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7 guiding principles to transform your organisation

Based on my keynote at the 6th StratComm Asia Summit in December 2020

There is hardly an organisation that isn’t currently involved in a transformational effort of some sorts. At the time of this writing, COVID-19, I can comfortably say that this is a quasi certainty!

And yes, transformation is tough, whether it is in reaction to an external event or as part of a self-initiated transformational programme to boost performance or competitiveness. Tough to a point where a whopping 70% of transformation projects either fail or don’t deliver on their original ambition. Worse yet, the larger the business, the higher the rate of failure.

There are many reasons for this, the following are the top six why such efforts consistently yield underwhelming outcomes *:

1. Cultural Attitudes
2. Insufficient or poorly managed resources
3. Insufficient agility
4. External developments
5. Strategy not understood/poorly communicated
6. Poor coordination across the organisation

*) Source: Economist Intelligence Unit, Closing the Gap: Designing and Delivering a Strategy that Works, 2017.

Why culture matters

The above lists culture as the #1 reason for failure, most likely because it is an often neglected aspect of transformation. After all, in the words of the legendary Peter Drucker, “culture eats strategy for breakfast”!

At the risk of oversimplifying, corporate culture is the collective soul of an organisation and provides the foundation for a company’s key asset: its reputation. And while there are many different variations for the definition of company culture, culture is, by and large, shaped by the tone at the top and leadership by example.

But culture is also shaped by an environment that enables meaningful interactions between the people of your organisation — a big chunk of the culture-shaping effort, therefore, doesn’t merely depend on the good-will of leaders. And while a vast majority of senior leaders fully acknowledge the importance of culture towards business success, it is still viewed as a quasi-mystical and invisible force, recognised mostly when we see or experience it. Culture binds people of an organisation together around beliefs, values and behaviors to enable a company’s purpose. Culture, therefore, is more challenging to read, understand, engineer and leverage than other, more tangible instruments used to run a company (such as financial statements, processes or an IT).

There is one certainty though, culture manifests itself very clearly when its failure leads to a crisis or unnecessarily amplifies a crisis, but also when transformation projects fail or underdeliver.

Transformation ≠ Change

Transformation and change are not interchangeable terms. Why? Because in order for organisations to transform, changes in the mindset and behaviours of your people are needed to ensure transformation sticks and delivers on its intended objectives.

Also, there is a lot of talk about how change is permanent and the subsequent change fatigue that sets in. While they are both real, they can be avoided. The dynamics of change are of a more iterative nature because they are implemented as separate projects and may, therefore, cause confusion due to conflicting priorities, a lack of a transformational vision or context (“why am I being asked to change”).

Transformation, on the other hand, is more fluid and has the advantage of providing a broader framework for change with an aspiring vision for a goal and the changes needed along the journey. That’s why transformation is best presented as a journey rather than a series of iterative changes. Setting an ambitious transformational goal provides the contextual framework for change objectives and individual work packages to run in a coordinated manner towards a common goal. People will understand and feel why, how and, most importantly, what is expected of them.

Transformation, therefore, is as much an art as it is a science. Below I’ve listed several key aspects one ought to consider when embarking on a transformational journey.

Why people don’t get onboard

Culture isn’t everything though. Here is what employees say* are among the main reasons they struggle to embrace and engage with change at an individual level:

• We don’t understand the reasons for change
• We suffer from change fatigue due to competing priorities
• We are not involved in the change process
• We lack critical capabilities or resources to sustain the change

*) Source: PwC Katzenbach Centre

The four building blocks of change*

Reversely, people will change their mindsets and behaviours if…

1. Role Modeling: “…if we see our leaders, colleagues, and staff behave differently”
2. Fostering understanding & conviction: “…if we understand what is being asked of us and why”
3. Developing talent & skill: “…if we have the skills & opportunities to behave in the new way”
4. Reinforcing with formal mechanisms: “…if we see that our structures, processes, and systems support the changes we are being asked to make”

*) Source: McKinsey Quarterly, 2016

Bringing it all together, here are my seven guidelines for successful transformation

1. Create a continuous transformation mindset: it’s a journey. Ensure you create a framework that connects with your business strategy and that provides clear goals and objectives that people feel they can relate to and engage with.
2. Change the behaviours: …and mindsets will follow. Behaviours are the building blocks of your company culture.
3. Context: message adoption is all about contextualisation, so start with the WHY
4. Evolution, not a revolution: show how the change relates to previous objectives, avoid ‘breaking’ with the past.
5. One company culture: your change story is global, but delivered locally. Stick to your change story and consider using the 80/20 rule (20% of your story can be localised)
6. Consistency: your change story needs to be consistent for both internal & external stakeholders
7. Inclusive: leading change from both top-down & bottom-up supports adoption.