Key customers’ needs develop over time and any successful business leader has no other choice but to adapt and execute adequate transformational change in the company. With the exception of the transformation generators (usually the top management) people will resist the change which makes the transformation process harder.
What is successful transformation?
In this post “successful transformation” is defined as both: improved company performance and built-in processes for continuous improvements.
Latest McKinsey research on 1713 companies reveals that only 26% of respondents say their firms’ transformations succeed (exhibit 1). In their 2012 survey 20% of executives said the same. In other words it is really hard to achieve successful transformation. But some have beaten the odds. The four business leaders’ keys to transformation success are: focus on people, leading by example, continuous communication, and taking more and well-coordinated actions.
Focus on people
Business transformations are about both: people and process. However, long-term transformation sustainability requires organizations to sell the change to their employees. How? By individually motivating them, equipping them with the necessary skills, holding them accountable, allowing them to dare to experiment, to make mistakes, and prizing them on every small success. The ultimate goal is to help people embrace the uncertainty that lies in change, as continuous change is inevitable in the XXI century.
Leading by example
Leadership matters. It must not be delegated to a transformation project manager, while executives carry on with business as usual. Business leaders must live the transformation. Leaders must role model the behavior changes they are asking employees to make. It is suggested that during transformation period business leaders should spend as much as 40-50% of their time in the front lines, demonstrating the new behavior. A single business leaders’ act that speak “changes apply to employees only, not to me” ruins the chances for a successful transformation.
The two most powerful instruments when leading people through a change are role modeling and communication. Employees need to be continually told an engaging, tailored story about the ongoing transformation, about its implications, about the present stage, the difficulties and the progress, achieved so far. The continuous communication serves two major purposes: to ensure the transformation is top of mind across the organization and to reduce the gap between employees’ expectations and what they see (most likely, none of them is seeing the whole picture).
Taking more and well-coordinated actions
Transformation is hard work. Yet, the company must sustain the changes to keep improving. You will notice, on the abscissa, exhibit 1, that there are 24 common actions taken during organizational transformation (will write another post about them). Some of the actions have more impact than others on transformation’s outcome and their impact vary from company to company. What is important is that these actions should be pursued together. McKinsey research suggests that the more actions a firm took to support transformation, the more successful it was at improving performance and sustaining long-term health.
Another interesting statistics from the research is that among the companies that have properly used the four keys to a transformation success 79% have achieved it (exhibit 1). In order words it is worth investing in mastering the four keys implementation. The line of thoughts in the post is totally applicable for a transformational change in a single department of an organization.