This article was co-written by Maarten Uppelschoten (Chapter Lead at ING Bank) and Pieter Rijken (Kanban Expert at Xebia)
Most often in business, we see “revolutionary” change. It’s a top- down-driven, planned-approach, usually co-created with employees. Typically, this “revolutionary” approach to change depends on defining a future end-state. It moves from point A to B on a journey that focuses on an end-state (though that end-state may change over time). Top-down-driven, planned change aims to minimize resistance by involving the people it’s most likely to affect. So, even though the future is unpredictable, end-state goals create clarity and trust in the leadership. This type of change is largely based on the influential theories of the German-American organizational psychologist Kurt Lewin and his well-known three-stage model - unfreezing, changing, and refreezing.
There’s a wealth of literature, case studies and knowledge available for navigating this particular kind of change. The Xebia-led Agile transformation of ING Bank to the Spotify model is one good example. Although this approach to change has some merit, it also has disadvantages, especially in volatile environments. One problem is that it assumes a certain degree of organizational inertia, which isn’t necessarily the case in today’s fast-paced digitized business landscape. More often than not, people and teams DO initiate local changes, continuously. Another disadvantage of this model is that it creates a roadmap towards a predefined end-state. That means leaders must define a vision of desired outcomes before the change initiative even begins.
It’s difficult to predict how the future end-state will actually unfold in a disruptive and turbulent environment. As Yoda said in the Empire Strikes Back, “Difficult to see. Always in motion is the future.”
Defining the future end-state is based on assumptions about what we know today. Our assumptions heavily depend on our under- standing of how the organization works. Most organizations are complex, social systems consisting of many interdependent connections between people and teams. It’s not easy to make assumptions under these conditions.
Things that prove to work now may not still work tomorrow, especially in a fast moving market. Nassim Taleb, the author of “Black Swan: The Impact of the Highly Improbable” calls this “positive knowledge” in his follow up book, “Antifragile: Things That Gain From Disorder.” Taleb argues that what's been “proven” to work is based on assumptions that may not be valid in the future. In other words, any actions or decisions based on positive know- ledge are sensitive to the unknown future.
However, the opposite holds true for “negative knowledge,” which Taleb defines as the things that have been proven NOT to work. Negative know- ledge is less sensitive to the future.
If it does not work now, it will most probably not work in the future either.
So, how does this help us?
Since we don’t know the future, we can only act on what we do know today. Awareness of your current state should guide you going forward. Is something working for you, or not? If not, that’s what you “move away” from. Do this step by step, following the theory of constraints paradigm introduced by the late business management guru, Eliyahu Goldratt in his 1984 book “The Goal.” The theory of constraints assumes there is always at least one constraint. It uses a five-step focusing process to identify that constraint, exploit, and elevate it. This step-by-step evolution allows you to “arrive” at your desired state, without knowing it in advance. Your desired state is not a predefined “end-state,” it emerges from what you genuinely want to achieve, all along the way.
We often hear statements from organizations that tell us they have an end-state goal in mind:
“We want to become agile.”
“We need to be lean.”
“We must restructure our organizational hierarchy, so it’s flatter and simpler.”
But that’s like saying, “We want to be a diamond.”
You don’t want to become a diamond; you want to become LIKE a diamond–harder, sharper, more transparent, and more valuable than you are today.
It’s the properties of the diamond you want, not the diamond per se. So, if your stated goal is “to become agile,” you should ask yourself why? What are the properties of agility that you want your company to possess and manifest? What are the properties of your “desired” state? Once you’ve identified these properties, communicate them
to everyone involved, including stakeholders and customers. Then determine the first small step you can take towards improving upon (or developing) those qualities and characteristics.
Learn from each newly achieved state and decide the next most logical and valuable step at that point. It’s more about making a selection of two rather than replenishing a backlog of twenty items. Ultimately, you may not become a diamond, but you will definitely become harder, sharper, more transparent, and valuable.
What we want to change is based on what we want to achieve, which is why defining these properties first is so critical and essential. A change in properties will tell us if a step works, or if it doesn’t. That’s how we evolve without a pre-defined, end-state goal.
We conduct experiments to obtain knowledge about our “current” state –did the action improve or move us towards manifesting a property of value? If the experimental step works, we gain a yes- positive knowledge, if it doesn’t, we gain a no–negative knowledge. Again, it’s the negative knowledge we need to direct our change path since the “noes” are less sensitive to the un- knowns of the future. We determine each next step, step-by-step, by figuring out what doesn’t work.
This series of experiments and actions allow us to evolve.
In this “evolutionary” approach to change, the future end-state is emergent and not designed. Instead of moving toward a specific pre- defined outcome, we improve upon what doesn’t work - which will still be true in the future. Changes are guided by knowing what doesn’t work and moving away from it.
We use the outcome of experiments to decide where to go next and let the organizational structure emerge. This approach is robust to unknown, future events and ensures an organization fit for its purpose at every step of the way. In this approach, you discover the future one step at a time.