A change management lesson with Uber and AirBnb

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rulesMany project and change leaders face the same situation when they have to roll out a social business or enterprise social network initiative. There are high expectations from employees, people like the initiative, it meets a need, the top management finds the idea brilliant, but nevertheless comes a moment when things get stuck. Despite of the early-days craze old habits strike back. Despite of a well tailored adoption program, users turn their back on the social initiative they were themselves asking for.

To understand what’s happening, just have a look at the consumer web and more specially at two brilliant and promising services : Uber et Airbnb. They both delight users, everyone praises their model ) – except the leaders of the industries they’re removing the dust from – they embody the future of economy and despite of that… There’s no suprise that those they want to put off their pedestal are angry and want them out of the market. What’s interesting is what they do to survive to these game changers and why they sometimes manage to slow their growth down.

Months ago, a judge determined AirBnb was illegal in New York. No matter one likes the arguments and the manner or find the decision ridiculous, what matters is that from a very factual standpoint the service was unlawful. The law way date from times when such services where unthinkable, may be irrelevant to our economy but the point is the law was in force so judges had to enforce it regardless of anything else. And that’s the same means taxis are using to prevent Uber from gaining new market shares.

So it does not matter the economic model is promising, that these companies bring real solutions to actual needs, that users are delighted and that anyone on earth sees they are inventing tomorrow’s business models. The judge spoke and Airbnb will be illegal in New York until the law changed. It makes everyone sad – except the ones they are challenging – but as long as the law does not change we’ll have to find something else, go back to old habits. So bad. But the show must go on and people won’t sleep in the streets waiting for a new bill to be passed.

That’s exactly what happens within organizations.

Businesses have their rules. Some formal and written. Others implicit but at least as important as the latter. Others are related to culture. They form a system that makes that at given point, one will adopt given behavior, will make such decision and not another, will work in one way and not another. Most of change programs that come with Social Business initiatives, with the bringing-in of social technologies in the workplace and the new ways of working they imply used to rely on users adoption, that’s to say convincing them that the approach was good so they had to change their behaviors and carry the weight of change alone while nothing was done to change the system, the rules. By doing so they put themselves at risk towards those – and they’re many – that don’t see the benefits of change or prefer staying in the comfort zone that’s status quo.

There are lots of talks on middle management as a barrier to change. But isn’t it logical that when rules and goals do not change, managers in charge of meeting them does not accept that employees go the opposite way, against the rule, even if they’re following exhortations from the leadership team ?

I made the comparison between an organization and a country where people would be ask to change behaviors while keeping the the laws that forbid these behaviors in force. That’s exactly the situation we’re facing.

What Uber, Airnbn and many others teach us is that the most obvious, logical and wanted approach will always struggle against opposite rules. That does not means the approach is wrong, only that rules need to be changed. If nothing is done in that way, those who don’t want things to change will even come up with new rules to protect themselves even more…as it’s happening with taxis in many countries…

A situation any change leader should think about twice.

 

  • Jason Clampet

    Just want to point out that Airbnb was never, ever declared illegal in NYC. One judge ruled that one instance violated the state’s short-term rental laws. Airbnb rose to the host’s defense because they knew they could win on appeal, because even the law’s author disagreed with the judge. That said, many instances of rentals via Airbnb in NYC (and other markets) are illegal — more than half by a detailed study. That doesn’t make Airbnb illegal, it just means many hosts are breaking a law.

    It’s a distinction that seems small, but it isn’t. Part of understanding ‘change’ is understanding the details.

  • This blog kind of enrages me, but I’ll try to get over it. Let me explain the reason though: The blog assumes that the rules AirBnB and Uber are struggling against are just stupid relics of a bygone era that have no place in our modern world.

    But in reality, many of these rules (while imperfect) are in place for very good reasons that are still valid. NYC and other municipalities have seen documented cases (and many undocumented reports) of abusive landlords evicting tenants and essentially turning zoned residential spaces into unlicensed hotels. This practice and the less obviously bad practice of reducing quality of life in building through partial conversion to hotel space have real effects on real people. Uber, meanwhile, flouts the nondiscrimination rules that licensed taxi companies must abide by. Again, real people lose access to a necessary service so that the iPad set can get their fancy rides.

    I’m not saying that Uber and AirBnB are bad. I think they are good and we should work hard to make a place for them in the regulatory landscape around these services while maintaining quality of life of people affected by them as much as possible.

    But wouldn’t you say that a responsible change manager should work to understand the rules he or she is working against rather than assuming that the rules are bad simply because they obstruct that person’s conception of progress? That would be responsible change management.

    • My point was not to say that the rules were “stupid relics of a bygone era that have no place in our modern world.” but that these rule exist and they prevent disruptive business innovation.

      Let me be more specific.

      “Old” businesses raised in a world with constraints, these constraints being the lack of communication tool that could help people to self organize and share assets. Logically, all the legal and regulation stuff was built according to this context. When the constraint disappeared the regulation became the constraint and it currently prevents new biz models to complete (not replace) the existing ones.

      My point was to highlight the similarties with what happen inside companies with disruptive change facing rules that have been built for a constrained context that does not exist anymore. It’s not about criticising the old model but creating the right context for a complementary one to emerge.
      We need rules to accomodate to constraints. When the constraint disappear the rules in question become the new constraint and prevent improvement. Previous models were relevant and legitimate, most of times they don’t need replacement but completion. But keeping old rules in a new context prevent completion or disruptive change to happen, no matter how legitimate they’ve been in the past.

      Rules are not bad because they’re old or because they prevent change from happening (as a matter of fact change is not always good, most of all when it happens for its own sake). They’re just made irrelevant by a changing context.

      A manager should understand why a rule exist. If the reason why it exists has disappeared then the rule is irrelevant, if not it’s a a protection against the fallacy of change for its own sake.

      • I take your point, and I agree with the overall point of the blog. But your example perpetuates a damaging myth that is very common in tech circles: that the rules and regulations hindering AirBnB and Uber are outmoded and no longer have a justification.

        I see this when you say, “facing rules that have been built for a constrained context that does not exist anymore”, or “everyone praises their model – except the leaders of the industries they’re removing the dust from”, or “it makes everyone sad – except the ones they are challenging”.

        None of these statements are true (though there is a grain of truth in the first). They all reflect the view that these regulations no longer protect anyone but the industries that they regulate, which is simply false in both the AirBnB and the Uber case. These regulations still protect lots of people, and these people would be (and in the case of AirBnB are being) hurt.

        Do the regulations need to be updated to better fit the present situation but still serve their legitimate purpose? Of course. Should they be completely rescinded because they no longer have a legitimate purpose? No.

        In any case, again, I agree with your overall point, but the choice of example was poor and assumes things about public policy that are not the case.