George Westerman is a principal research scientist with the MIT Initiative on the Digital Economy and coauthor of the award-winning book Leading Digital: Turning Technology Into Business Transformation, published by Harvard Business Review Press in 2014. He tweets @gwesterman.
What’s the most powerful driving force behind digital transformation? It’s not mobile or analytics or even artificial intelligence (AI), although those are enablers. It’s not fast-moving, well-funded digital startups, although they accelerate the pace and put pressure on incumbents. It’s something deeper and more overarching; something powerful yet underappreciated in management. The most powerful driver of effective digital transformation is dissatisfaction.
But wait. Haven’t management scholars and smart executives spent decades working to remove dissatisfaction? Their goal is satisfaction, not dissatisfaction. Experts in sales, operations, and innovation all argue to increase customer satisfaction as a key driver of revenues: Happier customers buy more and generate more referrals. Employee satisfaction gets similar advice: Retailers with higher employee satisfaction tend to have higher customer satisfaction, and satisfied employees in operations tend to have higher attendance rates, produce higher-quality outputs, and have less turnover. So why would we ever want dissatisfaction?
The problem is that employee satisfaction can be a double-edged sword. While satisfied employees are good for current activities, that very satisfaction can inhibit innovation. Transformative innovation is difficult. It is far easier to stick with what we know works and tweak the current process than it is to start over. People who are satisfied with the current way of doing business are not likely to transform it.
People who transform their organizations must be aggravated enough with the current situation that they’re willing to bear the effort and risk to change it. Leaders who want their organizations to continuously transform must not only look for dissatisfaction on which to capitalize, but also be willing to cultivate dissatisfaction in their employees.
Why Companies Need More Dissatisfaction, Not Less
The right kind of dissatisfaction is a mindset of constantly questioning the status quo and striving for more-than-incremental change. The wrong kind is constantly finding fault with the current situation, arguing that it is somebody else’s fault and assuming it’s somebody else’s responsibility to fix. Where the wrong kind of dissatisfaction (or the wrong kind of dissatisfied person) is demotivating, the right kind of dissatisfaction is highly inspiring. It’s also relatively rare, even among successful top executives.
However, dissatisfaction can be taught. Under the right conditions, it can be contagious.
Asian Paints Ltd., India’s largest coatings manufacturer, is a case in point. It was successful, but not enough. Looking to increase efficiency, the company’s strategy head demanded, “Why do we make and sell paint 13 different ways just because we have 13 regions? We’re wasting money and annoying our customers.” The executive team decided to standardize processes across the 13 regions. Then, disappointed with the productivity of the company’s 3,000 salespeople, executives built a call center to take orders from retail stores, so that salespeople could focus on actually selling. Later, tiring of hearing customer complaints that were really the fault of the painter and not the paint, the company introduced a new Uber-like business model of house painting services. During the same time period, Asian Paints introduced many other incremental innovations, often at the suggestion of highly satisfied employees or quality teams. But it was dissatisfaction, not satisfaction, that drove the senior executive team to transform the company again and again.
Seventy years ago, social psychologist Kurt Lewin described a three-step process for organizational change: unfreezing, changing behaviors, and then (re)freezing them. Unfreezing is convincing people that the current situation is not working so they understand the need to change. Changing behaviors involves introducing new ways of working and helping employees with the transition. Freezing then institutionalizes the practices so that they continue at high quality and productivity even as individuals come and go. This simple yet powerful method has stood the test of time, inspiring a long list of organizational change scholars and methodologies.
However, while Lewin’s method helps to drive change when leaders are certain of what they want, the digital economy demands something extra. Today’s leaders need to manage a paradox of freezing good behaviors while asking their people to be continually unfrozen and open to change. Organizations need to keep their employees highly satisfied so that they do business well, while keeping them (or a subset of them) constantly dissatisfied with the way the business works.
By sowing the right kind of dissatisfaction, leaders can help their employees and customers be more satisfied while driving their organizations to higher and higher levels of innovation and value.
