Organizations typically frame behavioral change as a response to the external environment. A trend presents an opportunity or threat. The wise and courageous leader inspires a "culture change" with the support of imaginative and intelligent advisors, and charts a new course. The loyal rank-and-file learn the new skills needed, and head in the new direction with enthusiasm.

This model is, of course, complete bullshit.

I learned how change actually happens over a decade ago from one of my favorite people, my old boss at Xerox, Steve Hoover (then the VP of the Webster research center where I worked, and now the CTO). In a conversation, in response to my question about why we hadn't yet responded to an obviously important (and by then years-old) trend, Steve observed, "Of course I know we have to make the leap to X. But make the leap with what?" As it worked out, I played a role in supplying him with a "what" for that X -- the beginnings of a new capability.

So the real answer to how organizational behavior actually changes is: "through executive sponsorship." Sponsorship of what, and how? Sponsorship of an emerging capability development option through a series of progressively higher-stakes fractional farm-bets. I'll explain what this means in a minute.

That's how a change actually happens: in response to the internal (or acquired through M&A) emergence of a new capability, which often begins years ahead of behavior or direction changes. If it results in a response to a trend, that's an effect more than a cause. We talked about how capabilities actually emerge last week. Now let's talk about when and how that leads to changed organizational behaviors, and in the best case, new directions. And what "executive sponsorship" actually means.

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1/ A truism in the management and leadership game is that change most change initiatives, on the order of 50-70%%, fail. John Kotter is the best known authority on this subject. His books are among the rare ones that frame the stark reality of change honestly.

2/ It is widely recognized that one of the necessary conditions for successful change is executive sponsorship. But people rarely explain what this "sponsorship" process entails, how it works, or just how central it actually is. "Executive sponsorship" is invoked like it is a fairy-dust success factor, like Cinderalla's fairy godmother showing up.

3/ To first order, if you're not a powerful executive, any effort to change an organization boils down to a two-part plan: 1) nurture the acquisition of a new capability 2) get a senior executive to use the capability to do things differently.

4/ As I argued last time, nurturing a new capability is not about "capability maturity models" that end in gleeful bureaucracy growth. It is about getting to the "unconscious competence" level of tacit, culturally embodied deep skill. This requires this mysterious "executive sponsorship."

5/ John Boyd's "be somebody, or do something" challenge frames it right. A new capability is a "do something" project. This means it typically languishes in the shadows and margins for years, away from the glare of the spotlight of visible career progression.

6/ Not only do the capability acquisition activities -- side projects, experimental prototypes -- not attract rewards and promotions, they in fact typically attract active contempt, derision, and hostility. You might live in the "first they laugh at you" doghouse for years.

7/ The researcher in the obscure lab being the lonely champion of an out-there idea for years. The mediocre-sales salesperson championing a novel go-to-market playbook for years. The overenthusiastic customer. These are the patient zeros of change. True "change agents."

8/ Organizational change is of two types. The first, and by far more common kind, is a change in behavior without change in direction. The second, and much rare kind, is a change in behavior that results in a changed direction.

9/ The first kind of behavior is typically an efficiency or productivity related change that increases margins but not revenues in a business (or lowers costs/overheads in a public agency or nonprofit). It may be pure austerity (less travel) or involve a skill (lean six sigma).

10/ The second kind, and the only kind that interests me frankly, is a behavior change that leads to a direction change. This kind of change can be plotted as a set of discrete moves on a 2x2 as shown.

11/ The x-axis is the locus of agency: in the ranks or in the executive suite. The y-axis is the perception of the related environmental forces: as threat or optionality (NOT opportunity).

12/ This is an important point. Opportunities are always all around us, but vanishingly few represent optionality as well. An option is an opportunity that you have a designed capability to act on. Companies often use this exact language. At Xerox, we talked about TIOs: "technology investment options."