16 August 2021
A whole philosophy of constant change grew from that phrase and is applicable today as it was 2,500 years ago.
So when we constantly live with change in every aspect of our lives why is organizational change so difficult?
There are a lot of reasons and almost all are driven by human behaviours. Unless there is wholesale agreement to change intransigent mind-sets and long ingrained working practices, most transformation programmes are destined to fail.
One of the biggest problems banks have is that very often an individual’s status is validated by the size of their team and how many people report directly to them. Given the availability of modern technologies, which enables people to achieve so much more with less and the establishment of new, highly efficient working practices, it is staggering to see that this outdated status quo is still the norm in many firms. This mine-is-bigger-than-yours attitude needs to change to make real progress on operational efficiency.
This is further exacerbated by the supporting ecosystem: huge services firms fuelled by the need to grow revenues need to constantly grow their team sizes. Their clients objectives of efficiency and cost reduction are diametrically opposed to their own objectives. If you truly want to achieve real efficiencies and show quantifiable cost savings you have to tackle the volume problem. But again and again it has been proven this is almost impossible to do while managers’ egos are measured by the size of their teams, not the effectiveness of their delivery.
Failure can manifest itself in two ways: “small and quick” and “big and slow”. Small and quick failure is actually a very positive outcome, providing you learn from it and move on. More importantly, it helps prevent big and slow failure, which is the stuff of board nightmares.
Unfortunately in most banks, any type of failure is still seen as disastrous. In turn this promotes “waterfall’ thinking: where people are driven to believe they have to demonstrate every possible eventuality has been considered and explored before moving forward. Typically this creates time intensive, large scale programmes with lots of up-front analysis and very little delivery. We are back to building bridges not delivering software.
The term ‘Frozen Middle’ describes the ardent desire of managers to maintain the status quo. The Board/CEO/CIO/COO may strive for change, senior leadership may push for it but the frozen middle says, “But …” and then comes up with all the reasons why it can’t be changed, why that system must stay, why that process is required or that report needed. The group is too vested in status quo, change means uncertainty and risk to their livelihoods, others might have better skills in the new world.
A dynamic business like Capital Markets thrives on flux and change brings opportunity. Embrace the wild side of life.