Notes

I recently ran the Hedgehog for a group of founders at an event, and the third circle tripped them up the way it usually does.

Most of them heard "profit per X" as a division problem. Pick a denominator, divide, track it. One KPI.

A conversation with one of the founders helped me see it from the other side. Collins's example is Southwest Airlines: profit per plane in the air. Turn it around. A plane on the ground makes no money, and the airline built its strategy around that fact. The denominator exists because planes were at the center.

So the X says what sits in the middle of your business. If you divide by clients or contracts, ask what a client stands for. One you changed something for? One who is satisfied? One who went through your process and reached a good result? Each answer points to a different strategy.

What would you put in your denominator, and what does it say about what you are building around?

Your three-year change plan was out of date the week you finished writing it.

That says more about the problem than about your planning.

In 1994 two consultants interviewed thirteen CEOs deep into major change programs. They expected to hear that detailed, structured plans were what made change work. Instead the message was unanimous, and delivered with some heat:

"Grand plans do not look intelligent from the bottom, and are bad for morale."

Detailed planning for change, the top managers said, does not deliver, is unresponsive, and is unrealistic. The control a big plan seems to give is mostly illusion. Every action has consequences you didn't predict, and every step reveals information you didn't have.

This does not mean drift. The same research names four things that separate an adaptive approach from muddling through:

• Purpose: a clear direction, even when the path is unknown.
• Insistence: holding change as an imperative so the team doesn't slide back to comfort.
• Learning: treating each move as exploratory and reading what it tells you.
• Rigor: doing the honest, hard thinking before the next step.

Note what's missing: a detailed map of months 7 through 36.

The shift is from planning for change to building a live agenda for it. Work the real issues and aspirations the org has now, act, learn, reset.

For a closed problem, like shipping a release or building a bridge, plan it tight. For changing how an organization actually behaves, a fixed plan is the most dangerous-looking safe thing you can hold.

Which of your current priorities are bridges, and which are organizational change?

Ask five people on your leadership team what your company is actually for. You will get five answers.

The Tavistock people had a name for the one that matters, the primary task: the single task the organization must perform to survive right now, which is not the same as your mission statement.

Most teams never agree on it. So sales optimizes for the number, product optimizes for the roadmap, ops optimizes for not breaking, and everyone is working hard in a slightly different direction. The org chart looks aligned. The calendars don't.

Here is what happens when the primary task stays vague. The team quietly adopts a different one that feels safer: stay busy, look comprehensive, avoid the argument about priorities. Tavistock called that anti-task. It is a group defending itself against the anxiety of choosing, not laziness.

Three questions to find your real primary task:

• What state does a customer enter us in, and what state do they leave in? That conversion is the task.
• What would we have to be true at, or we don't survive the year?
• If you watched our calendars and budget for a week, what would you say we are behaving as if we are here to do?

That last one usually exposes the gap. The stated task is on the wall. The real one is in the behavior.

What is your team behaving as if it is here to do?

Most companies are running change. Almost none are running transformation. And they spend the same money on both while only one of them does what they hoped for.

Change is single-loop. You correct the error without questioning what's driving it. You move the chairs, improve the process, roll out better OKRs. The company identity stays put; you're just running the same system more efficiently.

Transformation is double-loop. You question the norms and values underneath the behavior. You change how the system sees itself. The caterpillar doesn't get more room in the jar. It becomes a butterfly.

Most leadership teams say they want the second one and design for the first.

The gap shows up in how the initiative is built:

• Change asks: what do we need to do differently?
• Transformation asks: what do we need to stop believing?

You can see which one you're running in the pre-work. If your leadership team hasn't had an honest conversation about what each person is willing to change (not the process, themselves), then you're running change with transformation language on the label.

Sometimes change is exactly what the company needs. The cost comes from wanting transformation results while building a change initiative, and then being surprised when nothing fundamental moves.

What does your current initiative require?

75% of change efforts fail to make dramatic improvements.

The research points to something more specific than a wrong strategy or people who didn't care: missing or conflicted leadership, and no one holding the change visible and consistent over time.

The numbers are harder to ignore than most leaders want to admit:

• Reengineering succeeds in 20–50% of Fortune 1000 cases
• 50–75% of mergers fail to meet initial projections
• Only 15% of IT projects are rated successful
• 50% of companies that downsized saw productivity fall, not rise

And yet the response to a failed change effort is almost always to try again with the same model: more workshops, a better deck, a new framework.

What the data says is that success is highly correlated with one thing: visible, sustained sponsorship from the top. Sponsorship that shows up in decisions, in trade-offs, in what gets said no to on an ordinary Monday, not in a kick-off all-hands or a signed-off strategy document.

Most change fails in the maintenance, not the planning. And no consultant, framework, or OKR system fixes a leadership team that isn't willing to hold the line publicly, consistently, over months.

If you've tried a change initiative in the last two years and it didn't stick, what was the sponsorship situation?