Key factors for business transformation success
Given the rapidly changing competitive landscape, it’s not surprising that transformation is a top priority for organizations. Extensive research by John Kotter, Professor of Leadership, at Harvard Business School, highlights that most business transformation efforts fail.
Leading change requires deliberate planning, management and execution to gain buy in at all levels, from the front-line, through to management and executives.
Companies that successfully transform pay attention to a number of key factors.
Read this blog post if you’re struggling to get executive buy in so you can transform your business.
Lead from the top to secure executive buy in for change
Given the complexity and significant change management that business transformation requires, failing to secure executive buy in is one of the biggest challenges. Like any major change, buy in must first be gained at the top if it has any hope of succeeding. Convincing key decision makers to dismantle the status quo (particularly when it’s working reasonably well) is of the utmost importance, given research shows that a lack of active and visible executive sponsorship is the #1 reason why change efforts fail.
A clear measure of success for executive buy in is when senior leaders role model the behaviours required to support the change, and choose to make strong individual contributions to transformation initiatives. When they set the example for what ‘good’ looks like in the future, senior leaders will follow.
Create a compelling need for change – a strong business case alone won’t cut it
People are unlikely to move out of their comfort zone unless they fully understand the ‘why’ for the change. They will want to know what’s in it for them, what benefits the change will deliver for the business, and what exactly they need to do differently.
Senior executives are unlikely to budge if they are not convinced of the benefits that transformation will bring. Providing a solid business case, backed by research, is a minimum requirement for executive buy in and support. Project benefits must be clearly articulated for all key stakeholders, including current and future customers.
Delivering a clear message around the need for change, and outlining costs of doing nothing for the organization, will also help secure executive buy in. It’s important to bring a healthy dose of emotional intelligence and political sensitivity to the executive table, given that the changes may well have a direct impact on executives’ egos and the “turf” they control. A strong business case and accomplished diplomacy is called for when advising the managing director to consider changing a leadership style that has served them perfectly well in their career trajectory.
Certain contextual factors and market insights influencing the need for change should also be well articulated in the business case. Anticipate and address any significant concerns executives might have. And given executives thrive in a high performing environment, outlining the criticality of the change to sustain effective performance of the company will often get them over the line.
HR professionals also have a role to play here, and can work with senior executives to align senior leaders around urgency and need for change. A key starting point is to develop a clear message around the why and outline the discrepancy between the current and the desired future state. This will help to frame expectations of senior managers as they lead their teams through change, and help to boost adoption rates as the change journey progresses.
Don’t throw the baby out with the bath water
It’s very easy to paint the past as wrong and the future as right when implementing organizational change. This will only serve to derail the change process. When selling the change to executives, leaders, management and employees, it’s important to honour the past, and take great care in preserving what has made the company great up to this point. Doing so enhances credibility of the change process and will help gain executive buy in.
It’s also important to consider the company’s track record in managing organizational change. Gather knowledge and insights around lessons learned. Find out what has worked for the company in the past and what hasn’t and make sure to consider this as the change management plan is developed.
Create a clear vision of the future
People are unlikely to buy in unless they have had some input into the future. Putting a change management process in place where key stakeholders and decision-makers are able to define what the future will look like is an important step. It’s also important that leaders and employees have input. Buy in will only happen if those impacted have had an opportunity to shape the future and co-create the plan to get there.
Have a clear change management and project plan, and agree on how to measure success
Companies that successfully transform, integrate a structured change management approach with robust project planning. Effective change management happens when there is a clear plan in place, with target initiatives, milestones and clear descriptions of the required deliverables. Clear measures of success should be in place to measure progress along the way. These could include adoption rates, or improved satisfaction rates from customers. Employees should also be more engaged and receptive to the change.
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Integrate the transformation plan with other strategic plans and initiatives
It’s important that the change management plan does not sit in isolation from other strategic projects that are happening across the organization. Often there are other major pieces of change happening, like building innovation capability or improving the safety performance of the company. Often these pieces of work are also an important part of the transformation puzzle, but are often managed as separate and independent pieces of work – and an opportunity to bolster the transformation is lost.
Identify key projects that are happening across the business and the associated stakeholders and make a point of bringing them together to discuss the transformation plan. Consider business as usual too. This will give the organization a real sense of the overall magnitude of change that is being planned and determine how best to implement it.
Resource the plan
Having the right leaders and enough of the right people working on the transformation is fundamental to success. Transformation projects offer a fantastic opportunity to fast-track talent, provided they have the right support from executive leadership.
Not only that, but make sure that executives are prepared to spend the time on the transformation. They need to make themselves available to answer questions that management and employees have. The company needs to feel confident that the transformation agenda has executive buy in and that a solid change management plan is in place to support employees as they go through the transition.
Create the space for both head and heart communication and feedback
Too often, there is a focus on the rational side of change. Slick, formal presentations outline the project benefits, confirm the business case, and go to great lengths to include the facts and figures, the business risks and issues associated with the change. An army of analysts work tirelessly to build a solid business case, which forms the basis for the change narrative.
But for change to succeed, people must be emotionally engaged too. They must feel that they are signing up to make something better, something that will make a meaningful contribution beyond the business itself. And they need to feel confident that they are playing a role.
Make sure too, that employees are given the necessary support as they experience the emotional roller coaster that transformations inevitably catalyse. Give them the space and support to share their concerns and ensure that there are timely and effective channels to answer questions concerning the change. The more they are able to share their ideas, insights, and worries, the more likely they will buy in to the change.
