Four principles for leading company-wide transformation

We love change – as long as the change is made by others and we don’t have to change ourselves.

Ask an audience the following questions: “Who believes change is inevitable?” and “Should people see change as something positive?” and most of them will likely raise their hands to affirm both questions.

But ask them, “Who is comfortable about changing their own way of doing things? Who has their preferred side of the bed but is okay to change sides at times? Who is fine about changing plans after they’ve made them?” and you’ll get a different reaction. Most likely, the audience will go quiet and you will see only a few hands go up.

Change or transformational programmes often fail to reach their targets. They don’t meet their deadlines. They aren’t far-reaching enough. There can be many factors behind this failure, ranging from not supplying realistic targets to not having the right sponsorship or the right processes for the change. But the number one reason why change fails is organisational resistance. In other words: people. Avoiding taking action often seems like the safer thing to do.

So why do people disrupt transformation efforts? John P Kotter, Professor of Leadership, Emeritus at Harvard Business School and one of the earlier thinkers in the field of change management, looked at successful and unsuccessful change programmes and came back with the following eight factors for failure:

• Not establishing a great enough sense of urgency
• Not creating a powerful-enough guiding coalition
• Lacking a vision
• Under-communicating the vision
• Not removing obstacles to the new vision
• Not systematically planning for and creating short-term wins
• Declaring victory too soon
• Not anchoring changes in the corporation’s culture

These failure factors offer a great way to understand best practices, and can be translated inversely into an eight-step process of change (i.e. “Establish a sense of urgency,” “Create a powerful guiding coalition,” etc.). Many of these points are used consistently in change programs, such as “Look for quick wins” and “Have a well-communicated vision.”

In his later work, “Accelerate: Building Strategic Agility for a Faster Moving World,” Kotter expanded upon this eight-step model, for as he says, “The 21st century will force us all to evolve toward a fundamentally new form of organisation.”

To properly align the model to today’s demanding and competitive business environment, he made four key revisions:

• Run the steps concurrently and continuously, rather than sequentially
• Form a large volunteer army from up, down and across the organisation to serve as the change engine, rather than just driving change with a small, powerful core group
• Function in a network flexibly and agilely outside of, but in conjunction with, a traditional hierarchy, rather than strictly within the hierarchy
• Operate as if strategy is a dynamic force by constantly seeking opportunities, identifying initiatives to capitalise on them and completing them quickly and efficiently, rather than focusing on doing one new thing well in a linear fashion over time

The business world today is vastly different from 20 years ago. Change is now constant and we need to think of the change process no longer as just a question of project management and communication, but rather a leadership issue that requires a deep shift in mindset.

This viewpoint is very much in line with what other practitioners are saying about successful transformations. Boston Consulting Group describes a new type of transformational leadership that sits at the intersection of being a directive leader (someone who defines the vision and strategic priorities, sets the goals and knows the way ahead) and being a leader who can delegate execution to other stakeholders and have an inclusive leadership approach (mobilising and empowering the teams and actively seeking feedback).

McKinsey, on the other hand, has an influence model that speaks of four building blocks of change. This model says that if change is to happen in an organisation, it will be a combination of the leaders being role models, the people having a clear understanding of and alignment to the change – as well as the capabilities to act on it – and the organisation having the systems and processes to make this happen.

While these models vary in terms of specifics, the practitioners and experts agree on the following:

• The need for great communication to ensure the sense of urgency as well as the vision ahead
• The need for leaders to be more involved in change efforts and act as role models for the rest of the organisation
• The need for systems/processes to ensure the change is transformed into a habit

In our experience, there are four principles that require attention. If these are not managed correctly, they give rise to deeper issues that impede success in even the best-performing organisations:

• Communication that becomes more of an advertising campaign with unidirectional messaging targeted to the “what” and “how” rather than the “why” behind the change
• Leaders who are seen as “false sponsors” because their attention is divided and their interest wavers
• Progress that rarely is measured formally, and when it is, looks only at lagging indicators
• A continuous launch of change initiatives and priorities that weigh down the organisation and make focus impossible

Below are ways we have found to combat such situations and improve the odds of success.

Principle one: engaging communication

What usually happens
Communication becomes more of an advertising campaign with unidirectional messaging targeted to the “what” and “how” rather than the “why” behind the change

Why it happens
One-way communication – the recipients of the information are left alone to interpret it for themselves (so the same information can be seen in different ways by different people, depending on their previous experiences, current mindset, etc). Additionally, attention spans vary so greatly from person to person that a large percentage of the communication may be lost. Communication focuses solely on the “what is next” and the “what to do”, which means that recipients are not guided through the “why” of the change. Thus, a sense of urgency is not created, and people are less open to and motivated by the “what to do next.”

How to do it better
The way to ensure engagement and alignment is to work through an interactive communication tool. Participants can use discovery-based methodologies in a structured way to reach conclusions themselves as to why the change needs to happen, and what they need to do to make it happen. These tools have to be company- and moment-specific and must be leader-led to ensure the right conversations are taking place. Such tools, like engage maps, are structured around the three themes of “Why the change”, “What is the new framework / model and what does it mean for us”, and “How will we get from where we are to the new desired state.”

Principle two: true leadership

What usually happens
Leaders who are seen as “false sponsors” because their attention is divided and their interest wavers

Why it happens
In many changes and transformations, leaders focus on “business as usual” and delegate the change process to departments like HR or IT, or to external consultants. This produces a disconnect. In addition, leaders are often not aligned to the changes themselves and, therefore, when their teams face issues or questions, their responses and actions are contradictory to the change.

How to do it better
It is key that leaders be seen as role models. In order to do that, they must be the first ones to align to the change and, therefore, be the first ones trained on tools such as engage maps. They also need to take ownership of the change for their people.

Principle three: the need for measurement and monitoring

What usually happens
Progress that rarely is measured formally, and when it is, looks only at lagging indicators

Why it happens
Many transformation and change efforts focus on the very end indicators (such as percentage of new digital clients in the bank), which become lagging indicators (only measured after it happens). Sometimes these types of measurement make it difficult to show the impact of the transformation process.

How to do it better
It is important to be able to track both result-oriented indicators as well as activity indicators, as they can reveal a leading effect. These leading indicators can also identify the barriers to transformation and give us “heat maps” as to where the positive action is happening.

Principle four: the essence of focus

What usually happens
A continuous launch of change initiatives and priorities that weigh down the organisation and make focus impossible

Why it happens
Change fatigue is a common issue in organisations: “This year’s change initiative is ….” tends to be a joke for employees. The complexity of the tools and models of an organisation can make it difficult for employees to know what is expected from them.

How to do it better
Limit transformational actions to the ones that are crucial and require the employees’ full attention. Link these actions to the rest of the changes in the organisation, such as compensation system changes, reporting shifts and organisational moves.

It’s worth investing the time and resoures in a change management people process that looks at these four principles and implements ways to ensure the right impact. As an old African proverb states, “Tomorrow belongs to the people who prepare for it today.”