In an era defined by continuous change, transformation has become critical for businesses trying to keep up. It’s no surprise that 6 in 10 CEOs say they’re under pressure to deliver significant digital transformation, but with the complexities that surround transformation, 88% still fail to deliver their original goals.
So what are the remaining 12% doing right?
Below are five success factors for you to follow to ensure you don’t end up in the 88% of unsuccessful transformation programmes.
The success of any project is underpinned by how it drives the needle on business performance – and transformation is no different.
Often the focus is placed on what the transformation is and how the organisation is going to achieve it, but not enough focus is given to the why. Organisations need to prioritise driving alignment around the case for the change and how this fits with the overall business strategy.
Clarity will ensure plans are communicated effectively to the wider business, progress can be tracked efficiently and there is buy-in from the wider workforce. People need to understand the “why” of the transformation to believe in the programme, and adopt the changes as intended.
This shouldn’t just be communicated at the beginning of a transformation, it needs to be reinforced throughout the programme to maintain motivation and ensure all decisions are made with the goals of the business in mind.
Transformation offers businesses endless opportunities to grow and modernise themselves, but this can often be the very cause of the failure of a transformation.
What we often see is organisations initiating transformation programmes without considering other initiatives that are already in flight, often diluting the focus and leading to poor ROI. This can lead to competition for resources and funding across the business. Adopting a new way of working requires time and attention that can distract from a business’s core purpose of delivering for customers. Too few organisations consider the business impact or use this as a lens through which to prioritise and stagger their change programmes. Consider the trade-offs that will be required and always look at the bigger picture across the organisation before going ahead with any projects.
Investing in advisory consulting support can help to ensure dependencies are fully explored and the business impact carefully planned for and minimised. Having external objective assessment can help organisations to prioritise their transformation agenda, ensuring they achieve success in the projects that will really make a difference to business performance.
Executive and board sponsorship is the backbone of transformation success. Not only can this unlock access to funding and resources, but executive sponsorship also ensures change is embraced across the business. The board can effectively communicate the end goal of the project and educate teams on the long-term benefits to help foster their commitment to the change programme.
With the board actively advocating for the change programme, it will remain a priority for teams throughout the business. Their visible commitment will act as model behaviour throughout transformation, reducing uncertainty and building trust, ensuring employees are heard and respected throughout the change programme.
Although different board members will naturally sponsor different change programmes, it’s important that the board as a whole is supporting of the major initiatives and is prepared to make priority calls between them if required.
With transformation becoming somewhat of a buzzword, there’s a danger that every change project gets labelled as transformational. We often see this happening with smaller, business-as-usual change programmes when in reality they do not drive enough impact against business goals.
It is helpful to have a clear definition of what is a truly transformational programme – wide-scale change that requires a high level of attention and detail to be delivered effectively. This is where the Executive team needs to be spending their time and providing input.
Transformation is far more complex and time-consuming and often involves multiple business functions coming together to meet a unified goal. These are the programmes that will drive the most impact and should be prioritised to get the best ROI for your business. Business as usual change programmes are still important but require less executive time and business attention. Treating all change programmes the same can dilute management attention and focus.
It goes without saying, that all successful transformations are underpinned by regular reporting on key business metrics to track the ROI of that change programme. These metrics must be able to demonstrate impact and not just progress of the project.
Transformation leaders should identify the key success metrics when building the case for change and create regular reporting processes to monitor progress. Clear KPIs will not only allow the workforce to remember the “what” of the programme but also the “why”.
However, it is critical that organisations do not fall into the trap of “watermelon reporting” – this is superficially positive reporting, green on the outside but red underneath.
Transformation leaders need to get into the nitty-gritty of the data to see a true reflection of the success of the programme. There are vanity metrics that may appear to show a successful transformation, but more in-depth or qualitative data and feedback may reveal a negative reality. Structured subcommittees and direct engagement with senior leaders below board level are great practices to put in place to enhance oversight of ROI and impact.
Successful transformation hinges on three critical factors – strategic clarity, organisational and board alignment, and measurable impact.
Transformation shouldn’t be defined by the amount of change, but by the tangible value it offers the business long-term. This can cover a range of KPI’s – increased revenue, reduced cost, increased efficiencies – the list goes on. Ongoing reporting will maintain accountability and demonstrate the value of transformation to the board, opening up new opportunities for change in future.
Get these factors right and successful transformation will become a reality.
If you require support to drive transformation in your organisation then advisory consultants can provide an objective view and guidance, or interim managers can support in leading transformation programmes.
