With estimates of successful transformations still hovering around the 30% mark, it is essential for any C-suite member considering sponsoring one to consider exactly what needs to be done to increase the chances of success.

In this article, Alex Atkins, Associate Director, Cross 8 Limited provides essential steps and strategies to increase the success rate of transformation initiatives.

Before we discuss how to increase your chance of ending up in the successful 30% then, the obvious question:

What counts as a Transformation?

There’s no one definitive answer to this, and you’ll hear people use the word transformation to describe just about any large change but at Cross 8 we consider something a Transformation when it:

    • Is enterprise wide, or at the very least, covers a whole business unit.
    • Involves a step change in performance or operating model – or as we’ll see, more likely both.

A Transformation isn’t just a big project, it’s a rewiring of what your company stands for and / or how you deliver it. It’s not about incremental change or the introduction of a single new function, however large it might be. Instead, it’s targeted with fundamentally shifting your systems, processes, and people, so as you’d expect there are some specific things you need to look for to help make it a success.

 

1. ASSESS THE CURRENT STATE

Get a crystal clear picture of the organization as it is… and how you want it to be.

When delivering smaller scale changes, it’s sometimes possible to start from a clean piece of paper. There can be value in designing without the constraints of current solutions in mind.

That simply isn’t the case in Transformational change.

Yes, some “blue sky thinking”, to use an old-fashioned phrase, is good when you’re setting the goal, but to successfully transform a company which has substantial day to day operations, it is absolutely essential to get a realistic and accurate view of where you are right now.

It might feel frustrating to spend time describing the current state, but it will pay dividends in the long run. You don’t need to devote your whole team to doing it, it should be done at an early discovery phase before you have ramped up the team to any large degree so run costs should be manageable. And there’s no need to reinvent the wheel, look to use existing assets wherever possible. But unless you want to join the 70% of Transformations that don’t succeed, avoid the temptation to skip this step.

 

2. BALANCE AMBITION 

THINK BIG… THEN BREAK IT DOWN SMALL. IT MIGHT SEEM COUNTERINTUITIVE BUT WHEN IT COMES TO TRANSFORMATIONS THINKING BIGGER IS AN INDICATOR OF SUCCESS.

Research by McKinsey[1] has shown that cross functional transformations outperform those confined to single functions by between 30 and 40 percent. 

It’s not clear what all the reasons for this are yet, but a recognition of the scale of change that you’re on is definitely part of it. As is the fact that operating on the business as a whole gives you opportunities to unlock value across traditional boundaries. 

Think big. Don’t suffer from lack of ambition.

We can all call to mind examples of companies who went out of business because they didn’t transform quickly enough, or radically enough, to keep up with a changing environment. It’s much harder to think of a company that failed because it was too ambitious with its transformation.

However, remember the old joke about eating an elephant… you need to do it one bite at a time. 

So, once you’ve got a clear, well defined and ambitious goal, break it down into specific deliverables along the way

These aren’t necessarily break points (though don’t be afraid to use them as that if it’s the right call), instead they should be check points for benefits realization. You’ll use them as the main measurement points to track progress against, providing interim indicators of success or failure. And you should take the chance to celebrate the successes. It will help keep momentum on what will probably be a long journey.

 

3. HARNESS EMBEDDED INTELLIGENCE

If your Transformation is affecting all levels of the company (and if it’s truly a Transformation then it will be) then you should be tapping into the embedded intelligence that exists today in each of those levels.

Whether it’s achieved by having a Chief Transformation Officer, a board level sponsor, or a Board -1 leader with direct communication to the CEO, transformational change should always be on the radar of the Board. But that isn’t enough.

Boston Consulting Group [2] were able to quantify the impact of putting employees at the heart of Transformations: their survey showed a 70% improvement in success rate for companies who reported involving frontline staff.

And don’t forget middle management: this group often contains the leaders of the future who could well be the people you want to help drive through your change. Transformations are a great chance to test out the best and brightest on your succession plans. Conversely, by the nature of their position in the organization good or bad middle managers can both have a disproportionate “drag” effect if you don’t get their buy-in early in the process.

If your transformation is affecting all levels of the company, then you should be tapping into the embedded intelligence that exists today in each of those levels.

4. shift the mindset 

At Cross 8 we continually stress the importance of thinking about behavioural change when implementing any change, but in Transformations you need to plan more proactively for the mindset shift that you want to introduce.

When you do your initial goal setting, look for both good and bad examples of cultural practices and mindsets in the current organization.

The point of looking for things you want to change is obvious, but by identifying internal pockets of excellence that embody characteristics you want to spread across the organization, you will make communicating and moving your people to the new mindset that much easier. It gives you a chance to celebrate parts of the company and prevents it looking as though you are talking down the existing operation. Your people do not want to hear that everything about the current business is bad.

The most effective change stories include both positive and negative aspects.

This is also the time to plan how the Transformation will be sustained after delivery. Some interventions are clearly one way, once you’ve implemented a new digital platform, for example, then there’s no way a member of staff can simply decide to go back.

But cultural shifts aren’t like that. If you want the Transformation to have a lasting impact then you need to design to make sure it sticks.

Don’t simply trust to chance, or what seems to you as the self-evident fact that the new way is better. The old way evolved for a reason and if you don’t take steps to prevent it, you could very well find that things drift back. 

When designing the new organization plan for self-reinforcing controls such as aligning bonuses to how things are done as well as what is done.

ONE FINAL POINT

What’s the best delivery method or control framework to use?

Finally, one thing to note is something we’ve not included here: a structure or method that all successful Transformations must follow.

Operating in a large company will inevitably mean certain organizational structures are more likely: you’ll probably have a programme office in place that measures progress and reports to the Board but maybe you measure progress more locally; perhaps you’ll implement through a traditional model or have moved to an agile framework of one kind or another.

Truth be told, that isn’t what will make the difference between success and failure. Providing you have the essential elements of measurement, visibility and control in place, there’s no real evidence that one methodology leads to greater success rates in Transformations than another.

Apply the principles above to your Transformation and use a control structure that fits the particular aspects of your organization and the change itself, and you will have greatly increased the chance of being able to count yourself amongst the successful 30% next time you are surveyed.

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