Friska Wirya on change management in the boardroom

Change management expert Friska Wirya advocates for the inclusion of a chief change officer in the C-suite, stressing the importance of cultivating a mindset and culture to enable digital transformation within modern organisations.

Drawing from my experience at Newcrest Mining and Worley, I want to highlight the critical role of change management in successfully executing strategy and driving innovation.

This challenges the notion that failure should be discouraged and argues for a more psychologically safe environment that actually celebrates failure, viewing it as a catalyst for growing future-fit organisations.

The global coronavirus pandemic demonstrated the importance of planning and managing change effectively, with entire countries suffering social, economic, financial and psychological impacts from mismanaged change. Some of these impacts were life or death.

In today’s rapidly evolving business landscape, it is “death” of a different ilk. It’s about whether your business is being crippled, or if it has a competitive edge attributed to change.

Organisations must adapt and transform to remain relevant and profitable. The glacial pace that most of the ASX 200 are undertaking in dealing with technological change is seeing the digital revolution disrupt traditional business models and upend the value chain.

To navigate this dynamic environment successfully, change needs to have a seat in the boardroom. Innovative change must become a core value.

Only a decade ago, roles like chief digital officer, chief customer officer and chief data officer were unheard of. Now, the inclusion of a chief change officer (CCO) is also necessary to cultivate a culture to enable inevitable digital transformation.

Effective change management is more than just a buzzword — it is a strategic discipline that empowers organisations to navigate transitions, realise the benefits of new technologies, and maximise the potential of their workforce.

The CCO is an executive-level position responsible for overseeing an organisation’s change initiatives, aligning them with business goals and driving a culture of agility and adaptability.

Some argue change management can be delegated to lower levels in an organisation, but the complexity and urgency of the digital landscape demands a CCO’s dedicated focus and authority.

Don’t be afraid to fail fast

One of the primary challenges in driving successful change is a fear of failure that permeates many organisations. Traditional business cultures often stigmatise failure and discourage risk-taking. However, in a world where innovation and continuous improvement are prerequisites for survival, we must redefine our relationship with failure.

Rather than something to be avoided, it must be celebrated as a catalyst for growth that provides valuable lessons, sparks creativity and propels organisations forward.

To create a psychologically safe environment where failure is celebrated, a culture that supports experimentation, learning and knowledge-sharing must be created.

This won’t happen overnight. People were sceptical when Worley commenced its innovation journey. Its predominantly engineering workforce was accustomed to thinking in a linear, logical fashion.

However, to anticipate and deal with the inevitable problems of future change, people were taught how to think differently — to problem-solve and iterate creatively.

It was only after ongoing design-thinking sessions and consistent role modelling, with leaders visibly supporting the innovation program, that an increase of quality innovative submissions occurred. Innovation carries a high degree of failure.

Organisations should encourage employees to take calculated risks, providing them with the necessary resources, autonomy and support to fail fast. By doing so, we foster a culture that not only tolerates failure, but embraces it as a stepping stone to success.

The CCO plays a vital role in promoting this culture by championing the mindset of experimentation, vocalising support for continuous learning and encouraging momentum for this culture change.

Digital transformation

The rate at which people feel psychologically safe determines the extent to which innovation is practised. Digital transformation has become a top priority for organisations, accelerating since the global pandemic.

However, despite the significant investments made in technology and infrastructure, the failure rate of digital transformation initiatives such as tech-enabled innovation remains alarmingly high.

A major reason for these failures is the tendency to prioritise technical aspects while overlooking the human element of change. To achieve successful digital transformation, we must shift our focus from speeds and feeds to feelings and fears.

While technological advancements are crucial for digital transformation, we must remember that organisations are made up of individuals with unique beliefs, emotions and behaviours.

Change inherently disrupts established routines and creates uncertainty, leading to resistance and anxiety among employees. Ignoring these human responses and solely focusing on the technical aspects of digital transformation is like sailing without a strong wind — you won’t get far.

People will not readily embrace change once new technologies are introduced. There are psychological and emotional factors that can hinder adoption and acceptance.

Many will fear job loss, feel overwhelmed by the learning curve or doubt their ability to adapt to new ways of working.

Without a CCO dedicated to addressing these concerns and providing the necessary support, organisations risk encountering significant roadblocks in their digital transformation journey.

Many high-profile tech fails cite a lack of change management as the root cause, the most infamous of these fails being the 2011 abandonment of the British National Health Service health records project, reported to have cost more than £10b.

Moreover, the CCO should work closely with other leaders to align change initiatives with the overall business strategy.

Digital transformation is not a standalone project; it should be an integral part of an organisation’s vision and long-term goals. By embedding change management into its fabric, the CCO ensures the entire leadership team is committed, willing and able to drive change and innovation.

Inclusive leadership

It is essential that organisations adopt a people-centric approach to change management. It begins with a foundation of open communication, transparency and empathy.

At SMEC, I work with its leaders to actively listen to employee concerns, involve them in the change process and orchestrate opportunities for feedback and two-way dialogue. By involving employees from the early stages of any transformation, letting them have a voice and a vote, organisations can gain valuable insights, build trust and foster a sense of ownership.

At a recent leadership offsite, a 100 per cent positive feedback score about the culture transformation was achieved.

Leadership plays a pivotal role in guiding and inspiring employees through change. Executives should actively communicate the vision, rationale and benefits of digital transformation to create a sense of purpose and alignment. They must lead by example, demonstrating openness to change, adaptability and a willingness to learn. This leadership style builds a future-fit organisation.

Change is the next normal. A dedicated change management team or CCO ensures the people side of transformation is given the attention it deserves.

A CCO is essential for any organisation aspiring to thrive in a business landscape marked by uncertainty, disruption and flux. By recognising the critical role of change management early, we can cultivate a mindset and culture that embraces the new and foreign, and encourages experimentation.

Failure should be celebrated as a catalyst for growth, not feared as an impediment. It is time to elevate change management to a strategic function — it is the engine that will power organisations forward in their relentless pursuit of innovation.

In the past, our culture evolved to keep up with technology. To enable our organisations to reach the next level of performance, we need to simultaneously work on the cultural leap as well.

This article first appeared under the headline 'Change is the next normal' in the August 2023 issue of Company Director magazine.