Laura Morgan Roberts, Ph.D., is the Co-Founder and Principal of R-PAQ Solutions, LLC, and a Professor of Practice at the University of Virginia’s Darden School of Business. She can be reached at laura@lauramorganroberts.com.

Over 50 years ago, leadership expert and then Harvard Business School professor Paul Lawrence wrote the following about change: “What employees resist is usually not technical change but social change—the change in their human relationships that generally accompanies technical change.”¹ He then explained how inattention to social change, and preoccupation with technical change, creates blind spots: too much attention on the facts of schedules, technical details, work assignments, etc., and too little attention toward the implications of change for social relationships.

Our Perspectives columnists in this issue speak to the technical and social changes involved with building and revising digital playbooks, and in so doing, they highlight the need for focused attention on organizational structures and cultures. As agility refers to a way of being in the present and an orientation toward anticipating future scenarios, leaders must shift away from rear-view, reactionary responses to external and internal pressures for change and innovation. Whether top-down or ground-up, our columnists point toward the tension between hierarchy and autonomy, and offer guidance for embracing agility that includes all stakeholders in addressing the disruption of COVID-19, the ongoing social inequality and injustice of racism and sexism in their organizations, and the unlimited possibilities that technological innovation affords.

 

References

1 “How to deal with resistance to change.” Paul R. Lawrence, Harvard Business Review, January-February 1969.

Christopher G. Worley, Ph.D., is a Senior Research Scientist at the Center for Effective Organizations, and a Research Professor of Management at Pepperdine University. He can be reached at cworley@marshall.usc.edu.

Nothing is certain except that the world as we know it is forever changed. It’s clear we’re not in Kansas anymore when fears of the internet breaking are front and center for businesses and societies alike. Welcome to 2020. 

Corporate, nonprofit and government leaders must accept that many cornerstone assumptions in their business and operating models are at risk of being rendered obsolete given the level of uncertainty across industries and geographies. Constantly challenging macro-environmental factors like COVID-19 (including labor shortages, rising infection and death rates impacting a disproportionate number of Black, Latinx and frontline workers, or government services stretched beyond their capacity), racial tensions in the U.S. and around the world, terrorism, fluctuation in oil prices, natural weather disasters and many other events shorten the shelf-life of companies’ strategies. 

A balance between the competing impulses of hierarchy vs. holacracy requires change-fluent leaders to ponder on this question: How do leaders string together a series of momentary advantages that create business value over time? To answer that question, leaders need to face up to three realities.

First, leaders need to acknowledge discontinuity; the public health reality of COVID-19 means that things are never going to be the same. Change fluency starts with a clear and simple premise—leading organizations in the past was a lot easier than it is today, let alone in the foreseeable future. Traditional organizations had the fortunate luxury of adapting only when rare and relatively predictable changes required it. The recent health crisis and fluctuation in the capital markets offer organizations and the people who lead them a grim reminder that we live in a volatile, uncertain, complex and ambiguous (VUCA) world. Organizations without a strong future-sensing capability are already behind in their capacity to respond to the next discontinuity. 

The velocity of change in today’s deeply uncertain marketplace points to the stark reality that being a prepared organization means being a change-fluent one. Technological disruption, changing customer/user demands, competitive shifts and geopolitical upheaval are not going to stop. They will require the occasional transformation as well as multiple, continuous and orchestrated changes. Within such a context, competitive advantage is fleeting; any current strategy has a limited shelf-life. Future-focused organizations must have the ability to string together a series of momentary advantages by balancing one foot in the reality of today and one foot in the ambiguity of tomorrow. 

Second, leaders must confront the undiscussables. In today’s climate, these undiscussables, more often than not, begin with discussions about racial inequity and the corporate reforms and/or radical transformations required to shift from outdated mindsets and structures to more equitable and inclusive workplaces for underrepresented groups. At such an inflection point in both business and society, leaders must recognize that survival and business relevance means that organizations and leaders can no longer afford to ignore what makes them uncomfortable. Against this backdrop, change-fluent business leaders must challenge the safe and long-held assumptions that have driven their organization design decisions. Building a change-fluent organization means boldly moving away from the policies, management practices and systems that encourage a “set-and-forget” organization. They must begin the difficult task of designing organizations that are both dynamic and adaptive as well as efficient in delivering on current customer and social demands. Change-fluent leaders confront the current structures and processes that reward single-minded, short-term ways of working and architect a design that delivers on today’s objectives and builds future options. There is a big opportunity for leaders to move past limiting assumptions, recognize that hierarchy and holacracy can be complementary, and lay the groundwork for future success.

Third, leaders must understand that their culture can either accelerate strategy or kill it. Today’s society is a truth market populated by people who can choose the reality they want to live in. Each “truth” carries its own set of consequences—positive or not—which precipitate big organizations to act as good citizens more and more. As with any maturation of a society, growing pains ensue and in this case, the result is that the organization and its leaders must contend with environmental, social and governance (ESG) issues. 

