Travails of Change

Why is transformation so hard? And how to improve its chances for success? This article will cover these questions and outline a proven approach I have executed in the transformations I have led, along with learnings I have accumulated along the way. I hope it provides you with a helpful guide to better execute a transformation or to be a more effective contributor to that transformation.

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Business transformations are never simple. The biggest mistake organizations make is to focus more on strategy, systems, processes, and investments, than on their people. People are the key factor driving that complexity, and should be the key focus of any transformation: without engaging, convincing, and incentivizing people, all other efforts are very likely to go in vain.

Resistance to change is one of the primary reasons for the failure of business transformations. Transformation equals change, and change results in placing people outside their comfort zone. This is especially dangerous in cultures that do not reward people taking chances, that do not have patience with learning through failure, and that ultimately do not create a bond of trust with the employees. If employees don’t feel they have a stake in the success of the transformation, they will likely resist changes to their roles & responsibilities due to fear of the unknown, loss of job security, and discomfort with the new.

Overcoming resistance requires effective Change Management with clear, frequent communication and engagement of employees throughout, along with cultural change. Cultural change has been a constant objective of every transformation I have been involved in. Without addressing the cultural gaps versus the requirements for the new strategy, every aspect of the transformation becomes harder, it takes longer to see any tangible results, and results are less sustainable.

I have sufficiently hammered the point in previous articles that I believe having the right culture is critical. Building strategies, processes, systems, and equipment to be run by a Kingdom of Mediocrity is a waste of time and money. Reshaping a Kingdom of Mediocrity into a Flywheel of Excellence should be a key consideration in any transformation to improve its chances of success.

Outlined below are the two key steps I consider critical to a successful transformation, both of them addressing the people factor, from the top to the bottom of the organization:

1. Strategic Alignment. A transformation is not performed in a vacuum. There should be complete adherence to an overall strategy. This strategy should be built upon an adequate diagnosis of the business and its competitive context.

Even more important is to obtain leadership (CEO, Board, shareholders) buy-in and commitment, which ensures full alignment with and support of the strategic vision, objectives and timelines, and ensures that the transformation is adequately funded with the required financial and human resources and that its importance is clearly and frequently communicated.

If the leadership does not fully champion the transformation, a Pandora box of troubles opens. Leadership will fail to communicate properly and create confusion, they won’t follow-through the tough decisions leading to inconsistent decision-making, and they will deprioritize resourcing, cutting the funds and talented dedication to the initiative.

As in the saying: “Change is hard at first, messy in the middle, gorgeous in the end”, if leadership does not have enough gumption to face the messiness, priorities will change and the change will fail.

2. Change Management & Cultural Change. Without proper communication, there is no cultural change. Effective communication is a cornerstone of successful Change Management. That means clear, consistent, and targeted communication to build awareness, understanding, and commitment, with the objective of engaging and informing stakeholders at all levels. It should be multichannel, synchronous (town halls, in-person meetings, online conferences, phone calls) and asynchronous (emails, newsletters, recorded sessions, news boards), and emphasize the WIIFM (What's In It For Me) factor.

This commitment to communication is not trivial. Many leadership teams distrust the maturity of their employees to handle the information, keeping them in the dark, making them victims (as opposed to owners) of the change. In these situations, I always reply: “if not given the information, how would they mature? If you treat people like children, won't you expect them to behave like children?”

But Change Management is not only communication. It also means understanding the impact of change, managing resistance, and supporting employees through the transition, which includes creating change plans, assessing and addressing risks, providing training and support, and measuring the adoption of new behaviors and practices.

A key exercise I always propose as the next step after getting alignment on the strategy and transformation plan is to perform a full-fledged performance review of the organization. I will lay this out in more detail in a future article, but in short, I consider it a stepping stone to any other initiative and a booster for cultural change. It helps identify the talents and the best leaders in the organization (from the quality of their teams), as well as core competencies and capability gaps. But more importantly, it forces the organization to communicate to each employee how it sees their performance and career prospects, avoiding the Career Limbo Trap. This helps increase the trust in the organization, which must follow through on these commitments.

Finally, it is important to have people dedicated to running the change management and the track and monitoring of the routines of the transformation, such as a PMO – Project Management Office. Transformations typically have many initiatives running in parallel, with co-dependencies and team members spanning across functions and departments. Ensuring the change is visible ("what isn't measured cannot be managed") and that its execution is disciplined helps avoid many of the issues in project management: lack of end-to-end ownership, creeping scopes and timelines, mismatch of KPIs and objectives, etc.

Ensuring these two key steps are taken makes everything else in the transformation easier to execute, with a higher probability of success.