Discontinuous Change

by John R. SedivycloseAuthor: John R. Sedivy Name: John R. Sedivy
Email: john@capecodbranding.com
Site: http://www.capecodbranding.com
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Introduction
I had come across an interesting article this morning in the New York Times called “Job Losses Hint At Vast Remaking Of Economy”. Ordinarily I attempt to not write too much about current events, however I find that this topic has staying power and is timeless. In earlier articles I had discussed the concept of discontinuous change at least in small detail. The reading of the Times article this morning prompted me to write this article which in my opinion is long past due. This blog post will discuss the concept of discontinuous change and why I believe this concept is linked to the current state of the economy and life in general.

What’s Discontinuous Change?
BusinessDictionary.com defines discontinuous change as the following:

“Non-incremental, sudden change that threatens existing or traditional authority or power structure, because it drastically alters the way things are currently done or have been done for years.”

Let’s look at the three components of this definition in further detail. The first aspect is that discontinuous change is non-incremental and sudden in nature. This is perhaps the most important aspect of this concept. It is essentially a shock to the system. One may liken this to being instantly moved from one environment to another, for example an eskimo being instantly transported to the Caribbean without having been to the Caribbean or having awareness of the new environment and then being expected to fend for themselves. It is something completely unexpected that occurs to a system (either an individual, a business, or society) that the result of which will no longer allow the system to function optimally (or even minimally) by using the usual coping mechanisms. As a result the system will be required to either adapt to the sudden change or die.

The second aspect of discontinuous change is that it threatens the traditional authority or power structure. This is worrisome to individuals or groups who lack confidence or profit (or at least have a base level of security) from the way things are. They will go to great lengths to stop change and fight it every step of the way. Those individuals or groups who are confident in their abilities, accustomed to operating in a variety of environments, and are life-long learners in general are excited and thrive on discontinuous change. The great thing about discontinuous change is that once started it is unlikely that it will be stopped, so the latter group are best equipped.

The last aspect of discontinuous change is that it stands to drastically change the way things have been done for a long time – years or even decades. As with the preceding aspect this is terrifying to some, yet exciting to others. For better or worse the playing field will change, and as a result the players will have to change as well, or lose. I hate to invoke the often overly used statement of “change or die” prevalent in so many business books – however in this instance it is assuredly relevant.

In simplest terms discontinuous change is destroying the old to allow for a clean slate on which to build the new. For this reason, discontinuous change is sometimes referred to as destructive change.

Why Discontinuous Change?
To most this concept appears horrible – at least by conventional standards. Why would anyone want to change the way things are currently being done? Why does the current business landscape need to change – after all, many earn a decent wage, benefits, and some vacation time (at least prior to the current recession)? Why would anyone, either as an individual, business, or society subject themselves to such pain? Could anything good possibly come of this?

To answer the last question – yes, most definitely. Although the risks are generally great, there is great benefit to successfully navigating such change. Let’s look at a practical example. A large corporation which has existed for decades wishes to change their way of doing business. They push this forward by deploying a training program to all employees, starting with senior leadership in the hopes that the training will change their way of thinking and as a whole move the organization in a new direction.

The benefit of this approach is that business goes on as usual with little to no disruption to business and new ideas trickle in gradually. The disadvantage to this approach is that as with the benefit – business goes on as usual. Most within the company likely view the training as the latest management fad which will likely fizzle given time. The members of the organization are not incentivized to change, so why do it? Besides, everyone is comfortable as is – why rock the boat or fix what isn’t broken?

Let’s suppose that eventually the change does take hold, it will likely occur gradually and take a great deal of time – perhaps years or even longer to effectively take hold. By this time the changes may not even be relevant. Anyone who has ever served in the capacity of an independent consultant role to a client company will surely attest to the difficulty, if not impossibility, of effecting change in corporate culture – especially that ingrained over years, or perhaps a lifetime. Human nature is deeply rooted  and as a result, extremely difficult to change.

Now take the other extreme – that of implementing discontinuous change to a system – suddenly, not gradually. In the example of our large, established corporation – the owners who wish to implement the change would take the approach of shutting down the corporation and distributing the capital to those entitled – the shareholders. Now the previous owners take their value from the old company and start something new – from scratch. The founders of the new company are each deeply committed to the new direction and overall concept of the new business. They begin doing business with the new methods from day one and every newly hired employee or consultant will be expected to do business in the same manner – after all it is the way they have always done it. Those not comfortable with the new methods will not likely seek employment or interact with the new company as it conflicts with their ingrained style.

