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The reign of transformation and potentialisation in organisations

In today's business landscape, understanding the dynamics of transformation and potentialisation is crucial for success. CBS professor Niels Åkerstrøm Andersen, offers some perspective on the concept of transformation while warning about the cost of a logic of transformation and potentialisation for organisations & employees.

By CBS Leadership Centre

At the Leadership Think Tank, an initiative by CBS Leadership Centre, the newest research is combined with the experiences of leadership practitioners, to create a visionary, robust, and nuanced picture of the future of leadership.

The Leadership Think Tank members are a diverse group of accomplished leadership practitioners and distinguished researchers from CBS. Together, they represent inspiring leadership experiences and mindsets that will facilitate the quest to develop new thinking about leadership.

Among CBS researchers, Professor Niels Åkerstrøm Andersen describes the pressure that organisations are under for constant transformation, which leads to complexity, disorder and the need to deliver on ever-increasing expectations.

Transformation, one of the buzzwords of our time, is certainly associated with a lot of ambiguity. Transformation promises the business world new market opportunities while posing challenges for companies that must face transformation with self-transformation.

Similarly the public sector is expected to transform itself to remain in sync with a society in transformation, e.g. regarding the green and digital transformation. Transformation seems not only to indicate a metamorphosis but a state of continuous transition, where the form is constantly becoming something new. The concept of transformation articulates a paradoxical expectation of a state in which the only constancy is constant transformation.

We have not always celebrated transformation. Over time organisations have dealt with change from exceedingly different leadership perspectives. Before World War II organisations were seen as formal entities with simple decision making based on past experience, bringing the past into the present as a decision premise.

After the war leadership was professionalised and organisations saw themselves as systems in an environment, now focusing on adaptation, with decisions based on future predictions, bringing the future into the present as a decision premise. The thinking was that market development could be forecasted in order for you to adapt to the future environment.

In the 1980s organisations left predictability behind and believed that change was the only constant. Instead of planning the future, a strategic capability was required to see the future as a horizon of possibilities and challenges.

Constant adaptability to an everchanging environment is in focus. Today, buzzwords like transformation, radical innovation, re-invention and disruption have radicalised this way of dealing with change. Knowing that the past and present form their images of the future, organisations no longer trust a future that is too risky to follow and instead now hunt new possibilities beyond the horizon. They look for the future of future, where potentialisation substitutes strategising, which requires questioning everything that is done. That is the core of transformative leadership.

"Organisations no longer trust a future that is too risky to follow and instead now hunt new possibilities beyond the horizon."

Niels Åkerstrøm Andersen, Professor at the CBS Department of Business Humanities and Law

The logic of transformation and potentialisation does not come without cost to the organisation, which is a very low certainty of what to expect – and a lack of effort to build on what exists. Transformation and potentialisation view what was and what is as something wrong and binding. Employee resistance against radical disruptive ideas invented by top management is seen as a sign of conservatism.

What happens to organisations and management when the ideal is constant transformation? Top managers risk isolating themselves from their organisation and neglecting voices other than their own. They risk the organisation to save it, preparing it for an unknown future. The challenge is to find the place in which transformation can be controlled now that nothing seems to escape its logic …

This OpEd is an extract from the Leadership for the Future Report, where the CBS Leadership Centre shares insights from the Think Tank including:

What circumstances are driving the leadership transformation?
How do changes in the leadership context influence the leadership conditions?
Which leadership skills will be especially useful?
How can leaders best put these skills into play in an organisational setting?

Read more here.

You’ve just gained new insight thanks to CBS Leadership Centre.

CBS Leadership centre is connecting researchers and leaders around a shared ambition: to enable professionals to successfully assume their leadership and create value and resilience in businesses and organisations –and bring on necessary transformation fueled by significant societal agendas such as green transition, diversity, digitalisation, innovation and ethics.

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The reign of transformation and potentialisation in organisations

"Organisations no longer trust a future that is too risky to follow and instead now hunt new possibilities beyond the horizon."

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