Why Most Agencies Struggle with Change

Policy tsunamis. That's how many federal executives describe the waves of change that crash through their agencies during administrative transitions. While some policy shifts reveal themselves through early warning signs - mounting OIG findings, congressional scrutiny, or misalignment between capabilities and stakeholder expectations - others can arrive with startling suddenness, like executive directives that fundamentally reshape priorities overnight.

By the time a new regulation arrived with markedly different enforcement priorities, the agency lacked both the capabilities and operational flexibility to pivot effectively.

This dual nature of policy change demands that agencies develop two distinct but complementary capabilities:

1)    The acumen to read and react to warning signs

2)    The organizational agility to respond effectively to sudden changes.

Yet, agencies struggle on both fronts, missing clear signals of impending change and lacking the operational flexibility to handle unexpected shifts.

Consider a federal regulatory agency we recently observed. For years, they treated changing regulations and criticism of their enforcement approach as temporary pushback rather than an indicator of fundamental misalignment with slowly evolving oversight expectations. By the time a new regulation arrived with markedly different enforcement priorities, the agency lacked both the capabilities and operational flexibility to pivot effectively.

This pattern of agencies struggling with both predictable and sudden changes repeats across government because agencies typically fall into one of three distinct response modes:

• First are those facing true transformation scenarios - fundamental shifts in mission requirements that demand entirely new capabilities. Think of agencies suddenly tasked with regulating emerging technologies or addressing novel environmental threats.

• Second are those in turnaround situations, where critical performance gaps in policy execution have created an immediate crisis. Here, the challenge isn't just adapting to new requirements but rebuilding core capabilities while simultaneously meeting them. These agencies must both fix existing issues and develop the resilience to handle future shifts, whether telegraphed or sudden.

• Finally, there are agencies in integration mode - those with solid foundations but trapped value and efficiency gaps that prevent them from fully meeting evolving policy demands. Their struggle isn't capability but optimization and the creation of strategic buffer capacity that enables rapid response to unexpected changes.

Understanding which pattern you face is crucial because each demands a different response. Regardless of your situation, successful adaptation requires early recognition and systematic response capabilities.

This means moving beyond surface-level policy analysis to truly understand how changes impact your functional requirements – i.e., the work your agency and its programs must execute to deliver on its mission. It requires mapping exactly how new directives affect your operations, workforce capabilities, and business processes, as well as clear decision frameworks that enable rapid pivots when necessary. Most importantly, it demands an honest assessment of your current state and capacity for change.

The cost of misreading these signals extends well beyond the immediate fallout. Agencies that fail to adapt risk more than poor performance reviews—they risk losing funding, authority, and, ultimately, their ability to serve their mission effectively.

Agencies that learn to recognize and respond to change early don't just survive transitions - they thrive through them. By building up your ability to systematically assess policy impacts and adapt capabilities accordingly, organizations turn what could be disruptive events into opportunities for meaningful improvement.

As your agency navigates today's policy shifts, are you building operational agility or just checking compliance boxes? Those who build true operational agility turn disruption into catalysts; those who don't risk being swept away by the next wave of change.

Look for the next piece in this series where we'll explore a powerful framework for understanding organizational change—the "edge of chaos"—and how agencies can harness this delicate balance between rigid order and complete disorder to build more adaptive, resilient operations. In today's environment, success requires more than just responding to change—it requires building organizations designed to thrive through both predictable shifts and sudden transformations.

Contact us to learn more.