Phil Dunk, CEO at River, explains how to ensure successful transformation.
The majority of transformation projects fail. Why? Because they are cumbersome, risky, and top down. Failure to mobilise people around goals and activities that transform is the greatest risk for today’s activist business leader. This definitive guide explains how to win at transformation by setting realistic metrics that will keep you on the road to success.
Why does transformation fail?
Many businesses today are embarking on a transformation of some kind. This is a direct result of political uncertainty, trade regulations and mounting costs (to name a few). If you're in Europe, you'll no doubt be familiar with Brexit and be only too aware of its impact on business. As well as external change drivers, businesses may also find that their traditional way of working is no longer relevant, which will lead them towards a business transformation path, if they wish to survive. Businesses in a state of trouble because of market disruption will also need to 'transform or die'.
But why do so many transformation projects fail in the first place? Where are businesses going wrong, and what can you do to make sure yours is a success?
Why does transformation fail?
Firstly, projects of this kind are often limited to managerial transformation. And then this breaks at every hierarchical level and doesn't reach the people that will really have to transform. These are often the people that have a relationship with the customer, resulting in strategic misalignment. Even more harmful is if the transformation is communicated to customers but not understood and therefore not delivered by front line teams.
The second problem is a lack of buy in. If there's no genuine stakeholder commitment to the transformation, then it won't work. Leadership can't simply pay lip service to it without believing in its merits.
Thirdly, what if no one actually changes? Everyone just carries on with the same way of working, to the same requirements.
Then, what if people do change the way they work, but no one's doing the same thing? Misalignment is another key problem that businesses going through a transformation project will face.
Lastly, although not exhaustively, there's the problem of bringing everyone with you on your business' transformation journey. Too often it feels like something that's done to people, without explanation of what the organisation is trying to achieve and how it will measure when it gets there.
Major transformation challenges
Too often, big consultancy firms are hired to assist with business transformation where they list the problems - presenting what needs to change - without real consideration for the implementation. If these consultants don't stick around for the execution, things can fail, and this is where the major challenges arise.
To avoid these risks, you need a really clear communication strategy and appreciation for how to measure the 'change curve'.
Let's start with communication.
When you're going through a business transformation, it's essential to have a clear and consistent 'change story'. Painting the vision of where you want to get to, and how it will feel when you arrive, is crucial for your people to understand what to expect.
In fact, a recent McKinsey report that studied successful business transformations, identified the need to have a consistent and transparent change story which is continually shared with everyone.
Focus on the importance of setting milestones and metrics, so that you know you are making progress and you can communicate this effectively. But you can also pivot and change course if the transformation is not progressing as desired.
Five elements of successful transformation
The McKinsey report also identifies these five key elements in businesses that went through a successful transformation.
- Everyone in the organisation understands how his or her work relates to the organisation's overall vision
- Everyone in the organisation is actively engaged in identifying errors and defects before they reach customers, clients or other consumers
- Best practices are systematically identified, shared and improved upon
- The organisation develops its people so they can surpass expectations for performance
- Everyone in the organisation is fully engaged in meeting his or her individual goals or targets
So, your change story will need to consider how you can ensure everyone is aligned with the overall vision and understand how they can personally contribute in a meaningful way.
With any transformation project, implementation is normally the hardest to get right, and most transformations fail at the execution phase. Everyone assumes everyone else is carrying on with the work required, no clear milestones are set, and no effective metrics are put in place which can be shared across teams.
The best transformations have clear goals, milestones and metrics for measuring progress, and have an effective process for including all the necessary stakeholders. Your communication strategy will need to consider how you will effectively include everyone.
Here's some simple steps to include in your transformation communications:
- Tell people what to expect. Help them to understand why you're transforming and the value it will bring
- Communicate how you will measure your journey towards that goal so progress can be celebrated
- Explain that your business can't expect to transform and improve at the same time (both can't accelerate at the same speed)
- Create a continual and consistent change story so everyone understands (this will need to be repeated and often)
- Be open and transparent in your messaging (hard things have to be said but it's far better to be honest than try to mask it with purely positive messages)
- Remember that typically 70% of your people will come with you on your journey - and that's ok (for more on this, read Jim Collins' Good to Great).
In addition to these steps, when you're talking, presenting or writing about the transformation, avoid jargon or 'executive speak'. Instead, use a language and style that's natural and effective for the people who are doing the work.
