The Transformation Challenge and the Change Leader’s Job

by Doug Ready- Senior Lecturer, MIT Sloan School of Management; Founder, ICEDR

Why has Implementing Enterprise-Wide Transformation proven to be troubling? When challenges persist it is often because there are embedded tensions or paradoxes that surface that seem unresolvable. There are at least five embedded tensions that make the successful implementation of enterprise transformations persistently difficult. They are:

Let’s examine each of these tensions…

1. At the core of many transformation efforts is the desire to breathe new life into the organization―to revitalize ways of thinking, behaving and working. A leader’s typical and, in fact, reasonable response is to introduce a change initiative into the organization. One of the problems that employees face is that a change initiative often morphs into multiple change initiatives, and seldom are these initiatives coordinated or provided the context required to make sense out of them. With so many “change programs” coming at people from so many directions, employees can easily become “change weary,” and yearn for some level of normalcy. Thus, we find ourselves in the conflicted situation of needing revitalization but desiring normalization.
2. It is increasingly commonplace that doing business today means doing business globally, but the complexities brought on by globalization often are in conflict with the need for organizations to make it simple for customers to do business with them. As we search for growth in areas where the contextual distance is widening, and the rules of engagement are less familiar, leaders struggle with creating organizational responses that address the need to master globalization while offering customers and employees optimal simplification.
3. Innovation is the heartwood of any organization’s growth plan. It is what stimulates the creation of new business models, products, services, and ways of working. Yet, so many organizations, particularly in the aftermath of the global financial crisis, are saddled with trying to do business, let along innovate, under increasingly crushing regulatory environments. To be fair, for some organizations this burden has been brought about by their own doing. But for many, it is a stifling tax on a company’s capacity to find creative approaches to solving unmet customers’ needs. As such we struggle with the tension between the desire to boost innovation and the need to operate under increasing regulation.
4. Customers have not only more power―they have all of the power in today’s business quotient. Organizations are struggling to provide solutions that are better, faster, cheaper and increasingly customized. Optimization is the name of the game. Yet, in order to remain competitive with players that are more nimble or have dramatically lower overhead burdens, repeated cost rationalization has become a way of life. Leaders today are in a seemingly endless struggle to reconcile the tension between optimizing benefits to customers while rationalizing their costs of doing business.
5. Advanced technology is at the core of virtually every company’s business model today, and the strategic use of technology has transformed how value is created in industries ranging from car services, to banking, to hotel bookings, to manufacturing. Entire value chains are being digitized. Yet, the onset of ubiquitous digitization is occurring at the same time that individuals are yearning for a sense of belonging or meaning in their communities and in their organizations. Leaders of many of today’s largest companies are struggling with how to reconcile the increasing need for the digitization of their business models with the increasing desire to create organizational climates that have an authentic sense of humanization―creating companies that are driven by an overarching sense of purpose.

The Transformation Leader’s Job

We know from prior research on this topic that two thirds of large-scale transformation efforts fail to achieve their intended objectives. So, what can we do as change leaders to improve these odds?

First, we need to embrace this notion of embedded tensions that make the challenge all the more complex. There are no easy answers; however, the leader’s bedrock commitment to helping to reconcile these tensions is paramount. That means above all committing to an on-going communications and listening campaign so people know what’s going on and know how they might contribute to the transformation effort―and know that they are invited to do so. This process starts by the CEO and top team telling powerful and compelling stories of where the company has been, where it is now and where it needs to go―and why.

Next, the leadership of the change effort can’t end with the top team, the top 100, or the top 1,000. It has to be an all-hands-on-deck engagement. The change leader must signal that enterprise-wide transformation will be a collective accountability, with leadership for the effort distributed throughout the organization. The change leader will need to be skilled at network orchestration in order to have the transformation initiatives integrated so as to minimize change weariness brought on by uncoordinated efforts.

Third, change leaders must go beyond storytelling, motivation and mobilization efforts―they need to provide the resources to skill-up the company and build next generation mission-critical capabilities to propel them to their desired future state. This includes capital improvements, process improvements and building new talent capabilities.

Fourth, leaders and employees will need to build a powerful sense of mutual trust. This is where the will to persevere and the courage to address long-accepted doctrine takes center stage. The messaging provided about the characteristics of the new organization will need to be backed up with the systems, processes and rewards to make the journey authentic. In other words, if leaders state that their organizations will become the world’s benchmark in customer service then employees will need to see that resources have been committed to build that capability and that rewards are distributed to those who exemplify world class customer service behaviors.

Finally, it has become increasingly clear that the transformation journey is a never-ending one. Change leaders must combine words, motivation, capability-building efforts and trust with a relentless commitment to implementation and discovery. While implementing large-scale change leaders should be asking: what are we learning as we’re progressing? This will help to create a culture of agility and resiliency that will pay dividends out into the future, making large-scale change a collective challenge to be embraced together.