The ability to understand a situation and apply knowledge to real world scenarios is called contextual intelligence and it requires the proficiency to adapt knowledge and skills to different environments, situations and scenarios (Kutz, 2017). Adapting to new situations and environments will expose a business organization to change and during the change process, a good leader will use contextual intelligence to manage the change process.
Managing change is a crucial part in leading an organization and change is the only constant in the world according to Buddha. Change management is a skill and a vital process which needs to be handled very carefully as everyone fears change and usually during a change management process, there will be a lot of internal resistance within the organization.
When managing change the leader will require to use his influence and power at the highest level in order to obtain the support of the followers. Business as usual is not a constant and in order for an organization to thrive it is important to open to change. Due to internal factors or external factors, an organization will adhere to change. New developments in technology, innovations, policy and regulatory reviews, recession and economic crisis, changes in consumer habits; business competitions, new market trends and mergers or acquisitions can be considered as common drivers of change. Every business organization will go through the change process at least once at some stage in the business life cycle.
Change management is a process which involves changes in organization structure, changes in organization processes, changes in budget allocations, changes in job roles and staffing, changes in physical location of the organization, changes in leadership and even changes in the main vision and mission of the organization. Hence, the change management affect the people, infrastructure as well as the values of the organization. Due to this reason, managing change will be a highly sensitive process and if managed incorrectly, the organization can even end up closing business.
There are many theories and models on change management. Kurt Lewin’s (Lewin, 1947) change management model, John Kotter’s (Kotter, 1996) eight steps process and theory of change (Brest, 2010) are few notable theories and models used in change management. Even though there are many theories on change management and leadership, every scenario and situation are unique to that organization and when applying theories, a true leader should consider many factors using contextual intelligence to understand how the theory should be applied to the particular scenario, particular organization, particular individual in the organization.
There are many case studies also done on adapting to change. For an example, a multi-national organization located in one country may use a case study or a theory practiced in one country when launching operations in a new country or a region. But factors such as political situation, cultural conditions, economic conditions and climate conditions may be unique in the new country where the new office or factory or outlet is setup. Then the leader should be able to use contextual intelligence to understand these political situation, cultural conditions, economic conditions and climate conditions and adapt a new version of the theory or case study without implementing what was done in another scenario. If KFC (Kentucky Fried Chicken food chain) franchise is launching a new outlet in a region where majority of consumers are vegetarians due to religious reasons, no matter what theory or case study is applied, the launch will not be successful unless the food preference and the religious conditions are properly understood.
It is vital for an organization to know when to introduce change and when not to introduce change.
Polaroid camera company can be considered a classic example for not adapting to change. Polaroid was a market leader to cameras which produced instant photographs and the company was founded in 1937 by Edwin H. Land and he ran the company until 1981 where its employment was 21,000 in 1978, and by 1991 the company’s revenue was $3 billion in 1991(Lewiston, 2008). Even though Polaroid was the market leader for instant photographs, due to the technological advancements in digital photography, digital cameras over took the camera and photography market. As Polaroid did not manage the change properly, the company filed for bankruptcy in 2001(Lewiston, 2008). Polaroid leadership did not use contextual intelligence to manage the change or even to consider change and therefore they did not know when to adapt the new technology and change their business model.
Kodak also went through the same process as Polaroid being in the same industry but the interesting factor which should be noticed here is that in 1975, Steve Sasson – the chief engineer of Kodak developed a prototype of a digital camera long before all other competitors even thought of this idea but Kodak management failed to recognize the opportunity and further develop this new technology as they were happy with their existing business model (Jasper, 2012). A good leader would know when to adapt new technology and when to change the business model using the contextual intelligence and Kodak failed applying contextual intelligence.
Sternberg’s third sub theory on intelligence is focussed contextual intelligence and the practical aspect of intelligence where mental activity involved in attaining in fitting and individual to a context is discussed. Contextual intelligence has three processes; adapting, shaping, selecting, which an individual use to adapt and fit to the environment (Sternberg, 1985). These three processes of the contextual intelligence can be summarized as below in a business organization scenario;
- Adaption – changes done internally within the organization to adjust to the environment or surrounding. This is the internal changes done within an organization to external factors such as new technology, new economic conditions…etc
- Shaping – changes done to the environment to suit the needs of the organization. An organization can change the environment, market or economy to best suited the organizations requirements in this scenario.
- Selecting – changing the environment or the organization or both to suite the objectives or goals of the organization. When the existing business model or organization structure can be changed along with the market or external environment to suite the vision of the organization.
A good leader with contextual intelligence would know when and where to adapt change and how to adapt change to his business organization and using the same contextual intelligence, he will know how to obtain support from his team. Sometimes theories in a book is not the same in real life and so many internal and external factors will have an impact on managing change. Therefore, a smart and practical leader will know how best to apply a theory and to which extend he should apply a theory using contextual intelligence. As the contextual leader know the vibes of his organization and his followers better than anyone else, he will be the authority over any theorist to decide what is theory or approach is best for his organization when managing theory. Leaders with such contextual intelligence are called “street smart” in colloquial terms.
References
Brest, P. (2010). The Power of Theories of Change. Stanford Social Innovation Review.
Jasper, R. (2012, January 20). The end of our Kodak moment. The Telegraph, London.
Kotter, J. P. (1996). Leading Change. Boston, Mass.:: Harvard Business School Press.
Kutz, M. (2017). What Is Contextual Intelligence?. In: Contextual Intelligence. Palgrave Macmillan.
Lewin, K. (1947). Frontiers in Group Dynamics. Human Relations, 5-41.
Lewiston, M. (2008). Polaroid quits instant film. Sun Journal.
Sternberg, R. J. (1985). Beyond IQ: A Triarchic Theory of Intelligence. Cambridge University Press.
Rangamini Werawatta 