Three Keys to Successful Transformation

Not only is change constant, but it can be difficult. We are constantly challenged by change in both our personal and professional lives. This article explores three keys to successfully lead change and transformation.

Change Is All Around Us

In our personal lives, we see the impact technology is having on consumer behavior. Highly targeted advertising fills inboxes, social media feeds attempt to influence purchasing and lifestyle decisions, and on-demand delivery of goods and services erodes impulse control. Technology is influencing our personal lives daily.

The same is true in our professional lives. Technology-focused business entrants are disrupting well-established industries. FinTech has impacted banking; ride-sharing has disordered the taxi and car-service industry while expanding food delivery; and online retail has forced traditional brick and mortar stores to evaluate their business models. The impact of these industry disruptors is being felt by individual workers. Moreover, artificial intelligence (AI) is changing the way we work; it is completing tasks and making decisions that professionals have typically made. It is only natural that some workers are hesitant to embrace changes that may impact their livelihood.

Keys to Leading Effective Transformation

As leaders, we are responsible for paving a path toward progress. While we may not be able to clear every obstacle, there are certain actions we can take that will reduce the anxiety around change and empower our teams to control their part of the transformation narrative.

To remain competitive, businesses adapt to market evolution. These adaptations tend to focus on a handful of desired value-creating outcomes, namely:

• an enhanced client experience,
• revenue growth,
• increased capacity or productivity, and
• expense reduction.

Improvement initiatives built around these outcomes often require investment in technology or tech-enabled processes and are therefore framed as “digital transformations.” However, technology is merely a tool; for a transformation to be successful it needs to incorporate three key elements, purpose, people and process.

Key #1: Purpose

Prior to embarking on a transformation journey, leaders should understand their organization’s goals and strategy. Envisioning a desired future-state through an agreed-upon strategy enables leaders to align goals and set priorities. This vision defines the transformation and gives it purpose. Furthermore, by aligning the transformation with strategic goals, the outcome becomes well-defined, with clear and measurable metrics that support the desired value creation, thereby allowing the team to measure its success. This is true whether reinventing an entire business or overseeing a program of continuous improvement.

Purpose aligns transformation with strategy.

Weak alignment between the organization’s strategy and a planned transformation is a path to failure. Even if the transformation is successfully implemented, it has failed to advance the organization’s strategic goals. An organization whose strategic goal is to grow its business via enhanced client experience and cross-selling should not focus its transformation efforts on expense management initiatives. The expense initiative may simply belong to a different part of the firm where it is a strategic priority. Purpose also benefits the individuals impacted by the change. When strategy is accepted across the organization, individuals impacted by the transformation understand both the reason and the desired outcome. Resources and effort dedicated to the transformation are supporting the organization’s strategic goals, and the transformation becomes an extension of the strategy.

Key #2: People

Transformation doesn’t happen on its own. Your team needs to be engaged, and that engagement begins with you. Senior leadership demonstrates its commitment by showing personal interest. Start by reinforcing the strategy and explaining how the transformation aligns with the goals and leads to the envisioned future-state.

Tailor your communications to your audience. Make the transformation personal to them; model their outcome. How will theywork? What benefits will they experience? Depending on the scope of your initiative, you may need to develop multiple messaging points for different audiences.

Combine logic with emotion to connect people with the transformation. Individuals may be influenced by status-quo bias; even though a logical explanation of the transformation’s benefits are clear, fear of the unknown may generate enough emotional inertia to avoid supporting the change. It is not logical, it is emotional. This is why the connection needs to be personal. A mass, all-encompassing, impersonal message will not generate excitement because it won’t penetrate the emotional barrier.

Transformation initiatives typically encounter some opposition. Consider involving the uninterested in open discussions or brainstorming sessions early on to incorporate their input as you develop the transformation plan. Look for other ways to build trust and remember, you don’t have to do it alone. Identify champions, who share the vision, to be ambassadors that create additional buzz throughout the organization. Be personally involved; if it is important to you, it will become important to them.

