IV Change and Continuity

The traditional institution is designed for continuity. All existing institutions, whether businesses, universities, hospitals or church- es, therefore have to make special efforts to be receptive to change and to be able to change. It also explains why existing institutions face resistance to change. Change for the traditional institution is, so to speak, a contradiction in terms.

Change leaders are, however, designed for change. And yet they still require continuity. People need to know where they stand. They need to know the people with whom they work. They need to know what they can expect. They need to know the values and the rules of the organization. They do not function if the environment is not predictable, not understandable, not known. But continuity is equally needed outside the enterprise. In fact, we are learning increasingly the importance of long-term relationships. To be able to change rapidly, one needs close and continuous relationships with suppliers and distributors. But the enterprise also has to have a “personality” that identifies it among its customers and in its markets—and again this is true as much of nonbusinesses as of businesses.

Change and continuity are thus poles rather than opposites. The more an institution is organized to be a change leader, the more it will need to establish continuity internally and externally, the more it will need to balance rapid change and continuity.

This balance will predictably be one of the major concerns of tomorrow’s management—both of the practitioners and of the scholars and writers on management. But we do know already a good deal about how to create it. Some institutions already are change leaders and have tackled the problem—though not always solved it.

One way is to make partnership in change the basis of continuing relationships. This is what the Japanese “Keiretsu” has done with respect to the relationship between supplier and manufacturer, and what is now adopted fast in American business through “Economic-Chain Accounting” (discussed in the next chapter of this book). We are developing similar partnerships in change as

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the basis of continuing relationships between manufacturer and distributor, for example, between Procter & Gamble, the world’s largest producer of household needs, and large retailers such as Wal-Mart.

But relationships within the enterprise (as discussed earlier in Chapter One) are also increasingly going to be partnerships— with employees of the organization, with people who work for an out-sourcing firm but who are actually members of the enterprise’s own working teams, or with outside, independent contrac- tors. And again, these relations need increasingly to be organized as long-term partnerships in the process of change.

Balancing change and continuity requires continuous work on information. Nothing disrupts continuity and corrupts relationships more than poor or unreliable information (except, perhaps, deliberate misinformation). It has to become routine for any enterprise to ask at any change, even the most minor one: “Who needs to be informed of this?” And this will become more and more important as people no longer necessarily work next door to one another and see one another half a dozen times a day. The more enterprises come to rely on people working together with- out actually working together—that is, on people using the new technologies of information—the more important it will become to make sure that they are fully informed.

At the same time, it will also become more and more important for these people to get together and actually meet one another and work with one another on an organized, systematic, scheduled basis. Long-distance information does not replace face-to-face relationships. It makes them actually more important. It makes it more important for people to know what to expect of one another. It makes it more important for people to know how the other person actually behaves. It makes it more important to have trust in one another. And this means both systematic information—and especially information about any change—and organized face-to-face relationships, that is, opportunities to get to know one another and to understand one another.

92 Management Challenges for the 21st Century

Information is particularly important when the change is not a mere improvement, but something truly new. It has to be a firm rule in any enterprise that wants to be successful as a change leader, that there are no surprises. Above all, there is need for continuity in respect to the fundamentals of the enterprise: its mission, its values, its definition of performance and results. Precisely because change is a constant in the change leader’s enterprise, the foundations have to be extra strong.

Finally, the balance between change and continuity has to be built into compensation, recognition and rewards. We long ago learned that an organization will not innovate unless innovators are properly rewarded. We long ago learned that a business in which successful innovators do not make it into senior management, let alone into top management, will not innovate. We will have to learn, similarly, that an organization will have to reward continuity—by considering, for instance, people who deliver continuing improvement to be as valuable to the organization, and as deserv- ing of recognition and reward, as the genuine innovator.

IV Change and Continuity