Because they are starting something new with founders who are committed to the new approach they are bypassing the difficulties of changing corporate culture in an established firm – which as previously discussed is no easy task. True enough that they will have the challenges inherent to starting a new business, mainly overcoming gravity and generating enough momentum to get the business off the ground, however my assumption is that this challenge is minimized by possessing the capital from the pre-existing business as well as previous contacts.

Sure there was some messiness with introducing the discontinuous change, such as closing the company, layoffs, and reallocation of resources, however in the end people adjusted, some more efficiently than others. Those accustomed to discontinuous change were proactive and take an active role in their career, those who are not accustomed obviously had a more difficult time. In the end it is worth noting that change is inevitable – it is the size and speed of such change which differs between the varying approaches.

Discontinuous Change Today
So you may be asking what this concept of discontinuous change has to do with the current economy and state of things. The Times article referenced in the introductory paragraph states that many of characteristics of today’s economy are “hinting” at a restructuring of a new economy. Specifically that many of the jobs lost will never return to this country, or may not even be outsourced. Consider the statistics below taken from this very same article which show the amount of jobs lost for each sector during the month of February 2009:

1. Manufacturing – 168,000 jobs
2. Employment services – 88,000 jobs
3. Transportation and warehousing – 49,000 jobs
4. Financial services – 44,000 jobs
5. Hotels and restaurants – 32,000 jobs

Health care was the rare exception which showed an increase of 30,000 jobs. Concerning the national unemployment rate – it is 8.1% as of February, with Detroit leading the way with 10.6%. At first glance the unemployment rate may not appear to be very high in the overall scheme of things, but I ask you to think of it another way. If you were in a room with nine other friends, that would translate to one of you being out of work – one out of 10 people are not working.

My opinion is that these statistics are more than a “hint” and are more a symptom of discontinuous change. The economy, our nation, and the world as a whole is rapidly changing – drastically. I maintain that the issue is that most are not seeing it as such, and are attempting to solve the same problems with the same solutions. If you don’t believe me consider the following:

The stimulus package meant to address this problem is reminiscent of the “New Deal” rolled out during the Great Depression. Many hold comfort in this as it’s familiar, but again my thought is that you cannot address new problems with previously deployed solutions. The current system is addressing the problem as in the past – laid off employees apply for unemployment, receive benefits, and hopefully prior to benefits running out they will have a new job.

This is not meant to be a critique of the government or present administration – they have a tough job – definitely the most difficult that I have witnessed in my lifetime. The points made above are meant to drum awareness. I had first come across the concept of discontinuous change in Tom Peter’s book “Re-Imagine” which I have mentioned on a few occasions in this blog as I believe it is a brilliant work. While reading this book about a year ago I found it relevant to my life as I was transitioning from life as an employee to that of an entrepreneur – at that point I did not see it relevant to the economy.

However last Fall I was seeing hints that discontinuous change may be relevant to the current state of things. As of the time of this writing I am absolutely convinced without a doubt that we are in a cycle of discontinuous change, and unless people view it as such, the situation will not get any better. Obviously if my assumptions are correct people will come along, some faster than others. The leaders will have access to the best opportunities while the followers will have the remaining left-overs.

For a detailed discussion on how to navigate a period of discontinuous change I am going to refer you to my article entitled “A Different Way Of Thinking”.

What Does The Future Hold?
I personally believe that a restructuring of the economy will take place. The leaders will be proactive and start their own businesses – either as a new company, or as a freelance worker. This will be an exciting time for entrepreneurs. Those who become laid off and determine that the old method of blasting resumes to employers does not work, will eventually become discouraged and set up shop for themselves as well. Finally, those employees working for employers who have not downsized them may even follow this path themselves – I have noticed a trend that as the economy worsens employers have begun taking advantage of the situation – expecting more work for less pay. Eventually high performers will tire of this and move on to more fruitful endeavors – mainly that of becoming their own boss and controlling their own destiny. I guess we will just have to wait and see how things pan out – however if I was a betting man this is where my money would be.

How Are You Addressing Discontinuous Change?
In closing I would be interested in hearing your thoughts on the current economy, the changing world, and how you are navigating this period of discontinuous change. I will kick things off – my strategy for overcoming the present state of things was threefold – I brought on added expertise and capabilities by bringing on a business partner, I flattened expenses and widened my perspective by relocating to Cape Cod, and finally in addition to my original engineering consulting business Amy and I combined forces to create Cape Cod Branding which ultimately led to the creation of this blog. And most importantly, we continue to evolve each day while maintaining our core competencies.

I would be interested in your comments on how you as an individual or business are addressing discontinuous change. What are you doing differently to account for different circumstances? Have these efforts been successful?

We are currently experiencing unparalleled discontinuous change which requires new strategies for a new world!

-John R. Sedivy of Cape Cod Branding

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