies is arguably one of the most fundamental. It’s a little like cooking: Your employees are like chefs, who must be provided the highest quality ingredients—competencies—and the agency to mix and match those ingredients in different and creative ways.

From where I sit, there are 11 behavioral competencies to consider, but a few are most relevant to nurturing a made-for-change mindset in your employees: critical thinking, which involves absorbing new information and identifying opportunities to iterate and improve; hypothesis formulation, where testable ideas are brought to the table, often with collective organizational knowledge; the ability to test and learn, where small changes are tested regularly, results measured, and strategy adjusted; and reasoning through ambiguity, which involves applying information and past experiences to navigate uncertainty.

These four competencies should be intuitively important to foster in employees, but as a leader, where do you start? From the most concrete to most cerebral, the steps to practice are:

• Build your team’s data literacy. Leveraging analytics and extracting insights always comes first. Your employees must have access to the building blocks to create action.

• Employ agile project management. The “agile” strategy divides tasks into short phases of work, where teams analyze progress frequently and adapt plans regularly. Agile teams reflect, think critically, and formulate hypotheses at regular intervals. This is why embracing Agile ways of working also leads to more agile ways of thinking.

• Reinforce psychological safety. Your employees need the space and reassurance to think critically, formulate hypotheses, and test and learn. A psychologically safe environment is one where employees are not only allowed, but encouraged to think critically and creatively, and test their hypotheses in real time.

• Play out scenarios. In considering the unexpected and playing out those possibilities, you develop muscles of little-and-often change that kick in when you need them most. You can take scenario play a step further by embedding scenario thinking as a formal discipline in strategic planning and design.

Increasingly, successful businesses are setting themselves up for flexibility in changing times, and I believe we’ll see even more robust evidence of this in the coming years. I often tell leaders that their workforce is both their greatest opportunity and greatest inhibitor.

As important as it is to support employees’ competencies, our research also suggests it’s valuable to hire employees who are curious, flexible and open to change from the start. These folks will improve their competencies regularly, whereas those who believe they are experts out of the gate can inhibit flexibility and stall change.

In this era of evolution, it’s imperative to value progress over perfection—and remember that your people and culture are the central drivers of a made-for-change future.