Resist the temptation to change

The world is changing at an unprecedented rate, and what is your business doing to keep pace? Open any commercial publication and you can almost see the above sentence, or something similar. These words are so familiar that we hardly notice their existence. But what do these words mean? The answer is: the meaning is superficial. And that's exactly the problem.

Many people believe that we are going through unprecedented change, a belief that has existed at many times. The past always seems more stable than the present because we are more familiar with the past.

However, at any time in the past, you may find periods during which the entire world seemed to be in the midst of unprecedented change: the collapse of the Roman Empire, the colonization of the Americas, the Renaissance, the Reformation, the Enlightenment, and Europe the Industrial Revolution, and two world wars. Over the past 400 years, the shift from seeing the world from a religious perspective to a secular perspective has had and will continue to have a major impact around the world. The global trends and technological advancements of recent years also seem to pale in comparison.

So there is no reason at all to think that today's change is bigger than it was in the past, or that we are the first to experience "unprecedented" change. Who is to say that the revolution brought about by the microchip must be faster and farther than the revolution brought about by the printing press?

Globalization is considered the "crown jewel" of unprecedented change, but even globalization is not as pronounced as we might think. Some economists have demonstrated in different ways that the world today is not as globalized as it was at the height of European empires at the end of the 19th century.

Building skills to maintain stability

Why are these situations important? This is certainly not intended to make some kind of academic point. You might think that talking about social and historical changes that are a thing of the past has nothing to do with pragmatic business people. However, many business leaders and policy makers accept precisely as common sense that the past has been replaced by the new era.

The reason why this view is so unhesitatingly accepted is that businesses are afraid of being left behind. It's no coincidence that people who benefit from this fear keep peddling it. If you're trying to sell a change management solution, one way is to make your potential customers feel like they're stuck so they have no choice but to buy your product. When we unthinkingly accept the cliché of "unprecedented" change, we're already on the verge of a predicament.

This shows that most managers and leaders today do not place much emphasis on one of their core skills, the skill of maintaining stability. The art of managing a business is persistence, balancing continuity with change. But if we have a hysterical mood about change, we cannot maintain the stability of the enterprise. It's easy to make the classic logical error that change is necessary, and this is a change, and therefore this change is necessary.

The idea that any change is a good thing hurts. Such thinking continually undermines the principles of rational management. An example of a rational management principle is cost effect analysis. The expected benefits of business change may be tempting, but have we considered the costs? In fact, the reality is often that a new round of change has begun before the results of previous efforts have been fully realized. In this case, can we still calculate the cost? And to the model for calculating the cost of change, we must add one of the most disturbing, but also the most difficult to quantify, phenomena in today's business: "change fatigue." Has there been another change? Regrouping again? This phenomenon can quickly demoralize employees and lead to turnover, loss of confidence, and a lack of accountability.

However, what every manager has learned is that people "resist change in a very irrational way" and that must be addressed. This is actually nonsense. Suppose you come to the office one morning and announce a 10% raise for all employees. Will anyone resist this change? of course not. People resist change only when it threatens their interests, not because it is. The question we are asking is not how we can overcome change fatigue, but how do we address the root causes of change fatigue.

Perhaps the solution to this problem is not to make changes.

Understand the true impact of change

You might say that while change may threaten personal interests, it is necessary to make changes frequently for the good of the business. Maybe so. However, there are many changes that do not benefit the business, according to well-documented failure rates of change management programs. Employees resist change because they know the business better than management. Don't assume that employees resist change to protect their own interests. Maybe they know better than you what customers want.

This should be obvious, since "tacit knowledge" is a buzzword in recent management thinking. The meaning of the word is that, in fact, employees know all the useful knowledge about the company, but this knowledge only exists in their minds. The key is to make it useful to the business by taking this knowledge, organizing it, and sharing it in a way that benefits the business. "Organizational learning" has always been a powerful tool, but why do we throw this out of the blue when we talk about change? If we develop the mindset that resistance to change is a problem that needs to be overcome

, we may be missing something important, which is what employees know about the real impact of change, and the impact on those impacts knowledge is based on practice. Every savvy business leader knows that the best plan at the top may not match the reality at the bottom.

Continuous change creates not only fatigue, but also other documented organizational problems. Change often results in a breakdown of confidence, because almost every change breaks the "psychological contract" between the company and its employees, the tacit but unwritten relationship between the individual and the company. This is even more the case when the change brings about a deterioration of the working environment, intensification of work intensity, and especially redundancy. Layoffs are natural because of redundancy, creating a "survivor syndrome" in which employees who see their colleagues fired become apprehensive and resentful of their employers.

