Trying Transformation? ERROR alert!!

“Change is inevitable, but transformation is by conscious choice.”[1]

Transformation can refer to your growth opportunities. In a world of unprecedented disruption and market turbulence, transformation today revolves around the need to generate new value—to unlock new opportunities, to drive new growth, to deliver new efficiencies. Specially, after this pandemic period, most of the organizations may face the urge to make efforts taking steps of transformation immediately to fight against the financial and infrastructural consequences of COVID-19.

Business transformation is a change management strategy which can be defined as any shift, realignment or fundamental change in business operations. The aim is to make changes to processes, people or systems (technology) to better align the company with its business strategy and vision by taking several efforts. These efforts can go under many banners: total quality management, re-engineering, rightsizing, restructuring, cultural change and turnaround. From giant companies to the small profiting ones, many have been successful to transform making them a better competitor. But, most of them faced failure instead of immense growth.

So, why does this failure take place? How can we be successful to cope with the challenging environment?

The most general lesson to be learned from the more successful cases is this change process goes through a series of phases with considerable length of time. Skipping the steps creates illusion of speed- critical mistake in any steps ends up in slow momentum with devastating impact.

John P. Kotter, the Konosuke Matsushita [2] professor of leadership at the Harvard Business School, believes that this failure happens because many managers don’t realize the fact-

“Transformation is a process, not an event.”

Hence, he states his famous 8 steps model for transforming your organization.

Step One: Create a sense of Urgency

·        Examining market and competitive realities

·        Identifying and discussing crises, potentials or major opportunities

Step Two: Form a Powerful guiding Coalition

·        Assembling a group with enough power to lead the change effort

·        Encouraging the group to work together as a team

Step Three: Create a Vision

·        Creating a vision to help direct the change effort

·        Developing strategies for achieving that vision

Step Four: Communicate the Vision

·        Using every vehicle possible to communicate the new vision and strategies

·        Teaching new behaviors by the example of the guiding coalition

Step Five: Empower others to act on the vision

·        Getting rid of obstacles to change

·        Changing system or structures that seriously undermine the vision

·        Encouraging risk taking and nontraditional ideas, activities and actions

Step Six: Plan Short-Term Wins

·        Planning for visible performance improvements

·        Creating those improvements

·        Recognizing and rewarding employees involved in the improvements

Step Seven: Consolidate Improvements and Carry on Changes

·        Using increased credibility to change system, structures and policies that don’t fit the vision

·        Hiring, promoting and developing employees who can implement the vision

·        Reinvigorating the process with new projects, themes and change agents

Step Eight: Institutionalizing new approaches

·        Articulating the connections between the now behaviors and corporate success

·        Developing the means to ensure leadership development and succession

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In reality, even successful change efforts are messy and full of surprises. People even following these steps suffers from a lot pitfalls in each attempts! There are a number of mistakes that people make, but there are some common (yet huge) errors that occur. In a short article everything is made to sound a bit too simplistic, but taking the insights, we can always reform as it’s needed for own cases.

Error 1: Not Establishing a Great Enough Sense of Urgency

Sometimes executives grossly overestimate how successful they have already been in increasing urgency forgetting how hard it is to get people out of their comfort zone. In many cases, executives become paralyzed by the downside possibilities. The fear of unwanted possibilities to lose the secured condition of seniors and management after the approach.

“Over 50% of the companies fail in this first phase.”[3]

Error 2: Not Creating a Powerful Enough Guiding Coalition

Companies that fail in phase two usually underestimate the difficulties of producing change and thus the importance of a powerful guiding coalition. Having no history of teamwork at the top can make it worse. Sometimes expecting the team to be led by a staff executive from human resources, quality, or strategic planning instead of a key line manager cause the failure.

 “No matter how capable or dedicated the staff head, groups without strong line leadership never achieve the power that is required.” [4]

Error 3: Lacking a Vision

In failed transformations, there are plenty of plans and directives and programs, but no vision. In one case, a company gave out four-inch-thick notebooks describing its change effort. In mind-numbing detail, the books spelled out procedures, goals, methods, and deadlines. But nowhere was there a clear and compelling statement of where all this was leading.

 ‘If you can’t communicate the vision to someone in five minutes or less and get a reaction that signifies both understanding and interest, you are not yet done with this phase of the transformation process.’[5]

Error 4: Under-communicating the Vision by a Factor of Ten

Transformation is impossible unless hundreds or thousands of people are willing to help, often to the point of making short-term sacrifices. Employees will not make sacrifices, even if they are unhappy with the status quo, unless they believe that useful change is possible. Without credible communication, and a lot of it, the hearts and minds of the troops are never captured.

