CHANGE MANAGEMENT No company plays the game alone

The COVID-19 pandemic has been a necessary driver of change for many companies. Faced with unforeseen challenges, companies have identified needs and solid arguments for organizational changes. Is the change due to the pain we are feeling, or are we facing an unexpected opportunity? Aalto University Executive Education is one of the world’s leading training organizations providing coaching and development services in business management. Upcast Review had the pleasure of an interesting discussion with Professor Pekka Mattila, group managing director and professor of practice at Aalto EE.

Pekka Mattila is familiar with the dramatic arc. At the start of our meeting, he describes how the line between pleasure and pain truly is blurred.

“The most painful part of an organizational change is the diagnosis that stems from the organization’s pain. We are being forced to change because something has not been done, or has not been reacted to. In itself, managing change triggered by pain is no harder than managing growth. However, the change manager usually finds themselves wondering whether the organization could have done something more, whether the company had perhaps grown complacent. When managing growth, justifying changes is usually harder, since there is no specific problem to be fixed”, Pekka Mattila says.

The pandemic that took the world by surprise was a threat familiar from many hypothetical scenarios, but both its speed and the efficiency with which it enveloped the world came as a surprise. Countless doors slammed shut in March 2020, but new doors opened up elsewhere.

“Business sectors related to comfort and leisure at home have seen the biggest boom in their history. Food, paint, wallpaper, house plants and boats for summer cabins have sold in record-breaking numbers. At the same time, event and hospitality services focusing on spending time together have run face first into a wall. I dare to question whether the suffering has resulted any true innovation. In my view, a take-away bag from a Michelin-starred restaurant is not a sign of creativity, it is simply proof of a desire to survive. Nowadays, many companies have the momentum to reinterpret the core of their strategic abilities. And many companies could also afford to do this and make themselves ready to strike when the pandemic is over.”

Agility to embrace change

Upcast and Aalto EE have many things in common. They are both cosmopolitan with roots in a corner of the world that is often cut off news broadcast maps because there is not enough room on the screen. Both organizations have been remarkably successful in highly competitive, global markets. So what is the secret to Aalto EE’s success?

“We Finns have always been told that Finland is the link between East and West. This is a beautiful idea, but, based on the feedback of thousands of global clients, I can safely say that people, without exception, see Finland as a distant dot on the periphery. To succeed, we need to do more than just open our doors to visitors. And to be seen, we need to actively contact people and come up with innovative ideas.”

Aalto EE practices what it preaches. Thanks to new construction, the vacant yet iconic old main building of Helsinki School of Economics has been restored to its former glory. It is now the new HQ of this global training organization providing business management coaching and development services. However, Mattila emphasizes that change is not in the renovated walls themselves, but in the way of thinking.

“When the pandemic hit in the middle of the renovations, it turned out to be the final wake-up call for us to seize the moment and truly embrace the message of agility we preach to our customers. In March 2020, we decided to transform all our classrooms into studios. We refined our processes to suit the new situation. Now, with the renovations completed, all our new premises are online spaces that are not dependent on time or space. A crisis can also create new competitive advantages. In a networked world where travelling is temporarily challenging, Helsinki and Finland are no longer distant corners of the world but rather places with equal, high-quality access points.”

What prevents change?

Many organizations and teams are often just as change-driven as their leaders. A change-resistant organization often has a proud leader who cannot be bothered with the needs of other businesses. They have seen everything and rely solely on their own instincts. Being humble is a key characteristic of a good leader; they are able to listen to others and do not hesitate to borrow things from others. They invite commitment from their community and add to its resilience and elasticity. The ability to change means the ability to recover from hardships.

“Change is mostly about leadership. The leader must be able to ignite the passion they hold inside in others, too. It is easy to become inspired by change, but long-term commitment is often the hard bit. It is natural for humans to only be excited over

something for a short period of time. We have had the privilege of providing coaching for the change stories of hundreds of companies. Experience has shown us that the change must be fairly quick and also visible: Some of the results need to be achieved quickly, and it should be possible to prove that even the smallest of steps will take the process toward greater success. Each organization has some low-hanging fruit. A good leader motivates their organization by encouraging their employees to also pay attention to these elements. Furthermore, it is essential that those involved understand that change management is not project management. Instead, managing the change of operational methods and values is the crucial part. There has to be a vision for how the whole team can move in a better direction than its competitors, and faster, since we are never playing alone.”

Which came first: change readiness or agility?

Let us go back to the pandemic. It is a crisis comparable to war, which highlights the organizations’ strategic readiness for change. Every fundamental change pushed through in changing circumstances also requires the organization to be agile. This is similar to the problem with the chicken and the egg. When providing coaching on business management, which should be promoted first: change readiness or agility?

“It is true that reacting to an acute crisis requires an organization to be agile. Simply dismantling and analyzing the needs for change helps to build the playbook of change. We come to realize that it is not about the chicken or the egg thematic anymore. It is about continuous adaptability. The leaders of future success stories have already shifted their gaze to the next discontinuity point in the future, after the COVID-19 pandemic. It could be a disruption in the delivery chain, an ash cloud, an acute currency crisis. I dare say that a discontinuity such as the ongoing pandemic was a blessing in disguise for the many, even arrogant western organizations that keep rolling onwards on their tracks like trains. In developing countries, these sorts of discontinuities are part of everyday life. This is why companies in the western world with established market positions will face increasing competition from growth companies in developing countries. They are used to discontinuities, and agile movements to them are a strong, global competitive advantage.”

Nothing is as important as diversity. And that is not particularly important either.

Diversity in company management has usually been considered a driving force, especially when it comes to innovation. However, in recent studies, the diversity of senior management was only rated the 10th most effective factor impacting an organization’s approach to innovation. Does this mean that diversity is not that important after all?

Investing in staff competence and staying up to speed outside their current expertise is an even more important driver of innovation. But here is how I would encapsulate the critical demand for diversity in an organization: inspiring role models are more important for an organization than any goals listed in its vision or values.

And in this last sentence, Pekka Mattila has also encapsulated himself.