Business Transformation – what works?

I’m frustrated. Frustrated by the ignorance of managers at all levels of organisations of what it takes to undertake a business transformation. I have had a large number of conversations with senior and middle managers alike over the last ten years about business transformation. I have been left perplexed at the lack of understanding of the approaches managers think will work in changing people’s behaviour and thus transform the business. This has been especially so during our initial conversations.

One might have been forgiven for thinking that with the plethora of articles, dissertations and books written on the topics of managing change or making cultural transformations that the general knowledge of managers would be higher than what I have observed.

The managers I have had conversations with who just don’t get it, fall into three groups.

Unconsciously Incompetent

The first group just have no idea at all about managing change; let alone how to manage a business transformation That is not a criticism of them, but it does become frustrating when they are blissfully unaware and remain unconsciously incompetent no matter what issues arise in their business. They make errors such as:

Assuming people are made in their own image and therefore will feel, think and act like they do. Hence, the only thing that needs to be considered in change is to explain what the change is, why it is being implemented and what they have to do to participate in the implementation. Any resistance is met with incredulity and a view that “they should not think like that”.
Believing that a single communication channel is all that is required and that email is a suitable channel to use to communicate major change or to affect changes in people’s behaviour.
Using novelty and ‘fun’ as the single means to attract attention to the change and affect changes in people’s behaviour. I had one manager suggest that we should use mouse mats with tips printed on them to change people’s behaviour with regard to information security in an organisation of 6500 people that had no computers with a trackball mouse and half the employees were mobile or used tablets. The other helpful suggestion was to attach red balloons to the computers of people who had not behaved in a way consistent with the information security after an audit which would have in itself broken the information security policy.

>h2>Sloganeers

The second group have an idea about change management but that knowledge is shallow and their thinking is shallow. They have little knowledge of what is required to transform an organisation. They tend to use slogans about managing change but do not think through the details. They have a very limited idea about the requirements to transform a business. Errors I have seen have include:

A middle manager who extolled the need for her business unit and the department she was a part of to adopt a “coaching culture”. When asked to what end, the answer was “so that people can learn in a collaborative environment”. Pressed further about the goal, about whether people had coaching skills and what might be required to make it work, what was wrong with the current environment, what coaching techniques would work best etc., the answers were a string of verbal snapshots of a book she had read on developing a coaching culture. There was no goal and no view of what was wrong now. There was only sloganeering.
A tender to change the safety culture of a workplace was limited to the running of workshops for:
- The leadership team to have them take accountability for safety.
- Middle managers to learn how to motivate people to adopt safe working practices.
- Frontline workers to learn how to work safely and take personal responsibility for safety.

Failure was inevitable as there was no intention, confirmed by questioning the tender officer, to include communication tactics, stakeholder management, performance management, cultural analysis or even risk analysis and evaluation in the mix of tactics to affect the change in culture.

Zealots

The third group know, or think they know, a lot about change. They have been accredited in PRINCE II or PMBOK or other project management discipline. Or they have attended training in broader change management or perhaps read one of Professor Kotter’s books. They have taken in part of the lessons but have not put the whole together in a project. They recall the 8-step process with vigour and try to follow it with zeal, but don’t understand when to change the process or eliminate a step or when to start at with step 3 rather than step 1, because they have not learned the bittersweet lessons of failure and success.

Errors I have seen include:

A senior manager coming to me after a workshop wanting to know when I was going to get the board sign-off on the change programme we were running with the CFO. He upbraided me for not understanding that to make change effective, I needed to have the most senior leadership on board. My response was that the change, while important to the organisation and requiring significant changes in behaviour, was not a board matter. It was a senior management matter. I added that we had support from senior management in terms of budget and project plan prioritisation as it impacted different departments, but would not get their hearts and minds until we had runs on the board. The implication being that true support of senior management would not be forthcoming until the three year project was a year or more old. He advised me to read Kotter’s book if I really wanted to manage change, as it was clear I did not know what I was doing .
A business transformation required each and every member of the organisation to take responsibility for their role. Much was done about writing job descriptions, building a competency framework, writing processes and procedures which included assessments to be used to ensure each employee knew how to complete their role. Work was undertaken with the board and the executive team to improve their skills and attitude. It was a very comprehensive effort over three years, however there was no governance structure for the transformation. Emails were used as the main communication tool, and there was no change management strategy and little measurement of progress and issues. By some measures the transformation worked, but the return on investment was much less than it could otherwise have been.

Business Transformation Basics

So, if the foregoing are examples of what frustrates me, what would I expect to see in a major transformation? I’d expect to see these business transformation components that provide answers to key questions:

Strategic vision: What is the purpose of the transformation? What are the choices we have in delivering against the purpose? What return on investment will we get from this transformation?

Executive leadership: What governance structure do we need to make this transformation happen? What is an appropriate budget? What do we need to deprioritise?

Project capability: What specific analysis do we need to carry out to ensure we are dealing in facts as we build our plans? What do we need to do to ensure we have team cohesion? What skills do we need on the team and what development opportunities do we need to provide to be able to effectively execute our plans?

Change management: Who are our stakeholders with power over the outcome of our transformation and what do we need to do to make them active supporters? How do we get our people to feel, think and do what we need them to as a result of our communications so that they are engaged and committed to adopt the new practices we require? What checks and balances through appraisals, rewards and recognition and audit processes do we need to institute to ensure people understand we are serious about this transformation?

Business integration: What processes do we need to re-engineer to lock in the transformation? What do we need to build as a framework to ensure we have the competencies to work in our new way? What culture do we need to support our new way of working and how will we change our culture?

Skill development: What skills, knowledge and attitude do we need to build in our staff and how should we do that? What coaching do we need to be able to deliver to reinforce the capability building through training? What further support do we need to have to ensure we transfer the skills, knowledge and attitude back to the workplace?

I’m not advocating that all of these elements are present, but I know, from research and observation, that if sixty or seventy percent are present then the business transformation is likely to be real. I also know that if only twenty or thirty percent are present, the business transformation will fail. I’m also not advocating a six step process in sequence. All sorts of business transformations have small starting points and the majority are led from the middle of an organisation. So, it is likely that the starting point is with any one of these components. What I am saying though, is that over a one to two year period the majority of these components have to be present for a business transformation to be successful.

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