Chapter 6: Introducing Change Velocity

Hi Culture Shock kinda-readers,

Here’s the intro to chapter six, which is one I’m particularly interested in – see what you reckon…

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CHAPTER SIX: CHANGE VELOCITY

In addition to their Openness another fundamental characteristic of organisations in this progressive movement is their ability to change very rapidly. And their propensity to do so. For me it’s one of their most violent and disruptive advantages.

These fast-moving, fast-changing new players eat away at industry incumbents’ market share through their ability to learn, iterate and change, loop after loop, many times faster than the old guard.

Another change! Another change! Another change! POW. Amazon vs. Barnes & Noble (US) / Waterstones (UK), Netflix vs. Blockbuster, Threadless vs. GAP.

This is not just a business imperative – governments and not-for-profits must also speed up. As Google chairman Eric Schmidt recently relayed in an interview, Andy Grove, the long-serving CEO of Intel said at a dinner in 1995 “High tech runs 3X faster than normal businesses. And the gov’t runs 3 times slower than normal businesses. So we have a 9X gap.” If government would like to emulate the success and practices of Silicon Valley, then they have a great deal of flexibility and speed to find in themselves.

And related to this, one of their other great emerging characteristics is their ability to u-turn. By u-turn I mean not just product innovation. This is wholesale changes of direction.

Whatever you think of it, Facebook has been absolutely brilliant at doing something, hearing a load of feedback, and doing a public u-turn within hours or days. It doesn’t always, and has returned to the same initiatives and goals over time, but the Beacon turnaround sticks out – though there are others. See this Google search for “Facebook u-turn” – 999,000 results (same search for “Google u-turn” returns me 18,200 results, and for Apple 19,400).

I thought of this characteristic again having followed the interesting Netflix story lately.

If you haven’t already heard, they made some bold changes to their product – divided the whole business in two with no consultation, called the DVD mailing business Qwikster, kept Netflix as the solely-focused streaming business.

The outcry has been sustained, and numbers have backed up the complaints – some commentators say this is hitting Netflix’ business.

Now I read that, 23 days later, they’ve reversed the decision – That Was Qwik: Netflix Dumps Qwikster, Won’t Split DVD-Streaming Accounts by paidContent

I always admire a u-turn:

1. You tried to innovate and make change – that takes guts and brainpower
2. You listened – that takes ears!
3. You are humble enough to publicly admit you were wrong – that takes guts

Now having begun to write this I realise that before this little phase of reading and writing I just got off a call with a team in a gigantic multi-national bank. Some young talents in a development programme for top potential future stars have been working on launching a business innovation. Their biggest challenge is what they describe as the internal ‘conservatism’. Making change in that organisation is really really hard. Scarily hard when you think about the above.

So what we are experiencing here is the ability of organisations to rapidly adapt to the world around them.

What is change velocity?

A mate of mine called David has worked his whole career in sales. He is a proud salesman through and through. And he half-jokingly introduced me to one of his favourite concepts a few years ago: “revenue velocity”. This is not how much work the client needs doing in total, but how quickly they need or want to invest that budget. At the time I find it a hilarious encapsulation of his deliberately-cultivated salesman persona both good and bad (though in time running this services business I’ve learnt to appreciate the wisdom in it).

This phrase makes me think about an organisation’s ability to change quickly. Change velocity of an organisation is its ability to change quickly. Not just agility, which is its ability to shift its focus rapidly – an organisation can be agile without internally changing. Not just its speed, which is the speed that it moves at – again an organisation can move quickly without changing. And not just its ability to evolve – an organisation can evolve effectively over time, but can it do so quickly enough?

The higher an organisation’s change velocity, the faster it can shift its focus, the faster it can execute, and the faster it can fundamentally change itself.

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Next extract: ‘Why must 21st organisations be able to change so quickly?’

Please provide feedback: via comments on this post, via email to wmcinnes@gmail.com, tweets @willmcinnes #cltrshck.

As always, please feedback and share with people you feel will find this useful.

Thanks Shock-fiends,

Will