5 Reasons Why Business Transformation Fails
Bilal Ahmad
Strategist l Business Excellence Senior Manager l Management Consultant for Business Transformation
Business transformation is becoming a must every passing day. The pandemic has made it a new normal. It's no more a nice-to-have. To adjust with business conditions that are changing at a speed we never saw before, the choice is becoming simpler. Tranform or fail.
Most businesses will need to transform. Many have already started this journey.
We have seen that most business transformations fail, while some produce minor results.
Why do business transformations fail?
There are many reasons behind it. I want to share five (5) reasons that I observed in my career as the major ones. These are (in no particular order):
While executing a transformation, we start measuring too many KPIs. Some of these KPIs are contradicting. Some are not made visible. And some are not measured regularly.
Because of these reasons, people start to get overwhelm. They lose the true spirit of measurement and slowly, the momentum fades away.
What you need to do instead is the opposite. Decide a few most important KPIs. Align them and settle down contradictions. Make them visible and do them regularly. With some progress over good time period, you can add on and adjust later.
2. Not Appointing Dedicated Change Agents:
Another mistake we see is not appointing dedicated professionals for handling transformation across business units and business processes.
Same people who handle operations, handle transformation. Operations engage them in urgent demands and fire fighting throught the day and that needs their immediate attention. When these people solve these regular operational issue, they are not left with enough energy, attention and capacity to address transformation execution needs.
And this cycle goes on. Transformation does not become their priority and doesn't get addressed.
3. Not Securing Early Wins:
Many times, we see, transformation leaders start working on too many goals. Some of these goals require budget approvals, some require lot of discussions and approvals, and some need I don't know what.
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Every business has constraints. When we start working on too many goals, we are stuck with our constraints.
We need to start with low hanging fruits, the initiatives that require least resources, time, approvals and resolutions. We need to start with whatever we have. Get some early wins. Build momentum for transformation. And then gradually, move for initiatives which are a bit more demanding.
4. Complacency:
People hate change, and we know this. Most people are complacent. Victim of status quo, loving their comfort zones.
Untill and unless you don't create a sense of urgency, transformation efforts don't start to build momentum. The pandemic has helped a lot to build this sense of urgency in these times. But even now, there can be some reasons that evoke complacency in people. One such example is that people don't believe in transformation if such efforts had failed in the past.
Caution: The sense of urgency must be real. It shall not be fake. If leaders just talk about transformation with sense of urgency, and they don't mean it in real, people will sense it immediately. A fake sense of urgency is worse than no sense of urgency as it damages a business more.
5. Not Getting People Buy-in:
When we don't involve executers in planning for transformation, we are unable to have their buy-in while implementing our transformation plans. Thus, not having people buy-in becomes a main reason why transformation efforts fail.
Another thing that weakens buy-in of people is we don't adjust our reward and compensation system to support execution of transformation plans.
One major mistake is trying to handle different types of stakeholders the same way. Instead, we need to identify supporters, resistors and neutrals and handle each group with a different appropriate strategy. Our goal shall be to turn resistors into neutrals (or reduce their resistance), neutrals into supporters, and sustain support of supporters.
Concluding Remarks:
Business transformation is the new norm. It's no more a choice. It's a must for business survival and growth, under current fast paced business situations and market & industry dynamics.
There can be many reasons why a business transformation may fail. I have shared 5 important ones: 1. KPI overload & measurement Issues; 2. Not appointing dedicated change agents; 3. Not securing early wins; 4. Complacency; & 5. Not getting people buy-in.
Thank you very much for reading this newsletter. I hope you had find it valuable. Let me know what else would you like me to publish next time.
P.S. What reasons you had observed in your experience so far that caused business transformation to fail? Please comment or message me.
Leadership Consultant, Rich and diversified experience in both Government and Corporate sectors.
2 年Bilal Ahmad Very logical and well thought out observations??. I shall just add” environmental culture”, there should be some visible acts in lighter note where by people as a whole receive indirectly a message that transformation is being taken place and they mentally get ready to welcome it.
Strategic HR| Transforming Organisation thru People| HR Analytics
2 年In any transformation leader and the team need to feel the need for a major change - the sense of urgency has to be felt across. There has to be a vision in which direction we move so that the efforts don't go in vain. Communication is key , consistently and regularly as possible - to inspire and motivate, removed fears, deal with change resistors, revise efforts if need etc. People and processes play an imp part in the success of the transformation which means obstacles are to be removed and people blockers/ resistors have to be addressed. Early wins I agree is a great way to build the montemum, compound the change efforts, keeps the team focused on the transformation journey Bilal Ahmad
Global Mid-Career Mentor??Founder of RISERS Club??Empowering Aspiring Mid-Level Professionals Fast-Track to Top-Paying Leadership & Executives Roles with 10x Influence??Book My Session??
2 年This is my favorite subject too and I believe each one can create a different impact in ecosystem but getting a buy in and right people on board go a long way Bilal Ahmad
GM/Strategic Change Consulting Practice Lead at The Advantage Group, Inc.
2 年Bilal Ahmad Excellent description of the struggles most companies keep having when engage in Transformation. It confirms that after so long despite of the proliferation of Change/Transformation Gurus, Book Authors and the MacDonaldization of Change/Transformation that has mass produced thousands of Online certificates without making a significant difference, the vast majority of Change/Transformation Strategies are wrongly deployed and unsustainable because of a Lack of Organization Readiness and lack of Change Governance https://perkuto.com/blog/7-reasons-why-business-transformations-fail-even-with-a-change-management-plan/ https://www.cio.com/article/2988905/why-business-transformation-programs-fail.html https://whatfix.com/blog/5-change-management-strategy-failures-to-learn-from/ https://www.dhirubhai.net/pulse/73-business-transformations-fail-biggest-failure-factor-lowgren/ https://thriveglobal.com/stories/4-reasons-culture-change-initiatives-fail/ “Preparing the soil is necessary before seeding Change. Otherwise, no change will ever happen” ---Hitoshi Yamada (Taiichi Ohno's Protégé) Isn't amazing that after so long (despite of Hitoshi Yamada's recommendation). most companies ignore such a critical task (Readiness Assessment)? Would you let a doctor operate on you without doing an examination first? It is like just jumping into a pool without even checking if you know how to swim, If Leaders did an Organization Readiness Assessment before engage in Transformation to check how fit/ready Organization is (no guessing) to proactively address any Capability gaps (Culture/Processes Systems) the number of Change/Transformation strategies wrongly deployed would be greatly reduced if they know how to swim? Would you let a doctor operate on you without doing an examination first? Thank you for sharing