This is a reminder that looking at a business' human capital solely from an economic perspective is flawed. Not only do people have a psychological attachment to their work environment, but more importantly, they also have this attachment to their colleagues. Businesses cannot divest some human capital and expect the rest to work the same way as before. On the contrary, layoffs can lead to hatred and damage the tacit understanding between employees and the company. To give an example that has been well documented in research reports, layoffs can lead to "ineffective attendance," where employees are on the job but absent.

Resistance to change hysteria

One of the most well-known examples of "change hysteria" is the rise and fall of the Internet industry at the turn of the century. During that time, people thought they were entering a new era, and traditional marketing and distribution methods were changing. Indeed, the Internet has changed and is still changing many things. In some industries, such as tourism, the Internet has a huge impact. But in other industries, such as healthcare, the impact was much smaller than expected.

We are not entering a "weightless economy" as some experts predict, but we are still in the "age of oil", and the impact of oil on our age is the same as the impact of iron, bronze, wood and coal on mankind's past eras Equally obvious. The cutting-edge areas of the global economy have changed, but not dramatically transformed.

In the past, it was believed that there was an overall change in the economy around the Internet. This realization today appears to be a misprediction. The harm brought about by this wrong prediction is not only the rapid increase in the number of Internet companies, but more seriously, it makes the original "old economy" enterprises re-plan their future development in order to conform to the so-called "new common sense" of the information age. Roads (see sidebar "Costly Mispredictions"). But the obsession with change isn't entirely irrational. Businesses are punished if they don’t keep up with the times. To avoid this, we must know what drives us to keep up with the times.

The CEO of a well-known telecommunications company displays the company's stock price in his office, so he can keep track of it at all times. We believe it takes courage for leaders to make changes, but it also takes courage to resist the day-to-day psychological shock of stock prices. And that's exactly what the best business leaders do. Even when the dot-com bubble burst, some companies, like lastminute.com, survived by ignoring short-term valuations of their stocks. Markets are short-sighted, but business leaders must have the courage to take a long-term perspective.

Sometimes economic factors can make it difficult to resist "change hysteria," and mentality can also play a role. We now value change as the hallmark of successful leadership and management. Imagine if a new leader (whether he's the CEO or the leader of a team) said, "Let's go the old way," how would that react?

This is almost impossible because we now define business success in terms of change.

However, a major survey of European managers revealed that the change was mainly to avoid anxiety. Often people want change because they want others to see them make a difference. The problem, however, is that while there are big differences across industries and regions, the average tenure of mid-level managers is two years, compared to five years for CEOs at large companies. So, while businesses have an inherent tendency to change, no one has a commitment to the future.

Another important driver of change is benchmarking. Companies often compare themselves with other companies in the industry, especially leading companies, and then follow suit. At first glance this seems reasonable. But after careful analysis, you will find that this is a sign of cowardice.

By benchmarking, corporate managers can avoid criticism. They can say, "I didn't do anything wrong. I just followed the lead in the industry." It's no wonder that sometimes mistakes made by one company can be multiplied across the industry.

What is more worrying is that companies are emulating outcomes (i.e. what the champions are doing) rather than processes (i.e. what motivates them to take such actions).

This is a fundamental question because emulating results means always comparing yourself to yesterday's solution. But emulating the process means learning a culture that brings innovation. However, these cultures are often spontaneous and cannot be easily imitated.

Don't change recklessly

In the business world, we often talk about the importance of thinking outside the box. But paradoxically, when we celebrate our breakthrough in conventional thinking, it is often when we coincide with other people's ideas, because we are all slaves to the conventions of this era.

Looking back at the past, we will see that many of the ideas in the past are obviously wrong now. At the time, no one could have imagined that modern industrial and communication technologies would be used by authoritarian governments in some countries to plunge the world into conflict and tyranny, and we are still living in the aftermath of these phenomena.

From this we learn enough that the things that seem most obvious and unquestionable are the most ephemeral things.

So what looks most certain today? No doubt, the list goes on and on. But the most common perception in the business world is that we are currently experiencing unprecedented change, and the change is still intensifying. This is so obvious that it's not worth mentioning, but it just means that sensible business leaders will know that it's probably not true.

Nor should we assume that change does not exist. Change has always existed and will always exist. It's just that everyone should take a more thoughtful approach. Don’t make changes regardless of consequences or specific circumstances. It's strange that 21st century businesses have adopted so many 20th century politics. They love revolution, grand strategy, and radical transformation, but are impatient with small, incremental reforms.

Philosopher Karl Popper opposed both despotism in the form of utopian society and social democracy in that form. He appreciates smooth, incremental progress based on rational analysis. Most business leaders would embrace Popper's view of political change, but ironically ignore it when they govern their own businesses.

Excerpted with permission from World Business, a publication of Haymarket Business Publications Ltd. World Business registered copyright. Translated by Shen Min.

Christopher Grey is Professor of Organisations at the Judge Business School at the University of Cambridge and a Fellow at Wolfson College, University of Cambridge.