Five Tips for Business Transformation

It was 2003, I was in my mid 20’s, working for a mid-sized company, when my turn ‘to serve’ came. I was assigned to manage our secondary office and the business in its area. Back then, everyone wanted to work form the head office, as they believed it came with more exposure and attention and the office space was very modern. Even when my bosses offered me the job, they said ‘to succeed in this company, you have to serve in the secondary office’ not realizing they attached a negative positioning for the role. Frankly, I didn’t even realize the negative connotation, I was just super excited to get promoted but more importantly, I felt liberated. I remember thinking ‘I can start executing my ideas and showing the leadership team my capabilities’.

Together my colleagues from that office we started to transform the business. In less than a year, we went from the least performing area, to outperforming all other geographies. Soon, majority of the talent wanted to move and work in our office. It was no longer perceived as an obligation but became a desire. Even the company’s football games moved from being played in the head office city to ours. It was then that I realized how rewarding a successful business transformation can be for a company and its people. Since then, I have been fortunate to be part of and lead multiple successful business transformations of either teams, departments or a total company, with turnover exceeding $500 million annually. Every time the business outperformed the market. These experiences helped me establish a few principles for myself that I follow when transforming an organization. I refer to them the 5 tips for business transformation.

Tip 1 : Stick to the course, as there is no going back.

I remember when we embarked to decentralize order processing and assign it to all salespeople. The first week of execution we had a review on the progress. The number of issues raised in the meeting could make your head spin. From devices running out of battery to orders getting deleted, from salespeople feeling they waste time to their managers demanding a change in sales incentives and on and on. The easiest decision was to say “OK let’s move back to central invoicing and start again when we fix the issues.” I must admit I was very tempted to do so given the business pressure. However, rather than succumbing to the issues, we decided to doubled up. We gave ‘double or nothing’ incentive to the sales force showing them a reward if the system works; we gave them extra admin support and made this project the number one priority for our Information Technology department. Within weeks the system was 90% perfect and the company gained order processing capacity that was 100 folds what it had with the same resources. 

When faced with such challenges remember the following:

-         There was something within the business that triggered the NEED for change/transformation and ignoring it means succumbing to failure or letting go of an opportunity. In my example, the issue was around limited capacity to process orders, which impacted our ability to service our clients. If we stopped when the challenged came up, we would have put our business at risk.

-         Once the transformation begins, it could require a change in direction as it is being implemented to ensure it progresses rather than regress back to status quo.

-         It is almost impossible to transform a company without impacting the culture. Stopping a transformation halfway through will likely have devastating impact on the culture of the organization. This almost always leads to lack of trust towards the leadership & keeps insecurities lingering within the corridors.

Prepare yourself for good days and extremely bad days, prepare to feel overwhelmed or waking up to yet another groundhog day, but always stick to the course and remember stopping is far worse than grinding through it.

Tip 2: Warning: Beware of your tolerance level.  

I was leading a project to transform the entire process of budget management. Part of the work required us to implement a system that centralizes all spends and shows progress and budget status. During execution, we realized that one of the organization’s activity was very difficult to integrate, so, we opted to integrate all others and leave that to be tracked separately. The new process required us to reference two systems to finalize any budget review and that became the new adopted process. One day a new employee joined the meeting and said, “Why do we have 2 systems?” I thought to myself, “Why?” Did we adopt the interim solution as our ongoing process? Did I sacrificed part of the transformation to run the day to day business? I created a tolerance for an imperfect process. That realization woke me up and we completed the transformation within a few months.

While leading a transformation you have a different and usually a broader perspective on the situation than most others. That is why many look to you to make the call when things are grey. If you have a dual hat of leading the day to day business and playing a big part in the transformation, you can end up developing a tolerance level to existing standards/practices that otherwise need to be changed. Maybe, the short-term business needs forces you to derail a certain execution for a few weeks but then you end up tolerating it for a very long time. I call this the broken chair syndrome. No one sees it unless you sit on it or its your first day at work and you are admiring the new office. You need to always walk into the office keeping in mind the objective and purpose of the transformation. This will help you reset and flush out the negative tolerance you built due to being sucked into the day to day. You will be the one that will always see the broken chair and make sure its fixed.

Tip 3: Understand the organization’s ELASTICITY.

I had a few meetings lined up with different departments to brief them on the road ahead. My 8 AM meeting was brilliant; everyone was excited and even started sharing ideas and expressing support around the concepts. I remember thinking, WOW! This is going to be easy.” Then my 3 PM meeting reminded me how difficult change can be for some. They shared with me all the risks and reasons why we should not change and gave me clear examples why things are the way they are and need to stay the same. 

Later when reflecting on the meetings, I could see distinct differences between the groups. The 8 AM group had on average a much lower working experience and were predominantly new to the company. The 3 PM group, on the other hand had vast experience and belonged to a higher age group. The two groups had different elasticity. The willingness and speed by which an organization is ready to accept and execute change, is what I call Organizational Elasticity. There are many factors that impact Organizational Elasticity, but here are the ones I believe are most effective.

