Can You Smell the Change?
Let's accept that people are not really rational. We all know we probably should drink alcohol less, eat fewer processed foods, cut down on caffeine, take more exercise and, damn it, call our mothers more often. We all know we should do these things to improve our lives and those of others — but we don't.
I'm not sure that organizational change as business as usual is any different. It should be a natural part of our business model as a gradual proactive evolution. (The Japanese have a word for it — kaizen.) Every CEO, whether in a charity or commercial setting, talks about it. But the reality is that most organizations — charities or commercial — find it difficult to adopt that adaptive paradigm.
The commercial world is full of examples of organizations that failed to change. Who now talks fondly of the companies that once seemed to have it made — from Netscape (Internet browsers) to Sinclair (computers)? They all had great "first mover" advantage and then lost it to organizations that were less innovative but smarter and more open to change. Many charities, sadly, seem to have a slow and reactive culture very similar to the slow-moving corporate one.
There are exceptions: I spent some time recently in China with the far-thinking and entrepreneurial Sir Nick Young and his British Red Cross team talking about how to change the International Red Cross Red Crescent Movement for the next decade, and the major restructure of Save the Children International represents a whole new way of working with and engaging supporters. Sadly these examples of far-sighted proactive change are exceptional.
There are lots of great articles and books on how to change, but the key challenge to me is how to spot when to change in that proactive way. As my contribution to sophisticated ideas in management, I've developed a theory that I call the Organizational Olfactory Approach. It involves sniffing the air for signs that things need to change. Check out your own scent sensitivity below.
Smell the coffee
Do you need to be more awake to potential changes to be addressed? On a prosaic level, the complaints I hear from many CEOs at the moment about "the cutbacks in state/donor support" seem oddly dated. The current chill is simply doing something that was predicted even in the days following the collapse of Lehman Brothers in 2008. But many charities seem ill-prepared for the entirely predictable new order. How about you? Do you need to be more alive and awake to the changing environment you have to operate in?
Smell the rotten eggs
Do you sniff the air for things that don't seem right? For example, many charities lost significant money in the Icelandic banks fiasco, placing large amounts of reserves in accounts that seemed to offer improbably high ROIs. When the golden goose turned out to be barren, they complained loudly. But actually the financial press had been warning for months about the improbability of the accounts in question. Of course the "eggy smell" might be closer to home with a dysfunctional board or a senior staff member performing poorly. If there's a whiff of something going off, take action sooner rather than later.
Smell the smoke
Do you keep your nostrils on full alert for possible signs of smouldering that could turn into a burning platform? In China I told 70 senior Red Cross officials the news they're losing market share in some key income areas. The loss wasn't much — in one case a mere 0.7 percent over three years. But if the market in question is the $120 billion global governmental development budget — well, that's a very smoky smell. (Do the math.)
Continuing to lose that level of share could lead to a significant reduction in income. When there's a possible fire, you have to investigate and take early action.
Smell the fresh air
Often organizations, and especially senior managers, need to get out more rather than spending endless time in meetings with colleagues or networking with peers. Useful as these activities can be, they also can drive mind-sets about what's possible and not possible. I was asked by the respected CEO of a foundation recently to benchmark its grant-making processes with other foundations for speed and efficiency.
"Easy," I said. "You're the best." The CEO blushed with pride until I had to add, "But everyone else is dire." Instead I suggested the organization compare itself to credit card companies — how quickly would they process support for a good "credit-worthy" risk? (Average loan decision … one day. Average grant decision … three months.) Make sure you get out and smell the fresh air of different approaches.
Avoid the easy platitudes about being "a learning organization" unless you mean it and put in the same commitment as Red Cross and Save the Children. Be pragmatic in the same way as you ignore most of the lifestyle advice outlined earlier. And unlock the bloodhound in you to track the changes you need to make. FS