Transformation: 5 key challenges and how to overcome them
Adam Kyriacou, Managing Partner at Odgers Interim, discusses the common challenges he sees organisations face when implementing large-scale transformation, and explains how they can be overcome
Transformation has become the watchword of Australia’s business climate. What was once considered a ‘once-in-a-lifetime’ event for a company has become the mainstay of how many aspire to operate. Whilst the motivation behind it may take many guises – whether it is discarding outdated methods of operation, gaining competitive advantage, staving off industry disruptors or simply ensuring the survival of a brand – it is clear that transformation is taking centre stage for almost every organisation.
Rarely, however, is a transformation programme completed on time. Even rarer, is a transformation programme that goes to plan. In fact, at a 70% failure rate, most are destined to never succeed. Considering the time, money and effort that is required from an organisation to implement a transformation programme, this is not a sustainable state-of-affairs for any company looking to be best in class.
As an interim provider, it is something we know intimately. Increasingly we find ourselves at the heart of this ‘change’ landscape, sourcing the now established transformation director and helping organisations deliver change in all its many flavours. With that in mind, these are the most common hurdles we find that organisations need to overcome in order to successfully achieve their transformation programmes.
1. People is your first priority
Cultural impact is often the most important aspect of a transformation programme. It is also the most widely ignored.
Roles and even entire functions are likely to change as a result of the transformation. Some positions may cease to exist, whilst others will evolve into something entirely different. Critically, it’s an organisation’s workforce that will help drive the initiative and help see the transformation through. They therefore need to understand the impetus for change and be a part of the plan from start to finish.
John Hanna, a specialist tech sector interim business leader and the current interim CEO of Reachmedia, told me that, “the vast majority of organisations implement change without fully understanding the current holistic state and without developing and communicating what the future state will look like. They attack the process before engaging the people.”
He advises that organisations, “design a future state with as many people across the business as is practical. Engage the whole business to socialise potential change.”
2. Work to an agreed timeline
It is critical to set in place a transformation strategy that aligns to the organisation’s strategic vision. Within this, there needs to be a roadmap that outlines when key milestones need to be delivered and by whom. Don’t try to complete the whole thing at once and ensure that change is delivered in lumps that form part of a wider plan. This will mitigate the chances of falling foul of the all too common ‘change fatigue’ and ensures the programme doesn’t turn into an initiative that never ends.
Eutillio Buccilli, an interim executive, having served in both CEO and CFO roles has a number of suggestions; “don't become overwhelmed with scope and don't try to fix everything at once and importantly, change needs to be measurable,” he told me.
“The program needs to have in place a shared framework for structuring activities and responsibilities, a roadmap for laying out their proper sequence and a set of guiding principles that will govern the organisational transformation process.”
3. Declare small victories
Too often do organisations believe that transformation can happen behind closed doors and then be revealed in one final ‘big bang’ moment. Particularly when progress is stalling, there is a tendency to try and keep the whole thing ‘under wraps’ until it is completed. This is another cause of ‘change fatigue’ that can easily be avoided. Once a roadmap has been agreed upon, the organisations must ensure that each milestone of that plan is communicated to every member of the organisation – whether that milestone has been achieved or not.
Peter de Fontenay is an interim executive and CIO. He advises an ongoing flow of communication; “communicate, keep stakeholders informed, be open with the transformation goals and plans, be transparent about the ‘good and the bad’ as the transformation progresses, celebrate the successes along the way.”
John Hanna agrees; “work to a communicated timeline and celebrate wins and positive outcomes of change. Start with small but significant change in areas that positively impact people.”
4. Deliver transformation from the top
Buy-in from the Board and executive team is a necessity. This will ensure the programme is driven throughout every level of the organisation and that nothing is out of balance so each function is kept on track and is fully integrated. A transformation programme should be boundaryless and encompass every function but also be driven by strong leadership.
For a large-scale programme to succeed, Eutillio told me that there must be, “top down commitment and direction to create a focus throughout the organisation and develop a working environment that instils trust, respect and conditions that energise and empowers.” He also advises a cross-functional approach in order to, “link activities, functions and information in ways that lead to performance enhancing change.”
5. Engage a change management team
Without a dedicated group of change managers, a transformation programme will deviate from the organisation’s strategic vision. This group’s objective is to ensure that the programme embodies the organisation’s values, is balanced and fully integrated across every function.
According to Peter, “not having a formalised change management structure in place that is resourced to fully understand and document the areas of impact,” is one of the most common mistakes an organisation can make.
Eutillio suggests that an independent project manager should lead this group; “for a large-scale transformation programme to be successful, the programme requires a professionally experienced independent project lead that is unbiased, unattached and unemotional about where the organisation is today. Supporting this project lead needs to be a project team made up of cross-functional team members.”
Change is no longer a one-off event. Organisations must continuously challenge the way they operate, the way they interact with their customers and the technology they use. As such, these 5 hurdles must be overcome within the scope of a continuous cycle of improvement that is aligned to the organisations strategic vision. Periods of change should be followed by a period of optimisation, followed by another period of change. It should be an evolutionary process that enables the organisation to be agile, resilient and best in class.