There is no silver bullet for all transformational needs. Every company has its own culture, needs, peculiarities, uniqueness, management maturity, leadership competencies that affect what approach will be successful.
Even though we often hear about how a big percentage of transformations fail, we should also look at the positive side. How did the smaller percentage of companies that have successfully transformed do it? What was their secret recipe? There is something in common about the way successful companies executed their transformation programs.
Here are my thoughts.
Tips to a successful transformation
- Clear and well communicated Vision. Answer the question “Why do we need to transform?”
What will the company look and feel like at the end of the transformation program? If the leadership cannot or does not paint a clearly articulated picture of it then how will the company know if it has reached its transformational journey? Too often companies jump into the transformational bandwagon without taking the time to paint this picture. Successful companies do not transform for the sake of transformation. IBM CEO Lou Gerstner clearly painted a picture of IBM moving from a computer selling company to an IT Service Provider. They transformed from selling boxes of computers (which they were losing money) to selling services. This clear transformation saved IBM from bankruptcy.
The organization must also understand the ‘why’ behind the transformation. If this is not clear, at least two negative things may happen. Employees will think that this is just the next ‘flavor of the month’ program of the executives. They do not see the burning platform behind the need to change. The other outcome for not explaining the ‘why’; employees will speculate why the company is transforming. Things like ‘we are going bankrupt, we are being merged with a bigger company, we are down-sizing’ and other negative rumors will start spreading across the organization.
- Core cross-functional process improved. Creating change teams. Core process to be re-built around company values.
Products and services are delivered through 3-5 Cross-functional Core processes. Companies that starts losing marketing share or incur high customer attrition is usually partially caused by faulty cross-functional core processes. These core processes may have been efficient when the company was starting or was smaller than it is today. However, the growth and direction of the company may no longer be reflected in its core processes.
One of GE’s strength under the leadership of Jack Welch was its ability to improve its core process. Six Sigma was implemented across the different GE affiliates. The initiative was sponsored and fully supported by the group CEO. In the earlier days of Jack Welch, executives were expected to understand and run Six Sigma programs. The program was so effective that is was merged with Toyotas LEAN program. The result is the popular Lean Six Sigma. In a nutshell, Lean Six Sigma is about reduction of a core processes errors and cycle time. Let’s take a simple example; customer service. A customer is better serviced if the company has minimal mistakes in its service and the delivery of service takes little time. This can apply to products as well. Delivering products with less or no defect at the shortest possible time is an advantage to any company.
- Bottom-up problem solving
Problem definition is best done from the field and not the boardroom. Too many times, I have witnessed decision making being done by people removed from actual customer touch-point. They are done through personal views and opinions. To make things worse, decisions and problem definition is being done in the absence of data.
In transformation programs, we often forget that problems will be surfaced and needs resolution. Two things to remember in problem-solving. One, we need to involve people closest to the problems. They feel the problem and often know the root cause. We just need to have the humility to ask them. Two, we need to equip them. There are several problem solving and decision-making tools. We need to equip employees with these techniques. It’s similar to asking employees to build a birdcage and yet not provide them the training and tools to carry out the job. A client of mine did a similar tact years ago. This huge retail company was in the middle of a massive change. They engaged us in customized change management & psdm (problem-solving and decision making) programs. They ran these in dozens of batches for company managers.
- Alignment of Structure/Systems and Staff
Transformation will always cause realignments. We need to take this into careful consideration. Organizational structures need to be reviewed in light of the transformation. Systems and processes need to be updated in light of the transformation. Staff and job profiles need to be reviewed and updated in light of the transformation. Transformation programs need to be implemented with sustainability in mind. Transformation needs to be designed for the long term and not short-lived.
For sustainability, we need to take these three things into careful consideration. Most transformations fail or are short-lived because these three things were neglected or not taken seriously.
- Inside-out approach
In order to transform your company, you first need to transform your people. We don’t mean compliant transformation. Compliant transformation means that people ‘transform’ for the sake of compliance. It’s temporary and superficial.
Transformation must make the drop from the head to the heart. It starts with logic but makes its way to our emotions. If the transformation program does not make that drop then it’s simply compliant and not sustainable. It will be just another fad that executives are trying to implement.
Transformation workshops need to be designed to transform lives. Transformed lives sustain transformed organizations. This is what we (Vanguard Center for Leadership) are good at.
This is the classic ‘walk-the-talk’. We cannot have our leadership talk about transformation and yet do not embody it. Transformation workshops need to start from the top. I had luxury supermarket client before that reached out to me for guidance on an interesting topic. The French CEO said that his company was good at creating strategies and plans. However, execution was another thing. They were terrible at it. Plans would get delayed, project managers would get lost in the handover, project costs would sky-rocket. The CEO needed a simple Project Management/Change Management and PSDM (Problem Solving and Decision Making) program. We provided them a template driven and simple Effective Execution program we used in a large Middle East Bank I used to work for.
As a good leader, the CEO got himself and his first level executives trained in the program. This is clearly ‘walking the talk’. He then set-up a Projects Office (as per our guidance) to make sure that all projects followed the process and their progress is reviewed on a regular basis. All his store management team where then trained on the same program he attended. This way, they talk the same language. Two years later and with another CEO sitting at the helm, the company is still using the methodology and the governance is still in place.
- Culture integration
You cannot have your transformation program going in one direction and yet sustaining a culture moving in another direction. Transformation programs must be designed to change culture. I remember a great British Manager saying ‘culture is what you allow to grow.’ It is people that defined the culture of a company. To be more specific, it’s the leaders and how they behave that molds a company’s culture. This is the very reason why we need to have a top-down approach. This is the reason we need an inside-out approach.
There are other things to consider in a successful transformation. For instance, we did not tackle the need to reflect the transformational goals in the performance management system of a company. Aligning transformational goals from top-to-bottom is essential. We also did not tackle the identification of the vital few measures to help us keep track of progress. What measures matter and how should we quantify them. For instance, improving customer complaints by 70% does not really make much sense. It would be better to say ‘reducing the average monthly customer complaint from an average of 700 to less than 20.’
Each transformation journey will be unique. Let’s begin it with the 7 tips and you will be off to a better start with your transformation program. Transformation is never easy; however, we hope that the tips will make it an easier journey for you.
Feel free to reach out if there is any topic in transformation you want us to cover.