Taking a systemic view, assessing the organization’s current state and capacity for change will go a long way in helping organizations understand and plan appropriately for the true scope needed for a successful transformation.
Surely, most of us have heard that only about 30% of organizational transformations (agile, digital, etc.) deliver on the organization’s anticipated benefits. In over 20 years leading and guiding enterprise business transformations, my perception of the just-mentioned statistic rings true.
Most of my recent engagements have been with organizations on their 2.0 or 3.0 transformation journeys. Basically, these organizations have been resetting their transformation efforts. There are many reasons for these resets, but here are some of my observations beyond the basics of having a lightweight transformation plan.
First, a vision of why the organization is undertaking the transformation is not clear and/or does not emotionally resonate with employees. Helping the people, that must undergo the change, understand and connect with the purpose of their individual role in the transformation is critical.
Second, senior leaders underestimate the need for them to champion the transformation (not just their involvement or approval but visible and actively engaged). By some estimates, transformations championed by senior leaders are six-time more likely to be successful than those without champions.
Scope of Change.
Third, many organizations limit agile or digital transformations to their IT department or delivery teams. They do not appreciate and plan for the magnitude of change needed throughout the entire organization. This is partly because of underestimating the complexity and interconnectedness (see next paragraph) of the organization, meaning a change in one area will have unintended impacts or cause friction in other areas of the organization. Taking a systemic view, assessing the organization’s current state and capacity for change will go a long way in helping organizations understand and plan appropriately for the true scope needed for a successful transformation.
Fourth, most members of an organization do not know how value actually flows through the organization. For most of you that have conducted a value stream mapping session, this should ring true. There is typically no one person in a large organization that knows how value flows through the entire organization from customer initiation until the organization receives payment. Getting an understanding and alignment on how different parts of the organization contribute to the current flow of value provides valuable context for the entire organization and informs the transformation effort going forward.
Lagging vs. Leading Indicators
Fifth, most organizations measure lagging indicators/metrics as they are the easiest to identify but are backward looking. Identifying and measuring key leading indicators/metrics give organizations an opportunity to influence the desired outcome(s). This is not to be misunderstood that lagging indicators/metrics are not important. They are the absolute measure of outcome(s) but cannot be used during the journey to influence the end result. Metrics used correctly, inform at least one specific decision, influence a behavior or have market value.
Preconditioning for Change.
Sixth, organizations do not set up the preconditions (updated policies, processes, reward system, roles and responsibilities, skills, physical office arrangement, decision making structure, metrics, etc.) needed to realize second order changes (these are the permanent changes that becomes the new normal for the organization). These preconditions set up the environment that nudge cultural norms in a way that both discourage old ways of working and encourage the changes required for the transformation to deliver the anticipated benefits.
Organizations today exist in a dynamic, competitive environment that demands adaptation, and at times, re-engineering of processes and organizational behavior to succeed in such environment. This is one of the reasons why organizations undergo transformation—and they should! But what organizations should not see is the constant reset of their transformations.
The preceding discussion speaks to just a set of observables, and at times, predictable reasons. This is the reason why I recommend and endorse an approach that includes comprehensive assessments, strategies to drive business agility, and behavior changes, to make concrete the nebulous concepts and forces that help or hinder transformation efforts.