Organizational change can often seem confusing and directionless.
But there are methods you can use to make decisions based on evidence and reason. One of these methods is Evidence-Based Management (EBM), supported by Larman’s Laws. These tools can be very helpful for organizations looking for clear guidance.
Let's unpack this topic to help understand how you can use EBM to direct strategic, progressive change in your organization.
Are your organizational changes merely cosmetic?
As businesses evolve, there's an underlying pressure to adapt, innovate, and revamp. Often, these changes are heralded as signs of progress – restructuring teams, introducing groundbreaking technology, or rolling out new policies. But how often do we pause to question the depth and authenticity of these changes? Are you achieving transformative change or just cosmetic touch-ups on a structure needing foundational repair?
Do any of these sound like you?
You've revamped your team structures.
Example: Your marketing and sales departments previously operated separately. However, noticing the benefits of collaboration, you merged them into a unified 'Go-to-Market' team, aiming to harmonize their strategies and communication.
You've introduced new tech.
Example: Recognizing the inefficiencies in manual data entry, you invested in an AI-powered Customer Relationship Management (CRM) system. This system automates data entry tasks and provides insightful analytics to improve customer interactions.
You've rolled out policies that seemed innovative on paper.
Example: You introduced a "4-day workweek" policy to enhance work-life balance and boost productivity. Based on various research studies, the concept suggested that shorter, more focused work durations could improve overall output and employee well-being.
Even if you’ve made the abovementioned changes, an unsettled feeling may be lingering.
Superficial change is like updating the exterior of a house without fixing the foundational issues. Could your organization only change on the surface without addressing deeper, more impactful challenges?
The key is determining whether these changes are truly transformative or just window dressing. Larman’s Laws can help you do that.
What are Larman’s Laws?
Larman's Laws of Organizational Behavior are profound insights derived from years of studying how large organizations react and adapt to change, particularly when transitioning to Agile practices. These laws include behavior patterns, resistance, and dynamics that often seem counterintuitive or perplexing to change agents. They shed light on the inherent complexities of organizations, the often-unspoken rules that govern their response to change, and the obstacles one might encounter when pushing for transformation.
By comprehending Larman’s Laws, those aiming for genuine organizational change can equip themselves with a more detailed roadmap, allowing them to anticipate challenges and strategize more effectively.
Understanding the organization’s core
Before initiating organizational change, you will need to understand the underlying factors influencing an organization's functions.
Culture over strategy
The saying "Culture eats strategy for breakfast" wasn't coined without reason. The ingrained behaviors, beliefs, and values that define an organization's culture can often overshadow any innovative strategy you try to implement.
If the culture is resistant to change, it will prevent all the new innovative strategies from succeeding, making them dead on arrival. In these situations, even the most revolutionary strategies can falter. By first understanding and addressing the cultural aspects, leaders can lay a solid foundation for introducing and sustaining meaningful changes.
Simple over complex
It's a natural human instinct to push back when confronted with drastic changes. This resistance is even more pronounced when the changes are intricate and challenging to grasp. Instead of throwing a complex change agenda, starting small, iterating, and scaling is wise.
Starting with simpler, more tangible changes allows team members to adapt gradually. Leaders can progressively introduce more complex alterations as they become accustomed to smaller shifts. This approach smooths out the transition and creates better acceptance at each step.
Evidence-Based Management (EBM) is the foundation.
What is Evidence-Based Management? EBM guides organizations seeking to make informed decisions. Rather than relying on gut feelings or anecdotal experiences, EBM emphasizes the importance of concrete evidence. Think of it as the scientific method for organizational change.
Why is this so crucial? In today's business, mistakes can be costly. Pivoting based on mere hunches can lead to misdirected efforts.
EBM provides a systematic approach to decision-making, ensuring that data and proven practices back every step taken. This increases the chances of success and instills confidence among stakeholders. They can rest assured that the organization's direction is determined by robust analysis, not fleeting trends or personal biases.
The four key value areas (KVAs)
KVAs offer a way for organizations to evaluate their performance and potential. They act as metrics, guiding leaders to focus on what truly matters. There are four main areas to understand how well a business is doing. Let's break each one down in simple terms.
● Current value. This is about asking, "What's working well for us right now?" Maybe you have a product selling like hotcakes or a service everyone loves. It's important to know what you're doing right today.
● Unrealized value. Here's where you ask, "What more can we do?" It's like spotting a chance to make more money or reach more customers. For example, there's a new market you haven't tried or a feature you can add to a product.
● Time to market. How fast can you take a new idea and make it available to customers? The quicker you can do this, the better you can keep up with changes and what people want.
● Ability to innovate. This one pertains to coming up with new ideas and trying new things. Can your business change when needed? It's not just about new products but also finding better ways to do things or using the latest tools. Being able to innovate means you're ready for the future and won't get left behind.
