European executives overconfident about their ability to manage change

SupertankerThere are a number of casual truisms about the modern workplace that everybody accepts to the point they become clichéd. But knowing something and knowing what to do about it can be two completely different things. While we might all agree that ‘change is a constant’ and the ‘main driver of change is technology’, both ideas are subject to the interconnected and immutable law that whatever we do is likely to be wrong to a greater or lesser degree. According to new research from the Economist Intelligence Unit, one of the main reasons for this is that organisations and business leaders are not very good at judging how responsive they are to change, make the converse misjudgements about the readiness of their competitors. In the words of the survey, they tend to see themselves as speedboats while viewing their competitors as supertankers when the reality is often the other way around.

The Ricoh sponsored report, The Challenge of Speed, found that the 461 senior European business leaders are generally overconfident about the speed with which their organisations respond to technology-led change. Nearly all (92 percent) of those surveyed claimed that speed was an ingrained part of their organisation’s culture and nearly three-quarters (73 percent) agreed they needed to become even more agile. Yet only a quarter (24 percent) believe their organisations are able to quickly take advantage of new opportunities or adapt to unexpected changes and under half (46 percent) think that it’s important in any case.

This mish-mash of beliefs is inverted when it comes to competitors however. Respondents were three times more likely to compare their business to a speedboat (48 per cent) than a supertanker (17 per cent), while believing the opposite of competitors.

The report claims that the main barriers to greater responsiveness are the often unknowable, misunderstood or accepted bottlenecks and brakes that exist within all organisations, including cultural and employee inertia (and hostility to change and candour) as well as an inability to link technology platforms which also leads to the formation of silos of information.

There is also something of a hierarchy gap (which may also be generational) between digitally literate front-line staff and their department managers (where the most rapid change originates) and senior managers who may be less tech savvy and often support the bureaucracies and decision making processes that decelerate change.

There are three elements that make an organisation particularly excellent at managing change, especially in the three key areas of  product and service innovation, the adoption of new technology and business process change. The report claims these requirements go hand in hand, yet under a third of businesses (29 percent) are able to rapidly re-engineer processes to support change.

According to the research, the boardroom is not often the best place from which to drive change. Those organisations in which senior executives initiate change, are twice as likely (53 percent) to say they need to move somewhat or significantly faster in the next three years than a company where change originates from department heads (27 percent).