How to Uncover Hidden Risks in Strategic Change Initiatives
Photo by Vincent van Zalinge

How to Uncover Hidden Risks in Strategic Change Initiatives

What are you doing to prevent your change initiative being part of the 70% strategic change failure statistic? In addition to the standard well-known change implementation risks, failure is often due to hidden risks.  But, how do you uncover hidden risk?

Risk in strategic change initiatives can be divided into two categories (1) Solution Fit Risk, and (2) Change Process Risk.

Solution fit risk is related to the misalignment between what is being changed and the intended outcome. Change process risk is related to related to inadequate preparation for the change implementation. A key source of hidden risk in both these areas is the social structure of the change. Social structure in an organization is comprised of the interactions of people with each other and their interactions with the technology they use as they engage in the processes of their work. These interactions are often not documented or standardized, but rather are inferred from process documentation and evolve over time. Many hidden risks lie in unidentified hindrances to effective interactions in the new or changing processes. Hidden risks also lurk in ambiguous expectations for employee, management, and potentially customer, interactions during the process of preparing for the change.

Apply Design Thinking to Design the Change and Uncover Hidden Risk

Product designers are well aware of the need to understand how a customer would interact with the new product. As part of the product design process, they actively seek to identify anything that would hinder effective interaction with the product. In design thinking, this core principle is often called developing customer empathy. This is not just an emotional skill. Empathy is the ability to understand what somewhat else is experiencing. For product designers, empathy is exploring and understanding the experience of the customer in using the product.

Change leaders can apply the same principles of design thinking to uncover hidden risks that negatively impact the effective interactions and performance of the stakeholders (people) involved in operationalizing the change. For change leaders, the principle of stakeholder empathy means exploring and understanding the experience of stakeholders in participating in the new or changing way of working. Developing stakeholder empathetic knowledge enables identification of unnecessary hindrances to stakeholder interactions, such as interaction gaps, interaction inefficiencies, conflicting interaction expectations or misinformed stakeholder perceptions that undermine the change.

Learn how to use Empathy to Uncover Hidden Risks

A critical enabler of stakeholder empathy is two way communication. Patti Sanchez writes in a recent HBR article that

Studies on organizational change show that leaders across the board agree: if you want to lead a successful transformation, communicating empathetically is critical. But the truth is that most leaders don’t actually know how to do it.”

Leaders may also feel there is not enough time or they don’t want to open up the possibility of lengthy emotional debates.

Implementing empathy requires more than listening. It also requires soliciting feedback to ensure accurate understanding of the current or potential stakeholder experience and related potential hidden risks. Gaining input from impacted stakeholders on how to mitigate these risks is invaluable to ensuring change success. However, engaging stakeholders in this way can be a time consuming and thus costly process. We have all experienced situations where a picture was worth a thousand words and the picture was much faster to comprehend. Just as designers and architects using visual diagrams to design their products and solutions, change leaders can use specifically designed visual communication tools to scope change. Using visual tools can significantly decrease the effort involved and increase the quality of stakeholder input.