Transformation without imagination is only reorganisation

Somewhere between the announcement and real change, something crucial fails to happen. The organisation appears to move, but it is only an illusion of progress.

First published in The Mandarin

Leaders have become masterful in initiating organisational ‘transformation’, ‘reform’, or ‘change’, but as the results often show, less successful with delivering on the promise. 

There is a common pattern in large-scale organisational reform that most insiders would recognise. A problem is identified: a structural solution is planned — often a new organisation, a consolidated function, or a revised accountability framework. The mechanics of change — strategies, plans, and roadmaps — are set into motion. Implementation begins. 

Then, somewhere between the announcement and real change, something crucial fails to happen. The structure shifts. The culture remains the same. The organisation appears to move, but it is only an illusion of progress.

The usual explanations for this failure are now familiar: lack of resources, poor change management, stakeholder resistance, organisational politics, or obstinate middle managers. While these reasons can sometimes be valid, they are also incomplete because they view transformation solely as an implementation issue. 

They overlook the crucial question: ‘Did those leading the change genuinely see, and convincingly communicate to others, the future they aimed to create?’

This is the problem of strategic imagination, and it is the most underestimated leadership capability gap in organisational transformation.

Imagination and narrative

When the Australian government announced the formation of the Defence Delivery Agency — a merger of major acquisition and sustainment groups, along with new ministerial accountability arrangements — it provided a clear reason for structural change. The issues it aimed to address were real: capability delivery had been too slow and too expensive. 

But a structural reform, however well-designed, does not, by itself, constitute an organisational reform or transformation. The structural question, ‘How should these functions be organised?’ can be answered through analysis and negotiation. 

The missing question, as is often the case in major organisational transformations, goes to the importance of imagination. 

The imaginative questions are: ‘What kind of institution does the Defence Delivery Agency need to become?’ and ‘What would the new organisation be capable of that the current version is not?’ These questions address different issues and require different types of leadership skills to answer and implement. 

An imaginative response to these questions highlights a commonly used word in today’s organisations: narrative. Not the hollow narratives often seen in corporate plans, but an authentic leadership narrative. 

A true narrative is a big story about the future. It explains why change is necessary, what might happen if change doesn’t occur, where people fit into that future, outlines acceptable behaviour, and clarifies sources of authority. The narrative provides a sense of purpose and connects the past and future — it challenges the old mindset, opening up space for new possibilities. Most importantly, as the philosopher Byung-Chul Han writes, ‘narratives create a community’. 

Without a clearly articulated narrative for reform, the leadership and workforce responsible for implementation lack the resilience needed to handle the inevitable frictions and disruptions of change. Inevitably, everyone naturally reverts to what they already know, and the deckchairs are quietly rearranged. 

This isn’t a failure of leadership or commitment. It’s an expected outcome when people are asked to travel to a destination that hasn’t been clearly explained. It overlooks the fact that everyone in an organisation makes ongoing, mostly unconscious judgments about whether the future being presented is worthwhile, whether the institution is genuinely evolving, or if the reform is just a superficial change of familiar structures. 

When leadership’s strategic imagination fails, the reason for people to shift their mindset and habits isn’t convincing. The workforce’s guiding narrative becomes ‘this too shall pass’, and transformation slides into minimalist compliance.

Strategy as imagination in action

Every organisation tells itself a story. Sometimes that story is broad and inspiring, full of potential. Other times, it is narrow and defensive, aiming only to maintain the status quo. Either way, strategy is not just about analysis and planning; it is about bringing imagination to life.

Organisational transformations are often described in terms of resources, processes, or structures. We discuss budgets, supply chains, capabilities, workforce planning, and governance systems. The way these narratives are presented influences the futures they aim for, the risks they identify, the opportunities they overlook, and the boundaries they set for themselves.

Strategic imagination is not the same as vision, and it is important to be clear about the difference. 

A vision, as often used in organisational settings, is a statement about desired outcomes — a picture of the destination. Strategic imagination is more demanding. It is, as former associate secretary of Defence Brendan Sargeant has described, the capacity to reconcile two conflicting forces: experience, based on the world as it currently stands, and imagination, which constructs a picture of what the world could become.

The process of developing a genuine strategy involves effectively balancing these forces by considering both the constraints of the current reality and the needs of a different future. 

What makes the tension genuinely difficult is that these two forces not only coexist but also actively oppose each other. Experience, shaped by processes, precedents, and institutional culture, repeatedly pulls us back towards maintaining the status quo. Conversely, imagination, unshackled from experience, often produces what is seen as fantasy rather than practical strategy. 

However, effective strategic imagination requires a disciplined effort to work within the space between these forces — exploring future possibilities that have not yet been articulated, making those visions credible enough for others to see their value, and maintaining that belief throughout the lengthy process of institutional change.

Sargeant concluded that the quality of any strategy depends on the strength of the imagination that questions the circumstances that made it necessary.

Most organisations have invested heavily in developing the capabilities needed for the first of these forces. They have created sophisticated frameworks for evidence synthesis, options analysis, risk assessment, and program evaluation. These are genuine achievements. However, they have not equally invested in the imaginative ability required to envision futures that current experience does not support — to ask not only what the evidence indicates but also what it has yet to reveal. As a result, their reform machinery is technically proficient but limited in imagination: very good at designing solutions within the existing framework, but much less effective at questioning that framework itself. 