-         Average age of employees

-         Average years of service

-         Diversity of culture

-         Average tenure per job role

Usually, the longer an employee has served, the more difficult it is for him/her to apply new practices. This is normal because retraining is more difficult than training from scratch. It is even more difficult in companies where there is limited job rotation (meaning many employees have been doing the same thing for a long time). Age plays a big role too, as we know that as we grow, we tend hold on to our ways/habits.

I usually classify organizations into one of three elasticity categories, and these are Soft, Medium, and Hard Elasticity. The category names refer to the level of Elasticity.  It a good idea to map out the organization on an Elasticity Quadrant (refer to diagram below) and find out in what category it falls. Age and Years of Service go hand in hand and likewise cultural diversity and job diversity. For example, an organization with a younger average age of employees and low years of service will fall in the SOFT quadrant. Meaning it is easily molded and employees will adapt to the new system faster, as they have little or no preconceived ideas on how things should/were done. On the other hand, an organization that does not rotate staff and has very low diversity will fall in the HARD quadrant. Meaning it will take a different approach than a medium or soft elasticity organization to change.

Every elasticity poses its own pros and cons. Obviously the softer the organization the faster the change but while a Hard organization might take more time, it might eventually be a much more cost-effective execution. This is because you might find individuals who know the system so well that will help you save time and money. Taking on a transformation project by ignoring a company’s current elasticity is simply setting yourself up for failure. (This article is not about how to deal with SOFT, MEDIUM or HARD elasticity, it’s just to share the concept of elasticity that I use. I might follow through on a separate article on the Pros and Cons of each and how to best go about making changes in each).

Tip 4: Know the existing talent.

Transforming is not about bringing in new people either from outside or across departments. Yes, most of the times it is needed, especially if there are roles that are new to the organization or a role is reclassified and requires specific talent. However, from my experience, the biggest contributors to any transformation come from within the existing team. The vast knowledge about the company culture, systems and history which employees hold is truly irreplaceable.

In general, converting existing employees to believe in the new way of work is much more difficult than a fresh hire for obvious reasons (especially in a Hard Elasticity Organization). However, if existing employees believe and understand the benefits, they are in the best position to make things happen fast and with the least possible issues. That’s because they know the process, systems and each other very well.

It is important you spend time meeting one-on-one with employees. Also immerse yourself in what they do on day-to-day basis. Try to understand their pains and what they are trying to achieve. If you feel there is resistance don’t jump to conclusions because most of the time people are not objecting, they just lack clarity.

As much as it is important to include exiting employees, it is equally important to include new ones too. Its critical to execute change fast and swift. If you are 100% convinced that a new talent is needed, then don’t draw out the process. Lack of action creates insecurities which lead to a downward spiral across the entire team.

Tip 5: Culture - strongest weapon or worst nightmare.

During transformation, people are challenged as new people are on boarded, new processes introduced, redefined deliverable, job profiles rewritten and this could lead to an environment where insecurity and fear flourish. If this is not addressed from the start, then it is highly likely that the transformation will either fail or be a long, painful and costly process.

Here are behaviors that should prevail to avoid negativity:

1-     Make sure the organization knows very well the reasons and objectives of the transformation. Be open about it and make sure they understand the need behind it. Do it through emails, meetings, show and tell forums etc.. The change can never be over communicated. The more you talk about it the more people understand it.

2-     Call it what it is… CHANGE , TRANSFORMATION etc.… do not shy away from it. I have seen companies trying to use words like ‘evolve’ or ‘adapt’. Employees need to know clearly what is going on. Be authentic and establish trust.

3-     Try as much as possible to break down the process into smaller milestones. Connect success in business results to the change made and celebrate those. People work hard and they need to see the results and be appreciated but it is equally important for them to see the impact of the change, so they continue the path of transformation with conviction.

4-     Never blame an individual, always address the problem and not the person. If someone is singled out people start to take less chances in adopting something new.

5-     Baby wins and steps should be praised. During transformation its recommended to over praise, especially if it’s a major transformation.

6-     Remain highly engaged when a new system/process / department is introduced. Set up indicators to see the progress. Establish progress reviews as they help immensely. It is a platform for people to share their challenges and frustration giving you time to redirect. Finally, ask about progress every day, get obsessed by the change until you see it running like clockwork.

7-     Remain open to ideas and be ready to learn and understand the company very well. Forget, methods and processes that worked in the past. An open mind, will help in adapting and evolving ideas to make sure they fit the process. 

To bring it all together, I would like to begin with a quote that I always tell my team: “ If we are not changing, evolving or transforming today, then as an organization we are already obsolete. It is only a matter of time”. Given the inevitability of change, we all must embrace it and stay the course and avoid being blinded by our day to day tasks. Executing a transformation within an organization is best achieved when we understand the organization’s readiness and elasticity to change. When we put an effort to best utilize the talent at hand or recruit swiftly. When we create a culture of high engagement, encouragement and authenticity. And finally, when one keeps an open mind to continue to learn and transform him/herself.

“My writings are purely based on readings, experience & knowledge acquired over the years… I like to create engagement through these articles from managers & leaders who have a wealth of experience and knowledge to share. Please challenge and share your thoughts and ideas on these articles….”