Leaders must figure out how to deal with the complexity and rate of change that is both escalating. The process of guiding an organization through transition has changed from ten to twenty years ago.
Without planning and preparation, businesses fall victim to hazards that are frequently foreseen and preventable.
Avoid these pitfalls when transforming your organization:
IGNORING THE HUMAN ASPECT OF CHANGE
The majority of organizational transformations have two parts. They start with structural changes that give rise to new procedures, technologies, organizational structures, and governance arrangements. In order to ensure that employees embrace change and match their mental models and work habits to magnify and sustain the impact of change, behavioral modifications are also necessary.
Skepticism, dread, and despair frequently come before the behavioral change. Focusing excessively on structural change frequently undermines efforts to recognize and manage emotional upheaval that occurs when individuals navigate change and its implications for them.
Recently, we learned of a sizable financial firm that has made three separate attempts to become customer-centric over the past ten years but hasn’t had the anticipated results due to a chronic lack of attention to the people aspect of change. Although the organization implemented significant structural changes, it did not give individuals the tools they needed to act and conduct differently, which led to limited or nonexistent uptake of the change steering group’s recommended policies.
TECHNOLOGY THAT IS UNABLE TO FIX PROBLEMS
The issues facing businesses today are complicated, and each firm has unique requirements and conditions. Therefore, it is naive to think that a single technology or application can handle all of the difficulties that a business faces. Although it firm mergers have created all-in-one applications by combining many point solutions, few of them actually function as well as stated and still require a lot of integration and customization work. Therefore, whether you select a best-of-breed strategy or an all-in-one solution, the onus is on you to make sure that the solutions offered by your technology vendors truly cooperate to address the issues facing your company.
In 2018, McKinsey discovered that traditional industries like oil and gas, automotive, infrastructure, and pharmaceuticals had a success rate for digital transformations that was less than 11%. The successful transformations, however, shared a common trait: however, the organizations that underwent successful transformations all used more technologies than those that didn’t. If transformation advantages are to be realized, numerous sophisticated solutions are necessary, which may seem contradictory given that more solutions increase complexity.
USING OUTDATED METHODS TO ACHIEVE MODERN GOALS
Because organizations take too long to alter their current definitions of success and failure, the majority of transformations will fall short of reaching the promised pot of gold at the end of the rainbow. The objective in the new world is to deliver customer value better and faster than the competition while minimizing waste, accelerating innovation, embracing complexity, and decentralizing decision-making. However, the lack of KPIs that are in line with these objectives in the majority of firms might be fatal to the transformation endeavor.
We developed a new dashboard together with a brokerage company that was more concerned with facilitating faster learning and visibility into consumer insights. The dashboard, however, was never used since top-level management preferred to examine various data points that were exclusively focused on business advantages and operational metrics rather than consumer insights.
The CIO group was driving an ambitious change agenda at another multinational company with the goal of reimagining its delivery value chain for improved market responsiveness and customer-centricity. However, one of the senior leaders in charge of the majority of the technology delivery teams insisted on using the throughput per delivery sprint and the number of open software faults to measure performance rather than the amount of business value produced. This swiftly insured that most teams had no interest in analyzing or implementing the larger change being forced upon them, which was not surprising.
PUTTING MORE EFFORT TOWARDS PUSHING CHANGE RATHER THAN CREATING PULL FOR IT
What sort of structure enables captivating storytelling across the organization to accelerate change? This is one of the more intriguing issues that organizations ask when going through a change process. Most change initiatives fall short in their attempts to harness the enthusiasm of the workforce at large and make the most of it to generate the required pressure for change.
Instead, the change management office uses force and elbow grease to push down change. Again, forcing people to follow the new rules of the game and assuming the transformation would stick is a surefire recipe for disaster.
Create pull-related conditions instead. Early value demonstration, nurturing of change agents at all levels, and broad co-creation of particular practices and procedures when they believe they initiated a change, most people are not opposed to it.