Executives play a key role in communication. They need to be accessible and visible. Focusing on making interpersonal connections during this tricky time is a significant factor for success.
Don’t forget about middle management
While much attention has been placed on how to bring executives along, research shows that middle management is key to effective change . Yet this is a group that is often under utilised and unrecognised, but so important to gaining buy in from employees.
The research shows that when middle managers initiate change, employees are more committed to the change. This is largely due to the fact that middle management is much closer to the workforce, and more likely to know what the workforce will support or what they will resist. This does not mean that executives are off the hook. Their role will be to champion the change and be actively involved in executing it.
In her article entitled “The real value of middle managers” (Harvard Business Review, June 07, 2021), Zahir Jaser notes that “as hierarchies within companies become more fluid and virtual, middle managers will increasingly become channels for relationships, influence, and connection”. Middle managers build relationships with those at the top and with the people at the bottom and can be the deal breakers when it comes to transformation. Getting their buy in is crucial.
Focus on accountability and execution
Once a change management and project plan is in place, executive leadership must be committed to making it happen. A robust governance structure, with clear roles and responsibilities must be in place. Equally, the decision-making process must be discussed and agreed to by executives. And executives must be prepared to have the tough conversations with one another and with their teams. Too often, decisions are unpicked because executives are not aligned, or milestones slip because of a lack of timely and robust challenge.
The executive leadership team must focus on what effective performance looks like at a team level in the context of the transformation. What behaviours will be key to meeting objectives of the transformation? How will the team work together to ensure success? And how will the executives set the example and tone for the rest of the organization?
Equip leaders and employees with the knowledge, skills and competencies to succeed
It’s not enough to build an understanding of the change, why it’s necessary and what the future will look like. Buy in will only succeed, if people know how to lead and “do” the change. Provide the appropriate knowledge, coaching, mentoring, training and support to help employees cope with the change and also work effectively in the transformed organization. Too often, this support diminishes once the transformation project is delivered, but it’s important to sustain some level to ensure that the business benefits are realised and employees have built new habits, and new ways of thinking and doing.
It’s often assumed that executives have the necessary knowledge of how to lead change, but they too require support. And even when they have all the knowledge at their disposal, it’s still not a guarantee of success. Provide them with practical actions they can do on a regular basis to role model the change.
Customers should be at the forefront of transformation
Customers are not just the remit of the sales team. They should be the catalyst for the transformation.
Additionally, the change management approach needs to recognise that as the organization changes, so too will its customers. It’s important that the organisation ensures that it continues to align to and anticipate their changing needs.
Effective change management focuses on building critical mass in the organization
Critical mass is fundamental to sustaining the change. It means that there has to be a sufficient number of people that are behaving or thinking in the new way for the change to become self-sustaining. Behavioural and epidemiological studies show that the tipping point for critical mass is 30% of a population. When this stage is reached, change feels inevitable. There are enough people to support and encourage each other to adopt the new ways of working, thinking and behaving. Additionally, these 30% have close connections with the remaining 70%.
It could also be argued that the types of people and leaders who make up the 30% is also an important factor. This cohort should ideally have high levels of emotional intelligence, demonstrated by the ability to forge positive interpersonal connections and maintain high levels of emotional regulation under pressure.
Building this critical mass should happen early and quickly. Identify the key influencers at all levels. Pay particular attention to middle managers given the role they play in effective change management. Too often, organizations neglect the important change management role the general manager plays.
Focus on workplace culture
It’s important to consider company culture as the business implements its transformation agenda. Transformation efforts often fail because they are not sustained or reinforced by the culture of the business. Executives are often swayed by the business benefits that a digital transformation will deliver for example, but are often disappointed when it does not eventuate. This is often because the introduction of technology invariably requires changes in ways of working. Different behaviours and mind-sets are needed, and if this is not addressed through culture, the change has little chance of succeeding.
Sustain momentum by celebrating, and rewarding and recognising success – both informally and informally. Celebrate meeting objectives at every possible opportunity. Identify quick wins and commit to applying thoughtful fixes, fixes that will immediately reduce key pain points, but won’t jeopardise the longer term objectives of the transformation.
Executives thrive when calling out the success of the organization, so give them a clear job to do here. Get them in front of management to talk about wins and how they are actively working to address key issues. Make sure that progress and wins are regularly communicated, through a range of channels. And even when there is little to communicate, don’t maintain radio silence. Repeat key messages and feel good stories, offer updates about the competitive landscape and how the organisation is responding. In the absence of communication, people will fill the void. This is where organisational rumours and unhelpful myths are created.
Capture knowledge and insights
All change management efforts should begin with research. Understanding what made prior change initiatives successful, what worked and what did not is an important starting point. And so it makes sense that all change management efforts should capture lessons, insights, and knowledge gained along the way. This will not only benefit the particular change project, it will also enable future change management programmes to hit the ground running.
Key lessons learned and recommendations of what to do differently in the future, should inform any business case and could offer important clues as to how to bring executives along the journey.
Successful transformation is not for the fainthearted. It requires courage and tenacity. Companies that get it right do change management well. Not the ‘tick the boxes’, follow the process kind of change management. These companies apply a deliberate and carefully planned change management approach that starts with gaining executive buy in and support of key decision makers, and then relentlessly goes about capturing both hearts and minds.
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