Disruption, Friction, and Change: The Hallmarks of a True Transformation
Company transformation is a holistic, top-priority endeavor that requires aggressive focus from the management team to reach the full potential of a business. Transformations are difficult undertakings and come with a high likelihood of failure. But with a focused plan and dedicated leaders, company executives can turn things around and achieve significant success.
Real transformation is disruptive, it doesn’t just work with existing management, existing processes, existing budgeting cycles, existing ways of doing things. It will be disruptive, but it is the main priority of the organization. And that will create a challenge and tension and friction in the organization, necessary companions to achieve a true transformation of the company. This is not something that can be third or fourth on the list of things that the CEO has to do. These are companies that look where they are now and look to the future, they know they need to do more than just gradually improve from year to year to stay ahead of the competition.
Managers are often skeptical of the term “transformation” and the opportunities it can offer. Research shows a constant, very high failure rate of these programs according to the reports of the companies themselves. Approximately 70 percent are routinely cited as the likely failure rate of these types of programs. Not surprisingly, when you think about it. The company (which is going through a transformation) will find itself in a situation where it is trying to change many things, in parallel, to a significant extent.
What we find, of course, is that the resistance – in the wider workforce in the company, but also in the expanded management team – is often very high towards the introduction of such changes. The company needs to go through a process of building commitment, through aspirations and ultimately, a set of plans that will allow it to move beyond the status quo.
It requires a series of steps, a disciplined approach, which many companies are simply not ready to do alone. It’s all about avoiding the outflow. So, in the aspiration phase, people do not use their full potential. They go to seven out of ten. And then they let some things slip in the planning and execution. They didn’t see things to the end. And they work seven out of ten. They do not incorporate the changes necessary for the initiative to be sustainable. You must, at every step of the process, go 100 percent and be able to realize the full potential of the business for the transformation to be successful.
It is a real value to have an independent perspective. Many times, management teams – highly qualified management teams – have lived by the plan, been in business for a long time, and developed paradigms. Bringing someone who has a new perspective and who is very independent is powerful in making this work well.
The chief transformation officer is someone who will report directly to the CEO, who will sit on the executive management team as an equal to all other executives who could lead large companies or lead functions, someone who will be responsible for the quality, rigor and pace of the transformation program. This boils down to pretty subtle things. It’s less about mechanics. It is more about the degree of challenge that occurs in these early conversations.
Very often there will be a situation where some battles with team members have to be chosen. That constructive tension that is created, in the best of these programs, is one of the things that allows the organization to go further and faster than it would under the “usual business” approach.
Experience is needed here. The skills needed to run a company are very different from the sets of skills needed to transform a company. You have to choose your battles. You can’t fight in every fight. The trick is to make people realize that you are acting almost like a personal trainer. You push them to get better. It is best if you can develop those relationships early and establish connections, personal connections with people, so that they see you as a technical director, as a person who is just trying to do the best for the organization. It is also necessary to talk to the leaders, to pass, to orchestrate those conversations, to get on the same page, to form personal relationships that will be the basis for driving trains forward.
Transformation cannot be separated from finance and financial processes. It is an integral part. The initiatives that are delivered are transferred to the budget forecast. The annual cycle in which the business continues, where the next budget is set, must have the same transformational thinking in it for the organization to learn the habit of following value. Then in the next budget cycle, managers set another ambitious goal and go after that and put that value at the end.
Another thought is to change the way the company works, the way the company works. If a company feels the same on day zero and day 365 or in two years, you probably haven’t changed the company so the transformation will be sustainable. You need to change the way a company identifies, makes and executes decisions at its core.
It is a permanent revolution or a constant new way of working. Transformation is here to stay because, after all, transformation is reaching your full potential, companies will start thinking about it more and more often.
One of the useful phrases is “constructive dissatisfaction”. It’s a wonderful way to describe the kind of ethos you want to see in a company that will continue to improve. From the CEO to the people at the first level, everyone is constructively dissatisfied with their current level of performance and are always looking for ways to move to the next level, to move things forward, to improve, to continue.
That mind-set ultimately is what distinguishes companies that continue to lead and that thrive in what are increasingly turbulent and high-change environments, compared to those that eventually go through the process but collapse, exhausted in the end.