Challenges in transformation: A perspective
"All successful revolutions are the kicking in of a rotten door. The violence of revolutions is the violence of men who charge into a vacuum." – John Kenneth Galbraith
It is difficult to find a better quote summarizing what major upheavals, even in organizations, are about. Major turnarounds and transformations are not gentle, they don’t come about because someone at the top or on the cap table or on the board believes that chaos is a good idea. They are triggered because the business environment has changed, or a big opportunity has opened that upends existing business models or something similar. And why ‘transformation’? Because the ‘rotten door’ of organizational habits and current thinking is blocking the path. ‘Violence’ is inevitable because no matter how hard you argue, resistance to change on part of status-quoists is going to create roadblocks all the way. A successful transformation, however, cannot afford to be chaotic (unlike political revolutions).
Resistance to Change
Human beings are creatures of habit, and we tend to resist anything that disrupts our belief systems and routines. When it comes to business transformation, additional factor of fear for their job comes into play. Involving employees in the transformation process from the beginning and communication do help. But you might need to do more than that. Training and support to employees to help them adapt to the changes might be necessary, at least for those employees who are willing to work at it. You need to keep in mind that it is not possible to persuade 100% of your people. At some stage, it is a judgment call to ask them to simply get on with it.
Refusal to Take Tough Calls
A common misconception is that taking tough calls means laying off people or shutting down a business. That is not the whole truth. In an impersonal setting, decisions to cut pay or reduce the workforce are not that difficult to take, especially if someone lower down the chain is tasked with doing the ‘dirty work’.
Real leadership challenges lie in standing up for your conviction and roughing it out with people who are more powerful than you. When the shareholder consensus or the board consensus is for reducing the workforce by 10%, for example, it takes both conviction and fortitude to argue that you won’t do it. Likewise, it is not easy to tell your trusted lieutenants that they need to either fall in line or be on their way out.
Lack of a Compelling Vision
By throwing out the old, you have created a vacuum. It matters what you are going to fill that vacuum with. You might believe you have created a compelling vision of the future, and everyone should love it. That belief needs to be tested because the proof lies in the acceptance of that vision by your teams. Be on the lookout for signs that your vision is proving to be a hard pill to swallow for people, or they are switching off, or it is just not exciting enough for them. Be ready to scale down the goals or modify them or to change the path to success so that it is compelling for the majority, if not for everyone.
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Lack of Resources
Possibly the most underrated challenge, compounded by the fact that major transformations are attempted in resource-poor situations many times. There are many variations of this – resources continue to flow into existing sinkholes despite the realization that you are throwing good money after bad, teams working on critical pieces don’t get necessary support because of ‘hiring freeze’ or ‘CAPEX freeze’, or innumerable other excuses driven by inertia or political expediency or sunk cost fallacy. If you want your business to flourish and strategic initiatives to succeed, it helps to be clinical about shutting down resource flows to dead ends and give adequate resources to change initiatives.
Commitment from the Top
First and foremost, test your own resolve. Have you thought through how good, bad or ugly the process is going to be? Have you kept in mind the fact that all great initiatives might start with a lot of energy and fanfare, but they look like a disaster in the middle almost always? I have seen this happen time and time again, with almost no exception. If you want to see a big initiative through, you must be convinced that it is worth pursuing when everything looks like going up in flames. If you are the CEO, have you convinced the Board and the shareholders that they need to hold their nerve? If you are a CXO, do you have the commitment from the CEO that the change being sought will not be abandoned at the first signs of chaos? Your task becomes particularly difficult when you consider the fact that there is always a risk of overcommitment, staying the course when you should abandon it.
The best way to deal with this phenomenon is to set the decision criteria at the start as to when you will push through with the change versus when you will cut your losses. Ideally, these decision criteria should be key business metrics that allow you to fail fast before getting too deep into it. For example, if you are attacking a new market, you should have a cut-off time and market share / growth metric (gain 5/10/x% market share in 12 months). This is not the perfect solution but allows you to persist or pull the plug based on criteria that were decided when emotions were not running high and things looked sane.
Conclusion
Good leadership is hard. Good leadership during turmoil, change, transformation or other times of stress is doubly hard. There is no perfect solution, just pointers based on your and others’ experiences during tough times. The good part is that if you get it broadly and directionally right, things tend to work out.?