The Power of Virtuous Change: Why Most Organizations Fail at Transformation
Issue 198, February 6, 2025
Not all change is good. Not all change is for the right reasons. Change for change’s sake is not a viable proposition. Change must come with a clear framework of what will replace what was and the benefits of what will be. Without understanding the mechanics required to transition to the change, only chaos will result. The recent government order to freeze federal funds along with a cascade of other directives are a case in point for all three of these examples: immediate confusion and chaos.
What changes do you make with good intentions and poor reasoning? It’s the poor reasoning that trips us up with unintended consequences. Change that does not recognize how to perform or carry out the intended change is a disservice to virtuous change. But sadly, many organizations make knee-jerk, short-term changes without thinking it through.
Change is part of our consumer conversation. Consider Nike’s slogan “Just Do It.” In many cases “just doing it” can come with a barrage of unintended consequences and a lack of anticipation of how “doing it” may upend strategy and goals. “Just do it” sounds like a quick way to get something done, react to a situation, make something go away or, in some instances, simply exert power and influence over others. And speaking of power, we have written about power positioning in our book The Truth About Transformation as well as in our newsletters to help readers recognize how humans seek to exert power (often with negative results) to effect change or influence others. And not to get all political, but regardless of one’s opinion and viewpoint, that is what we are experiencing as a nation right now.
Change Run Amuck
Recently we’ve witnessed some strange, head-scratching changes. The Jaguar rebrand has made a luxury icon into a confusing hybrid of a stylized logo mismatched with a classic automobile and its audience. LVMH made a dramatic change to the Olympics medals with their Bronze medallions now rusting and degrading. A number of major retailers have caved to activist pressure to dismantle and change DEI policies. Amazon consistently ups its Prime membership costs without full disclosure. Starbucks is banking on a comeback with reintroducing ceramic mugs. Meta abruptly changed its fact-checking policies. And the new US administration is enforcing change in a flood of confusing executive orders.
These types of changes, macro and micro, can erode trust and respect, two pillars that are essential to any organization’s survival. Unexplained change can become a source of stress, anxiety, uncertainty and confusion in the minds of employees, customers and stakeholders as well as the public. Those ingrained negative feelings fester and then surface to correlate to the brand, individual or organization enforcing change. These negative reactions are triggered when individuals are presented with images, products, services or individuals related to that change. In short, lasting negative opinions and perceptions can be formed from those reactions that erode trust and respect. The flip side is virtuous change which can engender the polar opposite of the feelings we have just described.
Why Change?
Humans often crave change because it is fundamentally linked to personal growth, in pursuit of novelty, the desire to break free from routine and in some cases, a tool to adapt to new situations. Our brains are naturally stimulated by new experiences with the release of dopamine, making us seek out change and repeat it to feel a sense of excitement and satisfaction. On the face of it, this is not a great rationalization for change. The individual desire for change may also stem from simply wanting to escape from life or a situation, a distraction from problems or issues that cannot be solved in the near term, or to exert control over one’s life.
From a business perspective, it’s tempting to play with change in a down market. That may be short-sighted as Jill Kreuger, board member of Sonida Senior Living says, “We’re all trying to survive. And in survival mode, strategy takes a backseat. It has to. Because strategy costs money, Strategy costs time. And when we’re in survival mode and we’re trying to make the numbers meet and refine the operations and streamline, that’s where our energy goes.”
Why we crave change can be explained by five motivations that do not necessarily work in concert when it comes to individual or organizational change and transformation.
- Novelty
Our brains are wired to respond positively to new stimuli, making us naturally drawn to new experiences and changes that break the monotony of routine. The novelty of change is specific to an individual and select situations and is motivated by immediate and personal/professional desires. We argue that this behavior can fall into the trap of change for change’s sake without considering the consequences. - Patterns
The corollary to craving novelty is the desire to escape repetitive behaviors or situations that feel stagnant or unfulfilling. Breaking patterns in an individual or organizational context can stimulate innovation and creativity and add interest and excitement. Consider motivations for change to break habits, or in an organizational context, reconstruct a work process or implement process improvements to address ineffective outcomes. - Urgency
If products and services are no longer relevant but not rationalized as to “why,” uninformed urgency becomes the catalyst for negative change. Urgency without relevance is short-sighted when a direction or plan is enacted without consideration of its mechanics and whether it is the right direction or path. It is simply to change action for action’s sake.
- Agency
Initiating change can give us a feeling of control over our lives and empower us to take a more central role in shaping our own destinies. Agency can also be foundational in organizations, particularly in a highly dynamic marketplace where change addresses so much of what is out of immediate control. - Growth
Change can spark professional development within a workforce, allowing employees to learn new skills, overcome challenges, and evolve as individuals. But beware: Generations of employees see growth in different ways. Older workers seek growth by climbing the organization’s career ladder, while younger employees seek growth by adding to their career portfolios with skills and accomplishments that can aid them in securing work in other organizations or for other purposes. - Adaptation
Survival of the fittest and its sibling natural selection are operational as inspiration for change management tactics. When a condition or the environment has changed, the only recourse may be to adapt, become one of the “crowd” or acquiesce. In most life and work situations, adaptation can be important as a survival tactic to manage new situations (i.e., organizational structures, response to natural disasters, or loss of a family member).
