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IBM survey reveals most businesses are not ready for a digital work environment, and lack the focus and skills to make that change

IBM recently published a report — Making change work …while the work keeps changing — that raises nearly as many questions as it purportedly answers. Let me preface this by saying that the problems raised by the report are cultural in nature, not technological, but nonetheless, suggest some serious issues in the enterprise regarding change.

74% of respondents said that ‘individuals in their organization are not fully prepared to adapt to an increasingly digital work environment, either offline or online.The report was published by the IBM Institute for Business Value, and the results are derived from 1,400 individuals responsible for ‘designing, creating or implementing change across their respective organizations’. The context: more that two of five CEOs now expect their competitive pressures to come from outside their industries, and are not just another company wresting away customers: these forces are disrupting entire markets. But 74% of respondents said that ‘individuals in their organization are not fully prepared to adapt to an increasingly digital work environment, either offline or online’. Also, here are perhaps the most arresting stats in the report:

  • 87% that said ‘not enough focus is currently placed on change management in critical projects’
  • 5% or less of total project budgets are allocated to change management on key projects
  • Only 40% said they ‘have the right skills in place to successfully manage change projects in the future.

The focus of this study was to determine what was different in the approach taken by the ‘Change Architects’ — those companies that had relatively high success rates in complex technological and cultural work transformation. The authors determined that approximately 20% of the companies surveyed had met the objective in 75% or more of the major initiatives of that sort, while moderately successful companies had from 48% to 75% success (35% of the sample) and below average companies had less than 48% success (45%).

I spoke with Jonathan Ferrar, VP of IBM’s Smarter Workforce about these results, and I asked about the disconnect between the C-level desire for change and the apparent lack of skills to deal with it. Jonathan suggested a few key areas that need C-level attention. He suggested that business leaders aren’t communicating the core problems, and what is communicated in most companies isn’t working. The central issue, he stated, is making leaders accountable for measurable change goals.

The authors of the report agree with Ferrar: to make change happen, the company must lead at all levels, especially at top management sponsorship. Last in the list of soft factors is change agents.

Screenshot 2014-08-07 14.01.15

The authors of the study derived the behaviors of the successful ‘change architect’ companies, and suggest that other companies can become more adept at change if they follow those other companies lead. But what I have learned in recent years is — at least in part — at odds with the findings in this report, or at least the weighting of the success factors.

Specifically, my sense is there is no change without change agents, because any new technology, practice, or behavior needs to be adopted by individuals, and in general what helps the majority of people make that change is the example of a peer or trusted colleague who has already started making the change in question. This is particularly true when the new behavior is potentially risky in some way, like social media use.

The so-called ‘positive deviants’ concept is to find those people in the population that are already showing the new behaviors desired, and getting them involved in mobilizing others for change. These are ‘deviants’ not in any negative way: they are just earlier adopters (see How ‘positive deviants’ help a culture change itself, and Cultural change is really complex contagion).

These and other research suggests that ‘ownership of change by middle management’ might not be the point of greatest leverage, unless of course their aim is to seek out and support change agents (positive deviants) among the rank and file.

Jonathan agreed that the reality is that most companies lack people at all levels with the skills to take on major change initiatives large enough to transform the business. This is clearly one of the areas where companies will be poaching talent in the years to come, as well as creating development programs to get leaders up to speed on what is needed to make change happen and stick.

IBM is not simply informing us about this mismatch of objectives and capabilities: they are launching a new dedicated Talent and Change consulting practice, to help customers over these sorts of hurdles. There are four key areas the practice is focused on: Organizational Change, Talent Analytics, Employee Engagement and HR Cloud. And the company is rolling out three new cloud-based offerings to help, which I haven’t had a chance to demo. These are IBM Kenexa Predictive Hiring (workforce analytics and behavioral assessments to understand individual, job, team and organizational traits that define top performers), IBM Kenexa Workforce Readiness (assess current workforce readiness to address existing and emerging business demands), IBM Kenexa Predictive Retention (identify risk factors, identify employees likely to leave and build new programs to reduce the risk of attrition).

I hope to get a demo in the upcoming weeks, and I will update then.