How to Foster Dissatisfaction at Work
Here are some ways to sow dissatisfaction — the right kind of dissatisfaction — in your organization:
Drive dissatisfaction in your core team, and ask them to do the same with their teams. Constantly challenge your leaders to find what is wrong, or will soon be wrong, with your current way of doing business. Silicon Valley road shows and external speakers can scare people by showing threats that are just around the corner, while also showing new opportunities and paradigms. In between these external provocations, you can foster dissatisfaction by constantly challenging people who rely on easy assumptions about “what customers want” or “how we do business around here.” The digital age is proving many predigital assumptions to be false. For example, while people may still want personal service, they often don’t need it from a person. And formerly impossible automation challenges are rapidly becoming possible in an age of self-driving vehicles, chatbots, and computers that can write prose.
Seek and support dissatisfied employees. Online conversations with senior leaders, much like former GE CEO Jack Welch’s famous Work-Out Meetings, provide employees a direct opportunity to tell the bosses about what’s broken in the company. You can engage in two-way communications at scale, rather than waiting until executives can visit each company location. Hackathons and innovation contests are inexpensive yet effective ways to identify dissatisfied people you may not know about. Seeding corporate innovation units with ideas from these events can create results quickly. Celebrating the right kinds of dissatisfaction can inspire others to air their grievances in the right way, to the benefit of all.
Turn “customer obsession” inward. Silicon Valley giants say they will never rest in their mission of delighting customers in new ways. Methodologies like design thinking and customer journey mapping help companies move beyond what customers say they want to discover what customers really need. Turn those methods inward, focusing on employees and internal processes in the way you focus on customers and their journeys. What workarounds have employees had to endure for years because of a bottleneck, an outdated system, or an overly restrictive compliance rule? How can you eliminate long-standing headaches by changing traditional roles, as Asian Paints did by launching its painting services and by moving order-taking from salespeople to a call center?
Don’t be too happy with progress. Use every accomplishment as a stepping-stone to a new challenge. We’ve all had great bosses who have inspired us to excel by never being completely satisfied with even our best work. Be that kind of boss for your organization. Celebrate each successful transformation, but then constantly ask your employees, “What else can we do now?” Identify what is still broken, or what “impossible” challenges are no longer impossible. Executives at Australian-British mining company Rio Tinto Group are rapidly achieving a vision of mines without miners, but the transformation didn’t start that way. Earlier, frustrated by not knowing real-time mining status, executives implemented sensors and centralized control centers. Then, not satisfied just with introducing simple automation, the company’s leaders invested in intelligent machinery for some tasks. Later, they pushed for changes that would radically reduce the organizational trauma of workplace accidents by using autonomous vehicles in dangerous environments and allowing workers to do safer tasks that machines cannot do. Rio Tinto never rested on its laurels after each successful transformation — it kept searching for new sources of dissatisfaction and addressing them with creative transformations.
Ask your new employees to remain dissatisfied. New employees tend to undergo a conditioning process where their colleagues quickly teach them what questions not to ask. Catch these new employees before they have been shut down and ask them to remain vocal. What seems stupid about the way we work? If they could do anything differently, what would it be? Then feed the ideas, and possibly the new employees themselves, into innovation groups to test them.
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Strive for Satisfied Employees — Who Are Constantly Dissatisfied
Harvard history professor Laurel Thatcher Ulrich famously wrote, “Well-behaved women seldom make history.” That’s a good axiom for the workplace, too: “Satisfied employees seldom transform their companies.” Employee satisfaction is essential for ongoing activities, whether in operations or customer-facing processes. But something more is needed for innovating in the fast-moving digital economy.
Strive to create a set of employees who are satisfied with their jobs but always less-than-satisfied with the way the company does things. Then give them the support to make transformation happen over and over again. Managing this paradox — satisfied employees who are constantly dissatisfied — is a fundamental job of today’s managers. Satisfied employees provide strong capabilities upon which to build, and fostering their dissatisfaction helps them create a steady stream of new and better capabilities.