Why We Resist Change
While some welcome change, many others often resist it because it triggers feelings of fear, anxiety, uncertainty, and a loss of control. By nature, people prefer familiarity and comfort, particularly in a professional setting where we want to know what our day-to-day responsibilities are and feel secure that our contributions are recognized. A sense of accomplishment feels more real when familiarity and “knowing” are at the core. We are creatures of habit and routine – even innovators and entrepreneurs work and create within a comfortable construct that recognizes calculated risk.
Change, particularly when enforced externally, is the unfamiliar territory of the unknown. We have learned from our work on change and transformation projects that clients need to help employees understand the transitions they are making by clearly articulating how the past will evolve into the new situation and how they can align themselves and redefine themselves as valuable contributors.
When we step outside our comfort zone, it can be unsettling and disorienting. We fear failure in mastering new circumstances or something we don’t yet understand. Change makes us feel out of control, losing the personal agency and status to influence others or the situation at hand. Most importantly, change can compromise our capabilities and undermine our self-worth.
At 2040 we work with clients to navigate change and stabilize transformation with a few simple tools: Explain and communicate; empower the workforce with transparent explanations of how their work lives may change; establish a feedback loop on progress; and celebrate successes.
Change Without a Plan
When change is implemented without a plan, it can lead to confusion, inefficiency, resistance from employees, missed goals, wasted resources, increased stress levels, and a higher likelihood of failure. No clear direction or strategy to manage a transition potentially causes disruptions and setbacks throughout the process. We have written extensively about the barriers to change in The Truth About Transformation, and we have a few key reminders of how mismanagement of change can disable an organization.
- Lack of Clarity
Without clarity, direction and a defined plan, people will not understand the purpose of the change or what is expected of them, leading to confusion and uncertainty.
- Increased Resistance
If the workforce feels uninformed or uninvolved in the process, it leads to lower adoption rates and negative impacts on morale.
- Poor Resource Allocation
Without proper planning, resources may be wasted or misallocated, impacting project timelines and budgets.
- Missed Deadlines
Without a clear roadmap, achieving desired goals within set timeframes becomes much more difficult.
- Inefficient Implementation
Unplanned or poorly explained changes result in disorganized execution, leading to rework, delays, and unnecessary complications.
- Increased Stress Levels
The uncertainty and lack of control associated with unplanned change can lead to higher stress levels among employees, damaging employee morale and trust in leadership.
Risk management is essential to change and transformation. Change management requires clearly defined goals and objectives, a communication strategy, detailed implementation plans, training and support for employees, and evaluation mechanisms.
Virtuous Change
We are advocates of virtuous change. Virtuous change makes a difference and offers the potential for improvement in our lives. We are not advocates of change that has no sound basis. Individuals and organizations must understand why change is being enacted and the strategy to make it successful. Stakeholders must clearly understand the path to achieving the goals and the actions required to achieve them. In our highly dynamic world, everything is interdependent and connected. Even when change seems isolated, there are factors and variables within other systems that are influenced and impacted. The organic connectedness of our society, workplaces and even our personal lives are within the sphere of virtuous change.
If you are contemplating change, and we use that term deliberately, consider a process that is iterative and creates value for all stakeholders. Virtuous change is mutually beneficial. It is built on a process that creates value for others. Being iterative helps develop a mindset that makes each subsequent change more likely to be embraced. Virtuous change has the potential for a product or service to reach its highest operating level.
Tony James, Costco chairman, cautions organizations to understand what lane they operate in. “The most enduring competitive advantage a company has is its culture. Think and act like you own the company and every idea or thought you have about it takes on heightened meaning. Things are going great, but what if we changed the way we do things? The XYZ company does XYZ, so it might be a good suggestion, but only at the right time for the right reasons – to solve an issue or make something better, not change for the sake of change.”
The guiding principles for virtuous change are embodied in the same principles for enlightened leadership: generosity, courage, truthfulness, respect, justice, and empathy. At 2040 we consider this to be a formula for success, especially in our current environment of dramatic changes that affect our organizations and lives.
Virtuous change is taking the high road, engendering trust and leading others to new levels of success. Practice makes perfect.
Get “The Truth about Transformation”
The 2040 construct to change and transformation. What’s the biggest reason organizations fail? They don’t honor, respect, and acknowledge the human factor. We have compiled a playbook for organizations of all sizes to consider all the elements that comprise change and we have included some provocative case studies that illustrate how transformation can quickly derail.
