Can Executive Orders Drive Change? Or Do We Think About Change Differently?
Feb 1, 2025
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Change and transformation are pivotal themes for 2025, with over half of CEOs doubting their company's future. The discussion highlights the surge of executive orders in the U.S. government and questions their effectiveness in fostering genuine change. It emphasizes that enduring cultural shifts take time and employee inclusion. The rise of AI is also explored, noting its potential as an ally in productivity rather than a job threat. Furthermore, the importance of leadership and grassroots initiatives in cultivating fair and resilient organizations is underscored.
A significant number of CEOs fear for their companies' futures, emphasizing the urgent need for effective leadership in navigating transformational change.
Sustainable change thrives on employee engagement and inclusivity rather than top-down mandates that rely on fear and compliance.
Deep dives
Corporate Transformations in a Changing Economy
Many companies are currently undergoing profound transformations due to a rapidly changing economic landscape, influenced by advances in AI and shifting consumer behaviors. A significant number of CEOs express concern regarding their companies' long-term viability, with 53% believing their organizations may not survive the next decade. Major corporations like Starbucks, Nike, and Boeing are experiencing turnaround efforts, highlighting the challenges even well-established businesses face in adapting to new realities. This urgency underscores the importance of effective leadership and strategic change management in navigating these turbulent times.
Impact of Federal DEI Policies on Corporate Culture
Recent federal policies regarding Diversity, Equity, and Inclusion (DEI) initiatives have prompted significant reactions from both federal employees and corporations. Federal employees have been instructed that those in DEI-related roles may face termination, marking a stark shift in government priorities. This top-down approach raises questions about the effectiveness of leadership that employs fear and compliance rather than inspiring genuine commitment to change. Many companies are publicly capitulating to these policies, sending a message to their employees and customers that could undermine their own ethical principles and commitment to a diverse workplace.
Bottom-Up Culture: The Key to Sustainable Change
Sustainable change within organizations tends to emerge from the ground-up rather than being dictated from the top. Employees who perceive their work as meaningful and feel valued are more likely to engage with and contribute to an organization's mission. The leaders' role should focus on empowering individuals rather than merely enforcing compliance through threats or layoffs. Organizations that prioritize inclusivity and employee support are not only more resilient but also better positioned for long-term success and profitability.
Change and transformation is the theme for 2025. 53% of CEOs believe their company will not exist in ten years, with iconic brands like Starbucks, Boeing, Nike, Intel, Southwest, and Target going through turnarounds. And 93% of CEOs believe AI will totally transform their operating model. (PwC CEO Survey.)
At the same time we’re witnessing a massive “change management” push in the US Federal Government, driven by 200+ executive orders and other communications. The big issue i discuss is “will this form of change even work?” Do “Executive Orders” help people understand and embrace mandates for change?
While political change is not the right model for business, I want to point out how risky this approach may be. Putting aside political issues themselves, I think we’re about to learn a big lesson on “how to create enduring change.” Yes, sometimes things have to happen fast, but in most cases culture is built over years and individuals must be included in the process.
And that goes for AI transformation too, as I discuss in the podcast.