Any kind of change, especially radical change, brings with it many challenges for all the people involved. It is therefore insightful to take a look at them as a whole. Let’s look at corporate transformations, startup pivots, and individual career transformations as one thing and see if we can learn something by comparing the similarities and differences. A change of identity is what radical change is about. Challenges to build a commercially viable offering of the new identity are a topic in itself. When startups are undergoing a pivot, often the new customer base has to be created ground up. I do not want to talk about those challenges here in this post. I will focus on the challenges posed by the internal aspects of the entity that is undergoing the transformation.
Many of the issues surrounding transformation come from the fact that people have a strong attachment to their old identity and the feelings associated with it. It is, therefore, the closest people to the identity are the ones who pose the most difficult challenges. One of the reasons Xerox was unable to capitalize on the various innovations that came out of PARC was that much of the senior management was invested in the dying photocopier business, and had their expertise in the same. One of the startups I worked with undertook a very successful pivot from an intellectually high end, yet unprofitable business to a more operationally focused yet profitable business. The people were the greatest challenge.
Personal transformations pose very similar challenges. If you want to move on from a career to another, you have to change how you think of yourself first. It is difficult to see yourself as the person in the new settings. What makes it more difficult is the people who are the closest to you are uncomfortable with your new identity. If your current identity is undergoing a crisis, and if they know it, it is easier, since they can rationalize the motive behind the transformation. But if a very highly successful individual changes to a new career not seen as rational by the closest people, they are the biggest obstruction to the potential change.
Larger companies address the issue of changing identities by employing external consultants. The senior leadership is not lacking in knowledge on how to navigate the change. It is often the case that the consultants are simply executing a script that has been handed to them by the leadership. Yet, it serves a critical purpose. The senior leadership can pretend to be unconcerned about the change with their employees, yet still carry out the change firmly. Since most of the transformations involve a huge change in the way the workforce is organized, these kinds of strategies help the leadership to look more humane while doing things in a tough way. The best companies when it comes to transformation have a script that is ingrained in their culture. In “Control Your Destiny, or Someone Else Will,” Noel Tichy tells the story of how Jack Welch turned GE into a more agile company. I started my career at GE Capital and saw this process firsthand. It was often difficult for the participants in the short run, yet one could understand the rationale behind it and see how it was beneficial for most people in the long run.
Startup pivots frequently involve fierce conflicts among the founders, the senior employees, and the investors. One of the startups I worked with pivoted three times in a year, changing the target customer, the product positioning, and the entire code base of the product. The developers had to see their code, the hundreds of thousands of lines they wrote just four months back, made redundant through the process. Fortunately, the employee-company fit was marvellous, and not a single person left the company. There was a lot of learning in the process, as ultimately founders changed, and the company had an exit with the fourth attempt at a product. If you think this is extraordinary, I can assure you that this is a story of a typical startup. No doubt, there are challenges of finding the right product-market fit, matching the cash burn with it, and eventually building a robust offering, but the personal aspects of the change are as important. If it is not done well, founders can turn from the best friend to the worst enemies, and the employees can burn out.
Personal transformations are the most fascinating of the lot, and most relevant, since all of us go through them at some point. They are often the attempt of a sensitive individual trying to build a life closer to their passion while earning enough to sustain. An extreme example of this kind of transformation is Paul Gauguin, who left the career of being a stockbroker, and went to become a broke painter. This can have devastating impact on the relationships with close ones, and not so close ones, some really concerned about the well-being of the person, and some excited by schadenfreude as they perceive it. In either of these cases, the involvement of the friends and acquaintances in the process of personal transformations is typically an obstruction to the individual’s goals. In case of the transformation that happen with companies, you can be a little distant, but in personal transformations, the conflict caused by this can have devastating effects on the relationships.
What are the common strategies used by these entities to execute the transformation? They need to build a new network of people who are sympathetic to the change, encourage conversations that absorb the impact, and be flexible in their responses to feedback from people who have something constructive to contribute. The senior leadership conversations in the large companies, the founder conversations in the startup, and the spousal conversations in the personal transformation can help them succeed or fail.
If you or your company are going through a transformation, or have gone through one, does your experience match what was described above? Please let me know in the comments.