Change only happens when “creative tension” is created. Creative tension comes from seeing clearly where we want to be, our “vision,” and telling the truth about where we are now, our “current reality.” — Peter Senge

Now that we’ve identified the key drivers and challenges, the next step is to define a set of principles to guide (but not dictate) the transformation of your business strategy and operating model. As your organization is one-of-a-kind, guiding, rather than dictating, is essential. Your path to transformation is unique, but these principles are not. Transformation is problem solving through creating organizational friction, which means a loss of capability and comfort. Your goal is to do this in a way that’s best for your people and circumstances.

Before we dive into the principles, imagine for a moment that you had the power to transform your entire organization overnight. Can you envision the future state, and what it might look like? If so, how would your organization be fundamentally different from how it is today?

Now suppose you couldn’t change everything all at once, and you had to choose where to focus your energy and resources. How would you approach it? What would you change first, and why? And how might you manage the inevitable trade offs?

These decisions are never easy, because oftentimes, they require striking a balance between two seemingly unsolvable problems, the kind that can’t necessarily be solved with more money, time or resources. These problems are known as polarities, and due to their unsolvable nature, they are often the source of debates that seem to go on and on for years without resolution.

For instance, your organization has no doubt debated at length whether leadership should be centralized or decentralized, or whether it is better to encourage a bias for planning or a bias for action. Or perhaps it’s deciding whether it’s better to focus on customers or shareholders. These are difficult questions to answer because you can’t win by choosing one side over the other. As a leader, the choices you make are never either/or, they are always both/and.

That’s why, in our experience, it’s better to leave zero sum arguments at the door and use the six principles shown below in Figure C to design “win-win” scenarios that maximize the relative upside, and minimize the relative downside.

We call these principles The Better Way, and here in Part II, we’ll demonstrate how to use them as a guiding policy when making difficult choices that are contrary to the status quo.

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