The Role of Theory U and the Dramatic Arc in Business Transformation

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For decades, business leaders have sought to break unproductive habits within organizations that hinder productivity and innovation. This gave rise to the field of business transformation, which itself has seen countless transformations.

While a number of methodologies and strategies exist to provide a framework for business transformation, there are two that our own company has found to deliver the most significant and lasting impact for organizations. of all industries, geographies and sizes. These are the business transformation frameworks known as U Theory and Dramatic Arch.

When properly leveraged, these two frameworks can help business leaders in their quest to engage people, build trust, and drive growth. Although these tactics are quite different from each other, they can also complement each other harmoniously.

You may wonder why two approaches that seem so different at first glance can work together to achieve a goal. It is important to remember the complex and multi-faceted nature of a successful business transformation. Sustainable transformation requires quantitative and qualitative changes. This requires changing mindsets, behaviors and workflow models to adapt to a more complex environment. At the same time, it also requires a deep commitment within the organization to foster a culture that embraces change. This is why engaging storytelling and lasting behavior change are closely linked.

What is Theory U?

The concept of Theory U was pioneered by MIT Professor Otto Scharmer in his seminal book “Theory U”. To create the book, he interviewed about 150 innovators in business and science. He used the insights gained from these interviews to lay out the basic principles of management and learning.

Scharmer elaborated these principles into a comprehensive Theory U that consists of seven key steps, which are labeled as follows:

  1. Download
  2. Seeing
  3. Detection
  4. Presence
  5. Crystallize
  6. Prototyping
  7. efficient

In addition to the seven steps described above, Theory U also includes three layers. The first layer is known as “Open Mind” and should coincide with steps 1 and 7. The second layer is called “Open Heart” and corresponds to steps 2 and 6. Scharmer refers to the last layer as “Open Will”, which includes steps 3, 4 and 5.

Scharmer explains that the bottom of the “U” is where the magic happens. He calls this stage presence. When presenting, it encourages the recipient of new information to drop their ego so that they can receive the knowledge presented.

Each of the above steps can be integrated seamlessly into business strategies to spur new growth and nurture innovative ideas. It is important to note that business transformation is not just about creating new processes or rebuilding a business model, but about engaging employees through a strategic process of long-term growth.

What is the dramatic arc?

While Theory U is beneficial for developing a framework for change, the Drama Arc focuses on storytelling. This can provide a strategy for communicating your transformation in a compelling way that builds trust in the process and the vision.

Dramatic Arc has five distinct phases that must be understood to effectively harness its impact. These are essentially the main components of a story that communicates your vision for business transformation. These stages are often referred to as Freytag’s pyramid and consist of the following elements:

Exposure

Exposure is commonly known as the “hook” or “attention grabber”. When exposing a story, animators need to make sure they get the full attention of the audience.

The rising stock

While exposition is responsible for grabbing the viewer’s attention, the rising action component is responsible for keeping it.

During this phase, the voltage should rise towards a peak or climax. In movies and on television, it involves some sort of conflict between the villain and the protagonist. However, in the world of marketing, this is usually where advertisers tackle the consumer problem.

Climax

Depending on the theme of the work, the climax is the moment in the story when the hero gains the upper hand or the villain kills the protagonist.

Action that failed

During the falling action, the tension begins to fade.

Outcome

In movies, novels, and similar forms of entertainment, the denouement is the phase of the story in which everything returns to normal. The hero leaves at sunset and all outstanding issues are resolved.

How to implement this in your business transformation plan

Theory U and the dramatic arc are valuable strategic tools. If you are interested in implementing these transformative theories into your business model, you should:

Create a shared intention

The contribution of employees is an essential component of any transformation. With this in mind, it is important that you also “upload” your staff information. Host an open forum and give team members in various roles a chance to speak up.

During the presence phase of Theory U, this approach will allow you to “let go” of old ideas while also giving you the opportunity to receive new thought processes. Your staff members will also have the opportunity to apply Theory U to better understand your perspective.

Change your point of view

For Theory U to really work, it’s not enough to motivate change within a team. Equally important is leadership providing the tools, training, and vision needed to build employee confidence behind the transformation itself. As a thought leader in your organization, be prepared to see things from your staff’s perspective and encourage them to broaden their perspective. In doing so, you may find that you have overlooked some issues that are hurting your company culture.

Focus on the future

During this implementation phase, you need to start “presence”. It means giving your team the support they need while articulating your future goals for the organization.

Be sure to discuss how the different teams will fit into this future, as it’s important to help employees feel involved in the transformation process, which greatly increases engagement and organic growth around of business change.

Prototype the shift

After talking with your team and identifying undesirable habits or aspects of the work culture, it’s time to prototype a solution. It is best to test the new approach on a small scale. If successful, you will then be ready to move on to the final stage of the implementation process.

Carry out

Scharmer called the last component of Theory U “co-evolution”. Once the prototype phase has established the proof of concept, your approach or idea is ready for large-scale deployment.

If you are using Theory U for your personal growth, it means fully adopting your new habit. In a broad sense, this could mean acquiring the resources needed to launch a multi-party business.

Last takeaways

The Drama Arc gives you a proven template for creating engaging stories so you can ensure your message is understood, absorbed, practiced, and embraced.

Theory U aims to build engagement, build trust, and teach individuals to adopt new patterns.

Together, these methodologies can help you bring about real change within your organization while encouraging your staff to learn something new.

Both methodologies are based on a learning-by-doing approach. Because of this, you can incorporate the Drama Arc into every stage of Theory U, reinforcing the change you are trying to create.

When used together, these strategies can create meaningful change that will transform your business.


Written by Mauricio Vianna.

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