The rate of change in the business world is accelerating and those that fail to adapt will get left behind. Therefore, how to overcome inertia — or resistance to change — in organisations is a hot topic today.
The first step is to understand the type of inertia you’re facing and its root cause. Not all resistance is the same — some of it is even positive — and you will need different countermeasures to deal with it.
So here are the four types of inertia and an explanation of where it comes from.
1. Attachment to the past (“We don’t want to change the way we do things here”).
This type of inertia often comes from fear of losing trusted relationships with current networks of suppliers. There’s also been financial investment in those relationships — so there’s also an issue of sunk costs. Losing these relationships creates anxiety over losing power and relevance — threatening status. While there’s also a concern that change could lower barriers to entry and let competitors in.
2. Cost of moving forward (“We can’t adopt these new ways of working!”).
This type of inertia arises when there’s a lack of clarity about the future capabilities the organisation needs. Concerns about a possible ’skills gap’ are exacerbated if the new capabilities needed seem scarce or costly. Those charged with building new networks with trusted partners may be concerned at the time this will take. While any new approaches may force changes in management practices, as “past practices” are invalidated.
3. Doubt in the new (“We’re not sure this is better”).
This type of inertia focuses on the immaturity of the new — it may be promising, but is it proven? Concerns arise around the risk of supplier lock whenever there are few alternative suppliers (a valid concern). Concerns also arise about supplier power when there are few secondary sources (another valid concern). There’s also a fear about losing strategic control — as power shifts from the buyer to the supplier.
4. Threat to the current model (“These changes could hurt the business!”).
This type of inertia is tied to protecting past profitability — especially around maintaining high margins. Past success also creates a powerful bias — “it worked before, so why change now?” (A very common trap). Misaligned incentives — promotions, bonuses, KPIs — reward the status quo (this is very problematical). Finally, resistance comes from outside forces — such as financial markets, which penalise bold moves.
Use the table in the picture accompanying this post as a diagnostic to identify which type of inertia, or resistance, you’re facing. In the next post, I’ll share with you the countermeasures to overcome each of them.