Majority of transformation efforts fail. Over the past decade we have worked with multiple CEOs across diverse industries, determined to beat the odds. While they are all highly complex undertakings some common principles apply.
Here is a simplified guide to cover the essentials in a complex transformation journey.
1) Understand the current state of business: Where do we stand?
Understanding of current reality enables putting a stake in the ground. It is a well understood concept, yet there may be pitfalls in its execution due to tendencies to sugarcoat. To generate the creative tension to propel change there is a need to expose the good, bad and ugly, however uncomfortable it might be. It is critical to have a rigorous assessment involving key stakeholders and input from all levels across the organization. One pair of eyes is never sufficient as we all tend to be biased and limited in what we see based on our past experience.
2) Articulate the purpose & vision: What we are aiming for and why?
Transformation is the means to an end. Defining aspirations and articulating clearly what we are aiming for and making it a collective ambition is a must. While vision is a widely understood concept, it can remain elusive. Tapping into the power of vision requires:
1) Making the vision concrete and actionable;
2) Anchoring in the purpose and clearly articulating the why;
3) Sharing the vision and turning it into collective ambition of leadership.
3) Develop a transformation roadmap: How will we get there?
Once there is clarity around where we stand (current reality) and what we are aiming for (the vision) and we are convinced there is a need for action the focus must be on developing a roadmap on how to get there and what needs to be done in every aspect of the transformation: strategy, structure, systems and culture.
Strategy. Business transformation necessitates discovery of growth strategies guided by the vision and mission and reframing or reinventing the business. Key strategic questions that must be addressed are: “where to play” and “how to win.” [i]
Structure. Focus on structures serves dual purpose. Organization structures need to be adjusted such that they can enable effective strategy execution and serve as a driver for shaping the desired culture. This may take the form of changing reporting structures, roles & responsibilities, project or team based flexible lateral structures.[ii] The ultimate goal should be to have an organization structure that improves the speed and effectiveness of decision making.
Systems. IT and HR systems are the backbone of the organization and are major drivers of effectiveness of operations and play a critical role to support transformation. In cases where these systems are adequate, there is still a need to work on critical few processes which dictate the daily behaviors in an organization. Standardization of processes drives efficiencies across the organization enabling strategy execution.
Culture. There is no good or bad culture in absolute terms, it is always in relation to vision and strategy. Success of transformation relies heavily on shaping the right culture.
4) Focus on Culture & Values: What guides our behavior?
Culture is toughest to nail down without due cynicism, and values are considered by many a useless exercise that ends up as posters on walls. Yet, culture and values are what define the “character” of the organization. Defining the desired culture and making deliberate choices on how we want it to evolve and what to preserve and what to change is therefore essential. There is a need to engage in a collective process to define and create alignment around the behaviors and actions that are needed to live these values on a daily basis.
5) Create a Change Leadership Forum: Who leads the change?
Creating a forum of change leaders enables putting all the above into action. It is a forum where all line leaders can find a way to own the transformation, can articulate the why/what/how of change and commit to leading change. They in turn can engage and embolden their people to embrace change, as well as, take part in cross functional transformation initiatives. Well planned offsites tap into the power of large groups, where believers can get on stage, making the case for change and encourage others. Periodical events can be used to launch the change and mark progress along the way. The forum spreads the enthusiasm and builds the confidence that collective efforts on transformation are paying off and moving the organization towards the vision and at the same time helps build up the leadership capacity in the organization.
6) Drive accountability for change: How do we ensure success?
Regardless how strong and widespread, commitment and attention to change can fade way or take the back seat when daily business pressures arise unless change initiatives are embedded into corporate and unit objectives and institutionalized. Line leaders must therefore be held accountable not only for driving business results but also the transformation efforts that will bring long term growth and success.
7) Mark progress and celebrate success: How do we sustain the momentum?
There is a need to share results regularly, demonstrating the road travelled and progress achieved.Continuous reminders of where we started, and what has been already achieved becomes hugely important to keep going and taking on the next battle. We must celebrate the wins on a frequent basis and recognize those who have made it possible before heading for the next milestone on the road to success or initiate a new cycle of change. There needs to be ongoing communication and pulse checks to ensure engagement and rituals such as awards and campaigns in place to keep values alive.
[i] Richard P. Rummelt, Good Strategy, Bad Strategy (New York: Crown Business, 2011) [ii] Jay Galbraith, Competing with flexible lateral organizations (Reading: Addison-Wesley, 1994)