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These days, managers need to accelerate change, since organizations can rarely change as fast as necessary. The rate at which organizations accept new ideas, viewpoints and methods is frustrating at best, giving rise to cynicism and resignation in otherwise highly motivated employees.
But change is not uniform. It can vary from minor adjustments, trimming around the edges, to revolution, a wholesale replacement of systems, products, or processes. And managers who don't understand the gradations of change—and use such understanding to implement change—are at a serious disadvantage as they try to adapt to the future. If you understand the nature of change, you can institutionalize comprehensive process innovation (that is, innovation that is continuous rather than a series of unrelated, crisis-driven events).
Creativity, innovation, and continuous improvement involve ideas, and ideas are about change: When someone has an idea, thinking changes; when an idea is implemented, things change. Some changes are easy; others seem virtually impossible. Leaving home 10 minutes early to beat the rush hour traffic is a small change. But ideas that will improve overall quality in an organization require people, processes, and groups to change in fundamental ways.
The Seven Levels of Change Model
Consider looking at change as seven increasing levels of difficulty—from easy to virtually impossible. Each level is more radical, complex, and challenging than the one preceding it.
This Levels of Change model can be superimposed on the visions of any department, division or organization, and then imbedded within its goals, culture, and day-to-day environment. When a group moves from learning to doing, the model quickly becomes an integral component of organizational behavior.
Level 1: Efficiency—Doing Things Right
At Level 1, the theme is Efficiency. The easiest change to make is learning to do things right. This is often done with the help of an expert who understands an operation and explains standard procedures in the hope of improving efficiency. Changes at Level 1 are largely personal adjustments to new standards and procedures; they incur low risk and require little effort.
Level 2: Effectiveness—Doing the Right Things
At Level 2, the theme is Effectiveness. We develop an overall picture by first gaining a thorough understanding of all aspects of an activity, then focusing on actions that will give the largest contribution. According to the Pareto Principle, 20 percent of all the things being done, generally speaking, yield 80 percent of the payoff. To maximize effectiveness, shift energy to that 20 percent (the right things), and apply Level 1 thinking to Level 2 priorities to do the right things right.
Continuous improvement is often defined as simultaneously doing the right things and doing them right. Someone who has made enough Level 1 and Level 2 changes to become comfortable in a new situation is now competent. Thus moving through Level 1 and Level 2—efficiency and effectiveness—involves change primarily at a personal level.
Level 3: Cutting—Doing Away With Things
At Level 3, the theme is Cutting. We use the Pareto Principle to cut out the 80 percent of actions that yield only 20 percent of the value, and redirect those freed-up resources to higher levels of change. In the simplest case, Level 3 change focuses on eliminating waste. If this can be done systemically—keeping all organizational relationships, processes, and subsystems in perspective—major results can be achieved. At this level, we take the initiative to correct processes quickly, easily and inexpensively, without asking for upper management approval. Level 3 changes involve low risk and low effort, but they can directly improve an organization's efficiency and be highly visible, both internally and externally.
Level 4: Enhancing—Doing Things Better
At Level 4, the theme is Better. Here we analyze an organization’s core activities (the fruitful 20 percent remaining after Level 3) and figure out how to improve them. Perhaps we find methods to speed up testing, move up deadlines, increase function, or cut downtime. Work process redesigns are large-scale efforts to bring about Level 4 changes in combination with Level 3. Level 4 changes make things more effective, more efficient, more productive, or more valuable.
Level 5: Copying—Doing Things Other People are Doing
At Level 5, the theme is Copying. We see here the first clear transition from incremental thinking to fundamental change. Copying, learning from others, and “reverse engineering” can dramatically boost innovation, quickly and more cheaply than starting from scratch. Benchmarking how other laboratories operate (regardless of their industry) and then enhancing their discoveries and achievements (using Level 4 change) is the hallmark of the adaptable innovator.
Many managers are still uncomfortable at this level, partly because they are inwardly focused and therefore remain unaware that others are doing things worth copying. In many organizations, a "Not Invented Here" mentality resists imitation, forcing continual reinvention of the wheel.
Level 6: Different—Doing Things No One Else is Doing
At Level 6, the theme is Different. We take a fork in the road—by doing something very different or very differently. Such trailblazing and risk-taking can bring about genuinely new things, often by synthesizing seemingly unconnected concepts, technologies, or components—or by totally shifting perspective about possible uses of a product. In process-oriented operations, Level 6 at the extreme combines Levels 3, 4 and 5—cutting, enhancing, copying, and adapting—into reengineering: revolutionizing processes and procedures so they become unrecognizable.
Level 7: Impossible—Doing what can't be Done
At Level 7, the theme is Breakthrough. Technology, market constraints, resource limitations, or company culture too often pose seemingly insurmountable barriers. Discoveries at this level frequently build on paradigm shifts or audacious visions. They produce bold, brilliant, significant and long-term forays into the unknown. Change at this level reflects the highest degree of imaginative thinking and is almost invariably seen by others as a revolutionary or shocking departure from convention.
Albert Einstein pointed out the importance of such thinking: "The significant problems we face today cannot be solved at the same level of thinking we were at when we created them."
Very few Level 7 changes are implemented as they were first conceived; instead, they are quickly barraged with Level 4 criticisms aimed at eliminating their weaknesses. Those that survive often produce innovative spikes of new thinking, performance, or technology.
Level 7 changes can alter an existing industry or create a new one. Lockheed Corporation's famous Skunk Works, for example, has continuously produced quantum leaps in aircraft and space technologies. The radical design of the F-117 "stealth" fighter is a good example of doing the impossible—change so different that it cannot be compared to anything known at the time.
Lower levels of change imply evolutionary, or incremental, improvements, while higher levels result in revolutionary advances. Either can be helpful, but a combination offers the greatest potential to improve an organization. First, however, the model must be utilized—ideas must be transformed into action at some level.
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