Byung-Chul Han would argue that organisations are driven by a vision grounded in information rather than narrative. Information and narrative act as opposing forces. We risk losing ourselves in the sea of available information, which heightens our sense of uncertainty. In contrast, narrative provides a coherent sense of purpose, values, and meaning.

Driving out imagination

The lack of strategic imagination as a clear organisational capability partly stems from the way leadership development has been approached. 

Capability frameworks, competency models, and leadership programs often concentrate on the behaviours and skills required to manage the present effectively, such as stakeholder engagement, communication, decision-making under uncertainty, and driving accountability. These are essential; however, as organisational philosopher James March observed, this is the plumbing of leadership rather than the poetry.

For March, plumbing refers to the routines, systems, controls, and efficiencies that keep organisations operational — the fundamental routines of organisational life. Poetry, on the other hand, is the aspiration, meaning, and narrative: the motivating sense of why the work matters and what it could become. 

March’s point was that effective leadership needs a balance of both elements. Organisations that focus too heavily on the practical side at the expense of creativity, as he explained, end up functioning without thriving. While they can handle complex tasks well, they often struggle to see options beyond the immediate.

The evolving nature of strategic imagination in organisational change

What does it mean to take strategic imagination seriously as a leadership capability in organisational transformation? 

It does not mean loosening accountability or accepting poor execution. The relationship between imagination and discipline is not oppositional — it is dependent. 

Imagination comes before strategy, strategy comes before execution, and execution without the earlier acts of imagination is, at best, a repetitive and inefficient reproduction of the status quo.

Taking strategic imagination seriously means, first, recognising that transformational change unfolds in distinct phases, each of which demands different levels of leaders’ imaginative capacity. 

This first phase is rupture. This is the moment when a genuine alternative to the current situation becomes conceivable. It is imagination at its most challenging: it disrupts settled narratives, reframes constraints as options, and reveals the assumptions underlying what appears natural or unavoidable. 

In the APS context, this could involve questioning why certain policy orthodoxies have persisted beyond the evidence that sustained them; why program designs default to familiar delivery methods when communities have voiced alternative needs; and why accountability frameworks are based on bureaucratic preferences rather than citizen experiences.

Rupture demands leaders willing to ask the questions their institution has learned to avoid. A successful rupture creates real opportunities where none previously appeared.

The second phase is the negotiation. This is the point where the gap between what an organisation claims to value and what it rewards becomes apparent and significant. 

At this point, strategic imagination shifts its focus. It is no longer mainly about creating new futures but about reshaping what the organisation owes to its staff. It redefines the psychological and moral contract with the workforce. 

Here, imagination builds a new narrative that shows a clear picture of where it is heading, why the journey is worth the disruption, and what will be different afterwards. Without that story, people go through change out of obligation rather than genuine commitment. They act in the expected way but quietly disconnect from the destination. The organisation moves forward, but without the shared belief that makes the movement meaningful.

The third phase is integration, which involves embedding new meaning into everyday practice. This is the stage that organisations most often underestimate. The key task is to turn values into behaviours, hopes into routines, and insights into precedents. It shows how a genuinely different way of working can become normal without losing its significance. 

Transformations grounded solely in the energy of a specific leader or the urgency of a particular crisis are inherently fragile. Integration is the process that ensures transformation lasts.

Organisational transformation must be imagined three times: first against the past, then against authority, and finally against decay.

Most organisational reform efforts fall short of expectations because they mistake these phases. They chase consensus during rupture, when the aim is to explore new opportunities. They demand compliance at the negotiation stage, when the real challenge is to create meaning. They celebrate disruption, but what the moment genuinely requires is patient stewardship. 

Strategic imagination is not just a single act but a form of situational intelligence: understanding which type of imagination the present moment requires, and being able to deliver it.

Why does organisational transformation fail?

This framing suggests that the question ‘why does transformation fail?’ could be the wrong question. A more useful question is: at which phase did leadership imagination fall apart? 

In most cases, the answer is because leaders weren’t equipped or given permission to do the more difficult, unfamiliar, and exposing work of genuinely imagining a different organisational future. They were asked to carry out a transformation they hadn’t been allowed to imagine.

The implications for how organisations develop their senior leaders are significant. Building capability in strategic thinking through evidence-based design, scenario testing, and risk management isn’t enough. Strategic thinking, and the tools that support it, always operate within the current framework. 

Strategic imagination challenges the current framework by questioning not only the best choice within existing limits, but also which limits are truly fixed, which options should be reconsidered, and what a fundamentally different organisation must believe about itself to improve effectiveness.

Leaders are not lacking ambition. Governments and businesses have significant reform agendas, real challenges exist, and the workforce is capable. What they lack is the disciplined ability to imagine futures that current experience cannot yet support and to make those futures credible enough to inspire people to pursue them.

Strategic imagination is how institutions renew their capabilities and identity. Without it, transformation is just another word for reorganisation. 

In increasingly uncertain times, this distinction is important, especially for Australians whose wellbeing depends on what government and business organisations can become.