Transformation!

If you work in any corporate environment, you know the amount of emphasis that gets put on strategy and planning. Everything needs to be strategized and put into framework. In fact, consultants make their living on this and are mostly responsible for coming up with fancy words for normal common processes, technologies, and things. The latest buzz word in corporate setting is “transformation” and more specifically “digital transformation” which basically means conducting business digitally – whether commerce, movement of information etc. But unless you say you are transforming; you are not doing it right. Another buzz word making the rounds is “remit” which basically means charter - but sounds much cooler! Like “What is your remit?”. Enough said :)

How many times have you seen the below story unfold? A new leader starts, first they declare that everything that was done before was wrong and the existing talent, process etc. are no good. They hire a bunch of consultants and spend a year just strategizing. Then another year putting a brand-new team together. Then when the execution is about to begin, they move on and repeat the cycle somewhere else. It is a big problem in the industry and something you see over and over again in corporate setting. All that has happened during their time is paperwork. Production of slide decks and documents is considered victory and they claim that they have transformed that company or the department! It is amazing how often this happens.

It is very easy to fall into this trap. So as a leader how do you avoid falling into this pitfall yourself and instead create the change the right way. Change is happening all the time; humans know how to deal with the normal pace of change. When the rate of change is significant it is usually termed as Transformation.

Typically, unless the company or department is just completely broken, you don’t need to change everything. It is usually a few targeted things. You have to understand how it got into the situation in the first place. Is it because of competitive forces in the industry that completely disrupted the market, or is it the lack of excellence on the company’s part to keep up with the industry? The answer usually is a combination of multiple things. Success leads to complacency and provides an opportunity to competitors. Unless you regularly manage the talent, you accumulate more than the normal share of low performant workforce over a period of time. That is why the most successful companies are always paranoid and ensure that they are performing better than competition all the time. Success is a result of habitual excellence not a one-time transformation! Transformation is a double-edged sword; it is a big disruption. If done right it could yield miracles or it could blow up and put the company further behind. If you practice excellence every day, ensure continuous improvement and innovation, and disrupt yourself in controlled fashion, you usually don't need to resort to the forced nuclear option of strong disruption due to transformation.

But in case you do need to go down this route here are some of the practices I have followed. To make a real and lasting change, I have followed a 3-step formula myself and it has worked well.

Build strong teams: Everything starts with people. You assess the skill set of the team, quickly identify the non-performants - walk them out the door. That sends the strong signal to other folks to start performing or they are next. In parallel, you hire or promote a few key positions where there are gaps and raise the competitive bar in the team. Put the right people into the right roles. Everyone else have to compete with the new talent and raise their game. This raises the quality of the team very quickly. It is very important to continue to add talent and promote but equally important to prune the non-performance on regular basis. Nothing demotivates a team more than the management that rewards the low performers.

Build Operational Excellence: Second, quickly identify what is working well. Don’t throw the baby with the bath water. Strengthen that is working well – turn it into a competitive advantage if you can. It is much easier to build on your strengths. Some of the leaders completely neglect what is working well while prophesying that everything is broken and will be fixed after they have transformed. In the process, they create too much risk for the company and themselves.

It is important to setup good operating metrics for regular, business as usual part of your organization and have a good periodic rhythm to review those metrics and drive continuous improvement - Emphasize and reward operational excellence. I like weekly or bi-weekly reviews on stable topics thereby ensuring there is constant improvement. This creates efficiencies that can be invested into areas of new growth.

The above two actions will help you stabilize the environment and allow you the time, energy and resources required to fix what actually needs to be fixed.

Innovate: The reason you probably have to resort to transformation in the first place is usually lack of innovation. Identify what needs to be actually built anew. This is the part that is going to take the most intense effort and energy. You identify a small core team of the smartest and most driven people to tackle this problem - people who understand your current operations well and are not afraid to change. The biggest mistake executives make is they dedicate the people who are least busy to this effort - the talkers. They are the reason you are where you are. In this area you have to get pretty hands-on or neck deep. I have done every alternate day scrum meetings with the team to keep the rhythm and progress. Meet and review the status and give the team a day in between to make progress. The goal is to quickly formulate the V1 of the strategy and then get into execution. Strategy and Vision without execution is hallucination. Execution is tough and requires determination, perseverance, and grit. It takes time and energy. Your goal is to move into execution as soon as possible. How do you do that?

Simplify the strategy and vision. Identify what is core vs. context. The solution to any problem usually entails some easy and some complex parts. There are some no regrets decisions that can be quickly identified and implemented while others continue to solve the tougher problems. This creates positive energy. Nothing motivates the team more than seeing actual code or other deliverables. For the tough part of the problem, prototyping and experimenting is essential. Don’t get too much attached to your own ideas, validate them. Use a combination of instrumentation, data mining, and intuition. This is where you are likely to have to fail fast, learn and improvise. Use Agile to your advantage.

While quality is important, continuous improvement is equally important. Your goal is to get the product to Operational excellence stage quickly. That is where you scale and reap the rewards.

Most of the initiatives fail not because of lack of strategy or knowing what to do. But because of inability to do the right things with quality and speed. Working code or product is 1,000 times more valuable than the best crafted slide decks. Quality and agile execution is king!

Once you get out of the hole, it is equally important to ensure you never get in there again. Long lasting success is a result of daily excellence not a one-time transformation! While the one-time transformation may detoxify and clean the system, there is no substitute for habitual excellence practiced every day.