Why Organizational Inertia Is Killing Your Transformation—And What to Do About It

Even we were surprised when our recent research into transformational leadership found that nearly three in four business executives believe their organizations will cease to exist in the next decade without fundamental transformation. The urgency around fundamental change within companies is now at a fever pitch.

There isn’t an industry we can name that isn’t experiencing significant disruption. But no matter how clear the marketplace or customers make the case for transformation, moving an enterprise from one state of being to another is an enormous challenge. Our research of over 1,000 CEOs, C-suite executives and next-generation leaders found that 71% indicated only low to moderate success in their organization’s transformation efforts. Though they aren’t reporting that their transformation is an outright failure, these leaders are missing significant opportunities.

From our experience in supporting CEOs and C-suite leaders in creating intentional and meaningful change inside complex systems, we often see that the key barriers to transformation are not always identified or addressed. Most leaders understand the need to communicate their vision, devise and cascade their strategies, and look to evolve the operating system to support the new approaches to winning in the marketplace. But too many leaders fail to identify and overcome what we call organizational inertia.

Isaac Newton’s First Law of Motion (sometimes called the Law of Inertia) is that a body in motion will remain in motion unless acted upon by an outside force. Every human system, whether a business, team, organization, or institution, has a way of being. Think of it as the status quo or the way things are done around here. Changing how things are won’t just happen because the CEO says it should. And often, the longer an enterprise has been stable and the more successful it’s been, the more that inertia will hamper any change effort. Human beings are comfortable in the familiar, the tried and true even when they are based on assumptions or realities that are no longer true.

The three types of inertia holding your organization back

Organizational inertia presents itself in three distinct forms—each requiring a different approach to overcome.

1. Insight inertia: Seeing the need

Insight inertia is a lack of awareness—or unwillingness to accept—that things need to change. Our research revealed that 68% of leaders whose organizations had not transformed in the past five years indicated that insight was the primary barrier to change. All successful transformation efforts begin with a felt-need for change.

This idea, that the forces for change must be stronger than the natural resistance to it and that the people in a system must understand that change is necessary, traces its roots to the work of Kurt Lewin, the German-American social and organizational psychologist. Short-term mindsets, lack of a perceived need, and comfort with status quo performance all conspire to prevent transformation initiatives from getting off the ground.

Jack Welch, the legendary CEO of GE, used to tell his senior leaders that they needed to continually talk about the case for change until they were tired of hearing their own voice. It is not a one-and-done message, but something that needs to be repeated incessantly or people will go back to the place they’re comfortable. As David Ricks, CEO and Chair of Eli Lilly & Company, observed in our research: “Many change initiatives don’t fail because of some dramatic revolt—they fade away due to boredom. It’s not that the idea is wrong; it’s just that over time, people lose interest.”

The headwaters of all successful transformation is an organization awakened to the need for change. That means you have to be sure that senior leadership is aligned and speaking with one voice around the case for change. Transformational leadership requires consistent messaging and action. Without a clear, cogent, and compelling message about why standing still is not an option and why change will create a better future, leaders can find themselves surrounded by people who value the comfort and safety of the familiar even when it’s anything but.

2. Psychological inertia: The comfort of status quo

Psychological inertia anchors people into the familiar. For employees and leaders to adopt new mindsets and behaviors, they must accept that the way they’ve always done things must change. This can create a cognitive dissonance for individuals, teams, and organizations, as the message they are receiving is that the practices and approaches that made them successful in the past must evolve. This can pose a threat to professional identities and raise uncomfortable questions about past decisions. Among organizations already undergoing transformation, 87% of leaders in our research cited psychological inertia as a main barrier to success.

Frans van Houten, former CEO of Royal Philips shared his firsthand experience of this in our research: “People will cling onto what they have or had. A lot of our people were survivors in the company—they had mastered the art of surviving previous leaders and restructurings. This creates a layer of passive resistance that must be tackled to succeed with transformation.”

When we think of resistance to change, we often think of it as open rebellion, but the truth is much more subtle. In launching transformation efforts, leaders will often be met with nodding heads and supportive words from the people around them. But even those employees that understand that things must change can struggle to fully embrace new ways of working—engaging cautiously rather than committing wholeheartedly to the transformation agenda.

To effectively address psychological inertia, leaders must understand where this kind of resistance comes from and how to navigate it without losing momentum. Sean Dineen, one of RRA’s leadership advisors specializing in transformation, offers his perspective on overcoming the cultural resistance that can derail change efforts.

3. Action inertia: The gap between intention and execution

Even when leaders recognize the need for change and emotionally commit to it, a third form of inertia can emerge. Action inertia was cited by 87% of leaders as a major challenge encountered during transformation efforts. This form or inertia manifests as an inability to take and sustain the actions required to intentionally change things.

The way things are done—routines, rituals, processes, operating and governance models—are often deeply embedded in an organization. The formal and informal ways of working were designed or adapted to fit the business of yesterday, not tomorrow. Over time, they are calcified by habit and entrenched by mythology—the way we do things has made us successful. But when the need for transformation requires different choices, new strategies and structures, these ways of working can quickly breakdown and become a serious drag on progress and creating the necessary momentum for change.

As marketplace disruption increases, business leaders are being forced to be more deliberative in their choices about where to play and how to win. This frequently requires a focus on building new, future-ready capabilities. Inevitably, this creates the need for different approaches to resource allocation, increasing productivity, and squeezing costs from some parts of the business while investing more in the high-growth opportunities. The faster pace of the market is forcing many organizations to shift time and energy from long-range planning to short-term navigation, requiring a change to their operating model and leadership architecture.

Thomas Dannenfeldt, former Chair of Ceconomy AG, captured the complexity of this in our research: “Placing the right people and enabling them to succeed is a challenge. It’s essential for everyone to recognize that it’s not a matter of choosing between speed and synergy but rather achieving both—while always keeping the central focus on putting customers first. Understanding people and how to enable them to work effectively is the most complex aspect of transformation.”

It’s critical for transformational leaders to recognize the knock-on effects that alterations in direction and strategy have on a complex system. Genuine transformation requires a comprehensive understanding of how a system operates and a methodical approach to identifying what must change downstream from strategy. It’s a process of decoding the organization and figuring out how to rewire it to ensure that any gap between intentions and results is closed, that any action inertia is addressed.

Transformational leadership

Just as it exists as part of the natural world, inertia is a feature of every human system, especially ones that have enjoyed success. As such, it needs to be anticipated, understood, and respected. By identifying the three types—insight, psychological, and action—as they manifest in your organization, you’ll have the opportunity to create effective approaches to addressing them.

Bob Marcus, an RRA leadership advisor with deep expertise in transformation, explains what it takes to lead organizations through resistance and build momentum for change. 

In our highly disruptive world, transformational leadership is increasingly becoming a prerequisite for business success. Lewin famously stated that to understand something you have to try to change it. Spend time by understanding the human and organizational dynamics that you are operating within including how inertia shows up in your team or business. Given the formidable and consistent challenges posed by organizational inertia, leaders ignore it at their peril.

To learn more about how to overcome inertia and drive meaningful change in your organization, download our Transformational Leadership report.

Authors

Bob Marcus is a senior member of Russell Reynolds Associates’ Leadership Advisory practice. He is based in New York.

Sean Dineen is a senior member of Russell Reynolds Associates’ Leadership Advisory practice. He is based in Boston.