Transformation: The human side
Accepting to change is the first step to improve performance.
Today, I will focus more on the human part of the transformation and how staff live this experience. So whether you are expecting a deep change in your organization or already living one, you should find the following lines very inspiring.
To describe the business transformation experience, I identified four distinct moments.
1. Building a consensus around the necessity to transform, including target vision and goals, strategy, required budget, roadmap, etc.
I have already reviewed the five main triggers that launch a transformation program and provided recommendations regarding the degree of emergency for each trigger. Nevertheless, building a consensus around the necessity to transform the organization can take a long time. Several factors can make decision-makers agree faster to transform their organization:
power concentrated in the hands of one or very few decision-makers
existing conflicts between board members and shareholders
mature organization regularly updating its strategy and driven by data
underperformance reaching critical levels
acceleration of how core market is changing
Clearly, a family business led by the founder would reach consensus faster than a large international organization with multiple shareholders and decision-makers. However, because of factors 3. advanced maturity and 4. higher pressure from shareholders, decisions can be made very fast at large publicly listed companies.
What is true across all types of organizations is that decision-makers tend to influence the target vision to suit their own interests; hence long negotiations may be needed to reach a consensus between all decision-makers.
I want to draw attention to the importance of the methodology used to reach consensus. I recommend backing all decisions by prior analysis, proposing several options to choose from, and documenting all meetings to archive decisions. By doing so, the obstacles preventing a final agreement will fall, one by one.
It is important for the success of a transformation program to reach a wide consensus and get the buy-in of all members of the leadership team, including the target vision, quantitative goals, and strategy. (Please read our previous publication for more information.)
It is worth mentioning that during this phase, there are always leaks that lead to the spread of rumors, particularly when the reason behind launching the transformation is obvious for everyone, such as the arrival of new management, critical underperformance, or a recent M&A transaction. Rumors are like poison to any transformation, and it is better to adopt transparent communication and accelerate the decision to transform.
2. Launching the transformation program creates both enthusiasm and skepticism
After endless negotiations and analysis, the transformation is finally happening. Yay!
Starting the implementation phase is an important milestone. The transformation is becoming tangible and impacting a growing number of people. You will find some people very enthusiastic, because they genuinely believe that the transformation of their organization will answer their change expectations. But others will be skeptical; they worry about the negative impact of the transformation, such as losing some of their benefits and power, or even worse being fired.
The skeptical group usually don’t show any signs of resistance at the beginning. They wait for the right timing when enough information is gathered and arguments against the change are prepared.
Needless to say, growth transformations face less skepticism than restructuring programs, but there will always be a group of people that will oppose an expansionary strategy, arguing that it will waste resources.
So, despite some skepticism, the general mood is rather optimistic. Employees generally support the transformation and are ready to make the extra effort to make it happen. Diverse talents are called to form the “transformation team”. They spend long hours to coordinate with operational experts to achieve the desired change.
Sadly, this period doesn’t last forever. Once implementation difficulties start to pile up, the initial enthusiasm begins to fade away. Did we mention that transformation requires a lot of extra effort to achieve?
3. A drop is inevitable but can be limited
Things will start to go wrong, and there will be an observed drop in performance compared to the kick-off. Management needs to understand that this period is unavoidable, but its negative effects can be limited.
Two main reasons are behind this drop in performance. The first is due to the change brought by the transformation, such as change in processes, systems, and organizational structures. Transformation brings many important and small modifications that affect the daily work of staff. To absorb all this change, staff will go through a period of underperformance until they get used to the new way of doing things.
Of course, skeptical voices will rise and become more audible. They will start questioning the necessity of transforming the organization by building arguments based on the observed underperformance. Their objective is to bury the transformation. The transformation team needs to contain these skeptical voices by achieving early results called "quick wins". Achieving quick wins restores the trust in the transformation and counters the arguments of skeptical voices.
Change management remains the most efficient method to counter underperformance. It is a mix of actions that include training sessions, formal and informal communication, documentation, and many other actions to help staff accept and absorb the load of change.
The second reason for underperformance is underestimating the required effort to transform. As mentioned earlier, the enthusiasm that generally accompanies the kick-off will start to fade away and make room for mixed feelings of exhaustion and frustration. The extra load of meetings and work to be done adds up to operational responsibilities that don’t just disappear. The operational teams will be tired and start to blame the ongoing transformation. To limit these side-effects, the transformation team needs to make meetings more efficient and limit the solicitation of operational teams. The planning of workstream actions needs to be adapted to best suit operational constraints. In short, the transformation team needs to crunch the work of the operational team, even if it means extra-long working hours.
Individually, what can you do to fight the drop in performance? It’s just like running a marathon, you don’t just stop because you are feeling tired. If you feel that too much effort is spent for so little change, just look backward and you will be surprised by the achieved positive results.
4. Topping-Off is the opportunity to reward teams
Though the best transformation programs are those that implement a culture of permanent change, crossing the finish line of important milestones is important for many reasons:
confirming that workstreams reached initial objectives and adjusting deliverables if necessary
acting the transfer of responsibility from the transformation program to operational teams
celebrating, of course, is a timely reward for teams for their extra effort during the transformation
Each time an important milestone is achieved, I strongly recommend that leadership genuinely thank all contributors for the extra workload absorbed during the transformation. It is also important to evaluate the results of the transformation and present an objective assessment of what was achieved during the program.
Who succeeds the transformation?
“It is not the strongest of the species that survives, nor the most intelligent; it is the one most adaptable to change.” Charles Darwin
It’s true for transformation. Those who want to get promoted, need to adapt to the new culture and become active change agents.
What is great about transformations is that they offer many promotions' opportunities for those well positioned to seize them. Many executives often jump ship because of uncertainty or conflicts, which creates opportunities to promote many people.
Who is most likely to get promoted?
The one offering a helping hand to leadership and transformation team on top of daily tasks, particularly during the period where performance is declining and skeptics are loud. It’s also the one who provides constructive feedback instead of constant complaints, and the one who quickly grasps new responsibilities and learns the new way of doing things. Of course, there will always be people counting entirely on internal politics to get promoted, but in my experience this kind of promotions is fragile and doesn't necessarily last long.
The transformation of an organization may scare some because of the level of uncertainty it brings, but at the end it is a very rich and rewarding experience for those who were involved and willing to embrace change.
The challenge remains tough and up to seventy percent of transformations fail. Many reasons lie behind this high failure rate, and in my next publication, I will present these reasons and my recipes for avoiding them.