In today’s world, organizations must accept that their organizational culture—a product of the design choices noted above—can be a source of change and innovation or the place where strategies go to die. If it’s the latter, it creates a potential avalanche of challenges and risks that can threaten that organization’s existence. Creating a leadership culture forged by the highest standards of ethics and responsibility will be among the defining issues of the coming decade. An organization’s conduct depends on culture and goes far beyond mere compliance to establish the principles, mindsets, capabilities and organization designs required to deliver productive outcomes that balance both ethics and business value. 

As with language fluency, change fluency is real when it becomes almost unconscious. Armed with better signals to align the enterprise around a clear, strategic direction and operating model, leaders can strategically coordinate hubs that create business value and provide meaningful work. They can practice the unique leadership behaviors necessary to navigate a difficult change journey and build change-fluent organizations that are truly agile and sustainable, with integrity. 

The ideas presented in this column were developed with meaningful contributions from colleagues in Google’s Change and Design Forum. 

Rebecca Macieira-Kaufmann is Founding Member of RMK Group, LLC.

No matter how much people want to change, developing new habits takes time and developing new muscles makes us sore. Building a digital playbook is like other transformations: it is a full team sport. The whole team, from the leader-coach to each player, needs to think differently and be all in. Both feet. 

Many older organizations are built on a military command-and-control hierarchy. These organizations excelled at reducing time and motion via large-scale efficiency programs. Many management programs from Six Sigma quality to Keiretsu structures enabled companies to evolve. Yet the digital revolution is not linear, but rather multi-dimensional in changing all areas simultaneously from the customer experience to the middle- and back-shop processes. 

Transformations include a death and a rebirth; people need time to “mourn” then time to acclimate to the new birth. Some will embrace transformation and change readily—you need these people to help bring others along. A leader must understand and engage those at both ends of this spectrum.

The challenge for older organizations is their linear policies that no longer apply to the new work, which is more integrated, holistic and three-dimensional. Digital/agile work requires flexible policies and procedures for employees to be more autonomous in their work and make decisions locally. This new work is often real time. The mindset of agile and adaptable is critical and depends on a learning culture built on a set of pillars to guide the now.

I have worked and held leadership roles in eight companies in five countries over my career and managed teams up to 5,000 strong. In all situations, I have seen that culture matters and technology is the game changer. They are the difference makers. Even more true: leadership matters.

I developed an approach over 25 years in financial services, built on four pillars of management: a culture of excellent execution, compliance and control; a culture of customer centricity; a culture of employee engagement; and a culture of shareholder return. These four pillars allowed the teams in my organizations to know what to do and how to make decisions. Anyone could ask: is this compliant/well controlled? Is it in the customer’s interest? Will employees be able to deliver with excellence and learn/grow? Is it accretive to the shareholder? Armed with these four pillars, team members knew the “guardrails” for decision-making and then could navigate the challenges we faced in terms of these pillars. And they could do so in the interest of helping clients achieve their values, dreams and goals—which was our purpose.

From the bottom up, I have seen productive individuals build bots to do repetitive tasks on their teams and improve the work, only to learn that the individual’s work was shut down by the corporation for not adhering to XYZ policy. Often the bot violated the technology guidelines of the company. I learned that the key is to embrace these maverick employees and learn from them. I have often asked the so-called hacker to hack more. However, I would bring them into a transformation strategy that I would share up the chain so the team member(s) had cover and could invent/hack/experiment/build along our four-pillar culture—better for the employee, better for the customer and compliant, and all to achieve better shareholder return. 

Bringing the maverick into the fold and giving them a sandbox is key to staying ahead of the curve. Without the freedom to invent and improve, this employee will leave the organization—and the organization will miss a chance to learn. The top-down sanctioning of innovation is key. 

I have experimented with two forms of “playpens”: test center and sandbox. Both are good, one is much more expensive than the other. 

I used the test center to replicate an entire end-to-end customer application process—underwriting, onboarding and booking—to get a loan decision in under 60 seconds and disbursed in hours vs weeks. 

I have also worked with sandboxes where we let small teams re-engineer a process entirely digitally first on a whiteboard and then in small areas at a time to improve a process from end-to-end for a customer—reducing the time to book by 80 percent with improved data quality metrics. The sandbox could run in parallel to existing processes via “cutouts” for a subset of applications. 

The transformation to digital requires re-thinking the experience end-to-end so that not only the customer interface is digital, but also the whole business can operate digitally. COVID-19 is accelerating this in ways that can be immensely helpful to the customer via allowing choices that don’t require face-to-face interactions. The tension of bottom up and top down is good for driving change through an organization for a better experience for all stakeholders.