According to our experience, change programs succeed when they begin to resemble a continuous development away from the status quo that was jointly established by all parties, as opposed to a carefully prepared, expansive set of policy changes that require c-suite approval before anything can be done. It is undoubtedly a difficult undertaking that slows the initial scope and pace of change, but it is ultimately much more likely to be sustained.
By replaying several hours of carefully selected customer service calls for a group of senior executives, we were able to produce captivating stories during a recent strategic engagement with a major financial services company that created an urgent trigger for change.
The management realized after hearing those calls how organizational silos developed over the previous three decades made it harder for customers to receive value. They made the decision to combine silos and form comprehensive, cross-functional teams that were centered on certain client outcomes.
EXCESSIVE RELIANCE ON A SINGLE, CENTRALIZED CHANGE MANAGEMENT OFFICE
Businesses aspire to operate and think like startups. To make that adjustment, whose job is it? Who determines the standards for the change: those closest to the customer or the centralized change management function led by change management leaders seated high up in the organization? Do top executives have enough understanding of the kind of transformation that is required for workers on the front lines? Do those working in the main change management role have the knowledge, background, and outlook required to guide and promote difficult change throughout the entire organization?
The majority of the time, “no” is the response to all of these queries. However, we notice a concerning amount of over-reliance on a change command central to implement change. To make a significant change, you need a village. A prescription for short-term noise and long-term disaster is relying solely on the centralized change management office to implement change, which is typically done through a top-down mandate. Our recommendation is to have a modest change office, but to supplement it with expanded secondary and tertiary teams, drawing on promising cross-functional talent from around the organization.
Bennett blank, a well-known product manager and thought leader at intuit, is a major proponent of the idea that in order to be a successful change agent within a large organization, one must relinquish control and put their attention on facilitation. Although difficult, moving from “me to we” is not impossible. In order to demonstrate what good looks like and to move toward speedier transformation, collaborate with knowledgeable and experienced internal and external consultants at all stages of the change process.
LOSING THE CONSUMER AS THE SHIFT IS TAKING PLACE
Interesting research was conducted by watermark consulting’s Jon Picoult to link customer centricity and top-line growth in businesses. He created two distinct portfolios using data from Forrester’s customer experience index over a five-year period and compared them to the s&p index. The top 10 publicly traded companies in the index make up one portfolio (customer experience leaders), while the bottom 10 publicly traded companies in the index make up the other portfolio (customer experience laggards). The information was astounding. The leaders in customer experience outperformed the laggards in stock performance over the course of the five years. Comparatively, the s&p 500 market index fell by 1.3%, while the experience laggard portfolio fell by 46.3%. The cumulative total return for the experience leader portfolio was +22.5%.
Customers are the final arbiter of a transformation program’s success. Your change program won’t likely be successful if the change does not have a favorable impact on customers.
Senior executives frequently become mesmerized by the transformation process, which includes the cool technology, the gleaming new physical layouts, and the enhanced processes that facilitate the flow of work throughout the firm. They frequently overlook how these adjustments are required to enhance client connections and support their success. This leads to a walled approach to change that eventually produces results that are an improvement over what was previously present, but it rarely produces an organization that is truly customer-led.
Based on our observations, we advise limiting all discussion and decision-making to the following fundamental inquiries:
- What are we discovering about the changing consumer experience?
- Do we continue to provide our customers with value as a result of this change?
- Are we making adjustments to our internal procedures to better serve our clients?
- Did we recognize and get rid of obstacles to innovation and/or better customer service?
NOT STOPPING ALONG THE CHANGE PROCESS TO CELEBRATE AND REFLECT
Change is difficult. In a large corporation, bringing about change is difficult and stressful for the teams responsible for it. In our experience, committed transformation teams often become so engrossed in the process that they never take the time to recognize their successes. Instead, they tend to have a “glass-half-empty” perspective and are continuously thinking about what has to change.
Periodic reviews are advised in order to emphasize successes, learn from mistakes, and jointly celebrate progress. Senior change teams occasionally make the error of not celebrating enough because they believe it is too soon or too little. In reality, however, getting together to share achievement drives the team to work even harder for the next goal. Celebrate every time you improve understanding for one team or a few distinct stakeholders.