 “Use every possible channel, especially those that are being wasted on nonessential information.”[6]

Error 5: Not Removing Obstacles to the New Vision

In the first half of a transformation, no organization has the momentum, power, or time to get rid of all obstacles. But the big ones must be confronted and removed.

Sometimes the obstacle is the organizational structure- narrow job categories can seriously undermine efforts to increase productivity or make it very difficult even to think about customers. Sometimes compensation or performance-appraisal systems make people choose between the new vision and their own self-interest.

“Perhaps worst of all are bosses who refuse to change and who make demands that are inconsistent with the overall effort.”[7]

Error 6: Not Systematically Planning For and Creating Short-Term Wins

Real transformation takes time, and a renewal effort risks losing momentum if there are no short-term goals to meet and celebrate. Most people won’t go on the long march unless they see compelling evidence within 12 to 24 months that the journey is producing expected results.

“Creating short-term wins is different from hoping for short-term wins. The latter is passive, the former active. “[8]

When it becomes clear to people that major change will take a long time, urgency levels can drop. Commitments to produce short-term wins help keep the urgency level up and force detailed analytical thinking that can clarify or revise visions.

Error 7: Declaring Victory Too Soon

Typically, the problems start early in the process: the urgency level is not intense enough, the guiding coalition is not powerful enough, and the vision is not clear enough. But it is the premature victory celebration that kills momentum.

 “While celebrating a win is fine, declaring the war won can be catastrophic.”[9]

Instead of declaring victory, leaders of successful efforts use the credibility afforded by short-term wins to tackle even bigger problems. On a scale of one (low) to ten (high), year one received a two, year two a four, year three a three, year four a seven, year five an eight, year six a four, and year seven a two. The peak came in year five, fully 36 months after the first set of visible wins.

Error 8: Not Anchoring Changes in the Corporation’s Culture

Until new behaviors are rooted in social norms and shared values, they are subject to degradation as soon as the pressure for change is removed. When the attempt is unable to make people believe that the new approaches, behaviors and attitudes improve their performances- the change never lasts.

“Change sticks when it becomes -the way we do things around here.”[10]

Lately many change management gurus have focused on soft issues like above- culture, leadership, motivation etc. But managing these aspects alone isn’t sufficient to implement transformation projects successfully.

What’s missing?

It’s a focus on the not-so-fashionable aspects of change management: the hard factors. These factors bear 3 distinct characteristics-

1. Measurable in direct or indirect ways
2. Easily communicative, both within and outside organizations.
3. Quickly influencing

The research shows that transformation projects fail to get off the ground when companies neglect the hard factors. If companies don’t pay attention to the hard issues, transformation programs will break down before the soft elements come into play.

In 1992, after researching, Perry Keenan, Kathleen Conlon, and Alan Jackson found four hard factors which can be a leading indicator of the likely success of a project based on objective measures. These four elements are shortly denoted as DICE which made up the great DICE framework tool. Executives must study the four DICE factors carefully to figure out if their transformation programs will fly—or die.

Now coming to the point, what is DICE?

NO! Just kidding, that’s not the DICE we are talking about. The acronym DICE stands for-

Based on the statistical analysis from the outcome of change projects, success can be determined by assessing these four factors. Let’s explain how this score can be calculated.

A DICE score between 7 and 14 is in the "Win" Zone (very likely to succeed), while a DICE score between 14 and 17 falls in the "Worry" Zone (hard to predict success), and a DICE score higher than 17 falls in the "Woe" Zone (indicating high unpredictability or likely to not succeed.)

The DICE framework allows for consistency in evaluating various projects (even though the inputs are subjective).

How can the framework help you?

? Tracking your projects

->  Imagine you have 30 plans, and you need to choose the best 10. Calculate DICE score, take to top ones.

? Managing portfolios of your projects

->   Imagine you have 10 projects going on, you want to determine which one requires how much efforts to meet the goal. Calculate and give more effort in Worry Zone than the Win Zone .

? Force the right conversations of your executives

->   Imagine your fellow executives can’t decide on the important projects. 10 of them have 10 different perspective. Calculate the score and show them to come into a point altogether.

Smart companies try to ensure that they don’t fall into that trap by using the DICE framework in one of three ways. By providing a common language for change, the DICE framework allows companies to tap into the insight and experience of their employees.

Last but not the least, transformation demands the systematic approach.

Hence, Take Steps, Avoid Errors, Calculate the Hard Factors, and finally- TRANSFORM and WIN THE SHOW!

References:

[1]Quoted by Heather Ash Amara

[2] Kōnosuke Matsushita was a Japanese industrialist who founded Panasonic, the largest Japanese consumer electronics company.

[3-10] Transcribed from John P. Kotter

Resources:

1.    Leading Change: Why Transformation Efforts Fail

2.    The Hard Side of Change Management 

3.    Business Transformation

4.    Thinking big with business transformation