Combining EBM with Larman’s Laws
Introducing change in a business setting can be a tough challenge. But the path becomes clearer when you have the right tools and insights. Combining the data-driven approach of Evidence-Based Management (EBM) with the organizational insights of Larman’s Laws creates a potent mix.
Together, they help you make the right changes. When these two powerful practices come together, they create a dynamic combination. Here are some of the compelling results you can expect.
Evidence over gut
You know how sometimes you just have a "feeling" about something? Well, having more than just a feeling when making big decisions is a good idea. It's like choosing between buying a car because it's your favorite color versus reading its reviews and performance metrics.
Larman’s laws remind us that just because "it's always been done this way" doesn't mean it should continue that way. So, when people challenge new ideas, having hard evidence helps back up those decisions.
Small changes, big impact
EBM and Larman suggest a similar approach for business changes: start small, see what works, and then go big. It's less about how fast you're going and more about heading in the right direction.
Real-world example: Organizational change done right
While the need for transformation is widely acknowledged, the path to achieving it can often be ambiguous. What does genuine, impactful organizational change look like? How can companies transition from the theoretical realm of change management principles to practical, tangible results?
This section illuminates the journey by spotlighting A real-world example where an organization successfully harnessed the principles of Evidence-Based Management (EBM) and the insights of Larman’s Laws.
Let’s see these concepts in action.
In late 2008, the Gap Inc. Outlet Division President sat down with the Gap Inc. CEO to discuss implementing ROWE within Gap Inc.’s second most profitable business. Our CEO, admittedly somewhat of a “traditionalist” regarding office work practices, didn’t like it. He worried about whether teammates would be available when needed and productivity would suffer. We showed him the statistical data from Best Buy and even the NIH/University of Minnesota study, but he was not impressed.
“That doesn’t mean it will work here,” he said. “This business is too important for this not to work,” he said. “You need to first prove no harm” by piloting the solution in a subset of the population. “If you can prove it does no harm,” he finished, “You can do it wherever you want.”
Although I believed in ROWE as an evidence-based practice validated by scientists, he wanted hard numbers illustrating that ROWE wouldn’t negatively impact business outcomes at Gap Inc. in sales, margin, productivity, service, and engagement. How would we gather all that data and isolate the effects of ROWE?
With the partnership of our employee engagement, analytics, finance, and operating teams, we organized a rigorous cross-functional pilot of ROWE, establishing baseline measures of performance, experimental and control groups, pre- and post-pilot testing criteria, and structured training for the experimental group.
We spent extensive time with Best Buy to understand what they had measured and what had been successful (and not successful) in producing reliable results. (The chart below illustrates how we leveraged each of the four types of evidence from Evidence-Based Management to establish ROWE’s efficacy.)
[Credit: Eric Severson]
For the next year, we conducted multiple tests of ROWE in different cross-functional pilots—each time yielding similar results: employee turnover dropped by half, engagement improved by statistically significant margins, and every other business outcome we measured, from productivity to service levels to PTO balances, improved meaningfully.
Perhaps most significantly, while there was substantial evidence that ROWE had improved certain operating outcomes, there was no evidence that ROWE had harmed any.
Practical steps for leveraging Evidence-Based Management
Are you ready to make a difference in your organization but unsure where to begin? We’ve laid out four detailed, straightforward steps to get you down the right path.
Look (and assess) before you leap.
Get a feel for where your organization stands right now. Those KVAs from Evidence-Based Management will perform as your personal GPS and guide you on what to focus on. They're the starting point for understanding what's going well and what needs a revamp.
Address the culture
Ever tried pushing a car with the handbrake on? That's what trying to change an organization without considering what its company culture feels like. Larman's laws remind us that you'll face an uphill battle if the team isn't on board. Company culture can end up being the biggest roadblock to change.
Sit down, have those conversations, and listen. It's all about creating a space where everyone feels heard, understood, and valued.
Start small and scale.
Starting with a small group is a smart recommended practice when introducing something new. It could be a new software or even a fresh approach to meetings. Get their feedback, refine, and then expand. It's all about baby steps and celebrating those little wins. Let the results speak for themselves.
Monitor and iterate
Change isn’t a one-and-done deal. Imagine if your favorite apps never updated; they'd become outdated quickly. In the same way, always be on the lookout for how things are working. Collect feedback, make tweaks, and continually evolve. Embrace change as a constant companion, not a fleeting visitor.
You don’t have to handle change alone.
Larman’s Laws and EBM are more than just concepts; they're practical tools to guide organizational change efforts. Feeling uncertain or overwhelmed? Remember, there's no need to tackle everything solo. Agile-ity is here to help. They offer expert coaching to support and guide you through the process. Ready to take the next step?
Interested? Partner with Agile-ity to make strategic, impactful organizational changes.