Kerry Van Voris is Chief People Officer of Oscar.

When first starting out, CEOs of startups are hyper-focused on making their vision a reality. But when a company experiences hyper-growth, founding CEOs face new challenges: how do they scale the business—and their leadership team—to support growth, employees and culture? How do they apply the lessons they’ve learned to unprecedented events like a pandemic? And how can they leverage digital tools to both scale the organization and respond to crises?

When I joined Oscar in the fall of 2016, the company was on the verge of hyper-growth. Since 2017, our membership has increased by over 400 percent, our revenue has gone from $340 million to $2.2 billion, and we’ve doubled our headcount. As Chief People Officer, I’m proud to say we now have 1,400 employees delivering on Oscar’s vision of making healthcare affordable and accessible.

I did not start my Oscar journey as part of the C-suite. I’ve had the incredible opportunity to grow with the business and alongside Mario Schlosser as a leader. During this time, we’ve identified ways to scale his role as CEO while keeping his heart and mind infused throughout the organization as the company itself scaled, too. Three key tactics—guided by our north star of using technology to create a better healthcare experience centered around each unique member—have played a critical role in initially managing Oscar’s rapid growth, and in subsequently navigating the complexities of 2020. 

COVID-19 has forced businesses to rethink models, priorities, organizational structures and timelines in order to meet goals and support employees. Oscar is no exception, but we have the advantage of our learnings from the past eight years of leveraging digital tools. Schlosser and I have applied these learnings to how we approach the pandemic as an employer, and the larger leadership team has applied them to how we support our members. 

Healthcare is a complex, highly-regulated industry—yet Schlosser started Oscar with zero healthcare experience. He relied on his background in data and computer science to help him learn about every piece of the space while building the business. For us, data is key. Schlosser has favored a culture that requires that business decisions be broken down to every single data point. In response, we’ve found ways to create a consistent line of sight into data across the company so that everyone at Oscar has transparency into the business and can make efficient decisions with confidence.

Since day one, Oscar has combined its data-driven approach with technology to create a better healthcare experience. Schlosser and his fellow founders believe that this blend of mission and tech drives both demand and growth. That is one of the reasons why, for example, Oscar has always offered telemedicine at $0 to our members.

In the case of COVID-19, tracking data gives us a live pulse on the pandemic and drives our business decisions. Oscar was positioned to respond quickly, because the tools we’ve built can easily handle reconfiguration and can iterate efficiently. This enabled us to develop some of the country’s earliest COVID-19 tools—like our risk assessment survey and testing center locator—and helped us keep our employees informed, safe and healthy. As a healthcare company with digital-first customer service teams, we were able to track real-time mentions of COVID-19 by our members, leveraging them as a leading indicator of state closures and potential stay-at-home orders.

This direct line of sight into data about the disease’s progression served as a proof point for Schlosser as to why we needed to prepare early for the possibility of remote work, equipping our employees with technology, resources and more. Transitioning to a fully remote workforce is challenging, so we proactively scenario planned and prepared early on, which allowed us to move thoughtfully, quickly, when we needed to. By holding ourselves accountable to our foundational data-driven approach and mission, our leadership was able to quickly make decisions that resulted in business benefits. 

An important topic Schlosser and I focus on is making the most of his time spent with employees. There comes a tipping point in CEO interactions where you get negative leverage on the experiences—meetings may be repeatedly pushed or there may not be enough time to prepare for company presentations. As we scaled, we began to emphasize the quality and value of each interaction, leveraging our digital-first approach.

So how do we apply this to Schlosser’s leadership and time? One example is our company-wide all-hands meetings. These began as weekly sessions Schlosser hosted with the company, but as we scaled, we decided that the better cadence was every other week. 

Now that we are operating in a remote environment, we’ve found weekly virtual all-hands with updates from Schlosser and the leadership team, in addition to designated office hours with Schlosser that anyone can join, to be valuable to our employees’ connection to leadership and their accelerated adoption of digital communications. 

At the rate Oscar is growing, we have to anticipate and embrace change. Further scaling our leadership team and ways of working will require continued prioritization. It will be challenging and at times uncomfortable. 

In response to the pandemic, many organizations have been forced to drastically shorten timelines for innovation or make changes and decisions they never anticipated. As the leader of the talent and HR team at a company founded on disruption, I know one of my learnings coming out of the pandemic will be holding myself accountable for optimizing for insights as we plan for the future—including those that will help Schlosser continue to scale.

We know that delivering on our mission to our members and our employees is the only way to succeed. No CEO—nor any CHRO—can do it alone, so together we embrace the discomfort of scaling our overall leadership with the company, knowing that we’re doing the right thing so long as we stick to our foundational values and digital approach. After all, as a healthcare company we have to remember that a body can’t function without its mind and heart—and a little soul never hurts.