Understand that implementing change will impact your team’s ability to do their daily jobs. Many leaders are challenged to find the capacity and skills within their teams to support transformation initiatives. Some initiatives may require outside resources (e.g., project managers and consultants) to support the change. Engaging outside resources will impact your team, and if not executed properly, may sabotage an initiative they originally supported. Allowing your existing team to focus on their daily responsibilities while bringing in consultants to implement a future way of working can feel threatening. The team may feel marginalized and powerless to the changes happening around them. This may result in distrust of the initiative and fear of being blocked out because they are being made redundant. These fears are real and need to be addressed. Create opportunities to engage your best talent to grow and be part of the initiative - back-fill their role while they are focused on the implementation. It is easier to cover and train for the back-filled role. Recognizing the potential of your existing talent by making them a member of the implementation team has the added benefit of converting them into a transformation champion that can promote the change internally. Leveraging your existing subject matter experts (SMEs) establishes clear owners for the various components of your transformation and enables efficient decision making. Your team’s engagement is critical to your initiative’s success – it is up to you to get them engaged.

Key #3: Process

Actual implementation is tactical and relies on a disciplined change-management process. This final key is about the clean execution of a well-defined project plan; it is about having a process for implementing change.

Governance

Successful transformations tend to begin with a fact-based analysis that identifies opportunities to advance the organization's strategy. Once identified, convening senior stakeholders as a steering committee conveys the importance and scope of the initiative. While the steering committee owns the initiative, their purpose is to empower others to make it happen. By taking ownership and empowering others, the steering committee can focus on the wider goal while detaching itself from certain details. Detachment from the details allows committee members to cut though the noise and provide direction to the implementation team when needed.

Increased focus on transformation has seen the creation and rise of Transformation Officers. This role not only focuses on advancing the firm’s strategy through transformation, but also strengthening collaboration across the organization. Transformation does not happen within a silo. This is why many organizations choose to promote the Transformation Officer role to a Chief title.

The Chief Transformation Officer, along with the steering committee, provide initiative oversight. This includes overseeing the implementation plan, ensuring resources are available to meet deadlines and that decisions are consistent with both firm strategy and culture. It is important that the committee, generally led by the Chief Transformation Officer, be disciplined in its approach to project management, but not inflexible. Rare is an implementation that goes perfectly to plan. Occasionally work needs to be redone, user-acceptance testing reveals critical flaws, data conversion fails upon validation, and key resources become unavailable. These things happen, and while allowances should be built into the plan, sometimes deadlines need to be modified. This is why regular engagement with the steering committee is so important. They provide the flexibility when warranted and maintain discipline to ensure the initiative delivers as promised. Since the committee is not engrossed in the details, it is able to maintain perspective on when to shift or even pivot and when to remain steadfast.

Accountability

Impactful transformations often begin as an idea that morphs into a series of deliverables, staged in time-bound steps with defined outcomes. That process creates the basis of the project plan and is a source of accountability. The project plan should be utilized by the entire project team, from the steering committee to individual contributors, in order to monitor progress, highlight slippage and potential bottlenecks, and most importantly, facilitate conversation. The plan will change; however, it is important to plan. Large-scale transformation is impossible without a plan. Build allowances for likely issues but avoid overcomplicating the plan by trying to consider every contingency. Over-planning distracts from the main task at hand and rarely can every eventuality be predicted. Be disciplined in managing to the plan, and flexible in recognizing that the plan may need to be modified.

Accountability requires defining success for each step of the plan, identifying a clear owner for that step and being able to track progress and completion. This means identifying metrics within your project plan. Accountability is about setting the standard.

Standards are not set by the best of what is achieved, but by the least of what is accepted.

Urgency

Transformation will take time and it needs to be approached with a sense of urgency. There is a dichotomy between exercising patience and insisting on urgency. The reason for urgency is that achieving the sought-after results (e.g., improved client interface, revenue growth, increased capacity, reduced expense) creates value for the organization, and that value, once captured, can be reinvested in new initiatives. This value-creation/reinvestment cycle creates a culture of continuous improvement. Urgency inspires action, and in a culture of continuous improvement change becomes a constant with which everyone is comfortable. What begins as a digital transformation culminates in a cultural shift that changes the mindset of individuals across the organization.

Technology is the tool, but the key to transformation is purpose, people and process.