Breakthrough technologies like AI, the internet of things, and robotics are completely changing how we design and deliver solutions to human needs. This movement is also spurring a deep revolution in how organizations are being run, perhaps the biggest since the invention of electricity. One study found that 96% of companies plan to redesign how they work.
While it is true that investments in digital will matter, there are still plenty of humans running the show, and the way they think, their approach to collaboration, and how they innovate will be a big factor in the success of any digital transformation. Indeed, digital transformations are still really human transformations.
The majority of organizations will need to change their culture, which means humans will need to change their habits. (At the NeuroLeadership Institute, we like to define culture as “shared everyday habits.”) In particular, to compete in the increasingly digital and connected world, employees everywhere are going to need to be more customer-centric, inclusive, and agile.
Now for the scary part. One study showed that while the vast majority of companies plan to redesign how they work, only 18% of employees feel “change agile.” Another study suggests that only roughly 37% of change initiatives succeed. These are frightening numbers. It means that the majority of firms trying to adapt to a new world simply won’t succeed. That’s a lot of upheaval, unemployment, and disruption. Does it have to be this way? And if not, what are we missing that could make a difference?
Kicking the Habit
At the NeuroLeadership Institute, we study how the brain works in order to make organizations more human. Recently, we undertook some research on why these large culture change initiatives fail. You might assume the biggest factors were some combination of poor strategy or lack of investment. Not so. By far, the biggest factor in why organizational change fails, involves a failure to change human habits. In case after case, everything was right — the strategy, the plans, the budget — but the people were not changing.
We have a hypothesis for what is at the heart of this change problem: The prevailing theories for how to change organizational culture simply don’t line up with the latest science about how humans learn, develop, and grow. Science and business have yet to overlap.
Research suggests that three types of activities need to occur for an organizational (or individual) change to succeed.
First off, every employee needs to understand that there are new priorities that really matter. These priorities need to be easily recallable, sticky ideas that make complete sense with everything else going on and get people thinking in new ways. They need to appear desirable, as well as feasible. Without those three factors, people will not pay sufficient attention to a change.
The second step, the harder work, involves building true habits that support these priorities. Building habits take time and attention, it doesn’t happen by just wanting to.
The third step involves systems that support everything, to keep the priorities and habits alive. As a simple example, you can get people to want to be healthier, but to do so they have to actually go and exercise, and that’s much easier if give them a gym to use and get them to schedule this in their calendars ahead of time.
We call this the “PHS model of change,” for Priorities, Habits and Systems. It sounds simple, yet nearly every company we talk to falls into traps along the way. Here’s a summary of our findings.
A few years back we helped Satya Nadella and the team at Microsoft define a new approach to leadership, in order to drive their new culture. Following the science, we landed on something essential, rather than exhaustive: Leaders at Microsoft should Create clarity, Generate energy, and Deliver success.
When a framework is as easy to recall and hold in mind as “Clarity, Energy, Success,” it unconsciously primes people to do different things day to day — it just “sinks in.” In addition, people can use it to do what we call consciously self-calibrate. They can check their plans against these priorities, like a plan for running a meeting, organizing a business unit, or launching a new product. And best of all, people talk about it all the time, helping to prime others.
In this way, the ideas are top of mind at the firm for a large number of people, helping to shift culture in thousands of small both conscious and unconscious acts, daily, across the firm. This framework, now in its third year in the organization, is being used for hiring, feedback, assessment, and leadership development.
As Joe Whittinghill, Microsoft’s Corporate Vice President, Talent, Learning, and Insights, said, “this has exploded like wildfire across the company.”
Companies tend to be strongest at the Priorities stage. Yet the real work of culture change begins with thinking of priorities as a set of habits, and following the science of habit formation. Much of this is intuitive, yet change leaders tend to ignore the basics: Habits must be built one at a time, over time. And then research shows that doing this in social settings is a key driver of change. In fact, our client work suggests it’s the optimal way to manifest priorities through actual behavior change.
First off, to get the motivation needed, people need an experience of an “insight” about a new priority, and about any habits you want them to focus on. An insight is a moment when strong motivation occurs. One study we did of nearly 400 people managers found a strong correlation between the strength of an insight and the likelihood of activating a new behavior. Other research suggests that insights are strongest when they combine storytelling with good data, the how, and the why.
There is a natural hunger in organizations to “get people quickly to insight,” playing out in things like digital learning tools and the creation of internal short videos about day to day tasks. However, there is a non-obvious trap in this approach. Learning alone on your laptop or phone misses key factors that occur when you learn socially, with others in real time. Learn something about being inclusive with a peer and you remember it every time you see them, prompting inclusive behavior.
Of course, digital learning is still massively useful. We just need to reframe the digital assets being created and leverage the power of digital for people to learn in small social groups.
This explains our strategy of massively scaling learning by giving people managers small bites of compelling content to share with their teams a few minutes a week. We have data showing dramatically better behavior change from this approach than people going into a long workshop. The third principle is to do this one habit at a time, over time, allowing people to build habits without any sense of overwhelm, which could wreck the whole effort.
Following these principles bring priorities to life as real life habits, at any scale, provided they are properly supported.
Habits must be easy to execute for them to stick. You wouldn’t store vegetables out in the garage if you want to start eating healthy; you’d make them as accessible as possible. Likewise, organizations need to implement systems that support their desired habits. From our work with clients, this is a crucial piece that gets overlooked. It’s easy to nail down what’s important, and perhaps which behaviors make those priorities come to life, but leaders often struggle to figure out the systems that sustain change efforts.
At NLI, in addition to setting priorities and providing the platform to build habits, we help leaders figure out the best way to instill new systems. Each culture is different, so there is no one-size-fits-all approach to embedding habits at scale. That work requires hard thought from executives about what people are likely to do, and what they’ll probably ignore.
Using this approach, over 9 months, we believe we can profoundly influence the culture of an organization, touching every single employee, without a single classroom hour. It’s how we helped HP Inc. through their own culture-change initiative with the principles Imagine the future, Inspire the team, Make it happen. The firm changed its culture among 50,000 employees and sent the company rocketing to number one in both of its markets with a 22% jump in employee engagement. The same approach helped Nokia increase manager behavior scores, an internal metric for culture change, by 10%.
Every week I see companies wanting to change their culture in much the same way — only to avoid changing much at all. We believe that by following the science of the brain, organizations can do a lot better, and make big changes that happen quickly and leave a lasting impact.
Originally published on Forbes.
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