The change curve
The second risk to successful transformation is the failure to appreciate the change curve.
Transformations normally happen in two phases – ‘where do we want to get to?’ (vision) and, ‘how will we get there’ (execution). Often people forget to ask, 'how will we know when we've got there?'.
The change curve is a documented way of helping people understand their reactions to significant change or upheaval. With organisational change this is really important - without it, you can't assist when people are struggling to comprehend their role within the newly envisioned world.
There are several phases that individuals will go through before they accept the change. So, the transformation needs to be treated as a concentrated form of evolution. Your business should be always transforming and continually improving. And you'll need to be flexible along that process without harming the overall transformation.
There are two key things that will help you to see if your transformation is progressing in the right direction:
- Tracking how people feel through the transformation
- Measuring people's appreciation of what's happening.
If you survey how people are feeling through light touch tracking of the phases they are going through along the process, you'll be better placed to tweak and flex the approach to keep the ship on course.
Stairway to transformation heaven
In your transformation journey, think about what the future looks like in one, three, five years time. What are the big changes you need to make to really win and bring everyone with you? And what do you need to put in place for that vision to become a reality? We've developed eight steps that you can adopt (or at least consider) when embarking on your business transformation project.
1. Put measures in place
So that everyone can understand how they can individually contribute, you'll need to put measures and metrics in place. By having a radical focus on goals that are simple and easy to achieve, people can clearly see the progress. This gives everyone in the organisation stamina to keep doing the right things that will lead to a successful business transformation.
2. Evolution vs big bang
Rome wasn't built in a day. We all know this, but sometimes we can forget that a transformation is something that a business needs to grow into. Old ways of working take time to be replaced and people's mindsets can take a while to adapt and accept a different vision for the company. This is especially difficult if you have good people retention. Those that have been with you the longest may find the transition the hardest. So an overall appreciation by everyone that the business needs to grow into the transformation is vital and healthy.
3. Feeling your way
Surveying how people feel throughout the transformation process gives you crucial information. But it's only useful if that data is opened up for everyone to see, and teams are allowed to work up ideas for improvement.
Define a consistent story and plan how you are going to drip feed the information so there's a constant trickle of messaging rather than a torrent or drought. That means communicating when there's no news, as well as when there is. In your communications, keep a balanced tone - because euphoria is equally as dangerous as negativity.
5. It's not about the money
Set out your basic hygiene factors for the transformation. Remind people why this change is happening and that it's not all about money. Yes, successful businesses need to be profitable, but your people also need to hear the motivational stories about why you're in this business to start with.
6. Cross pollination
Creating teams throughout a transformation, which are truly cross pollinating - stretching across different functions and departments - mixes people with other skills that helps the teams rethink why they do something in a particular way. This means they can approach problems anew, with a 'beginner's mind', which breeds creativity and empathy. This can also lead to corporate liberation from the bottom, up. Collaborative teams sharing in a goal, with a mix of views and voices, can stop the echo chamber which might otherwise prevail.
Read more about cross pollinating teams in our white paper 'What's the point of innovation without participation? How to unlock a culture of 'Innovation Everywhere' without risking it all'.
7. Shared experiences
By simply sharing experiences we can build a greater connection to people. We don't realise the extent to which we are influenced by those around us. So plan to find out how teams across your organisation have gone through the change curve and communicate those stories with everyone. Incremental change is the most likely scenario and these stories can comfort others, rather than only surfacing the 'big bang' successes.
8. Self organisation
Throughout a transformation there will be things that need improving and problems that need solving. To keep everyone in the organisation actively engaged, you'll need to allow self organising teams to define how the new ways of working can work for them, specifically. Teams closest to the problem are best to solve it.
If you had to limit yourself to just one of these steps to implement, then the most critical one is a laser focus on the goals and metrics you are going to put in place to measure your organisation's progress towards business transformation. Failure to mobilise people around goals and activities that transform is the greatest oversight of today’s business leader that's looking for true transformation.
Setting realistic metrics that keep everyone on track is the greatest thing you can do to keep your business on the road to transformation success.
Want to see what River can do for you?
River is an innovative tool developed to put goals, data and improvement activities at the heart of your business, by connecting teams to achieve continuous improvement. If you would like to understand how River can help your business through successful transformation, speak to us today or request a demo.