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WEACCELERATE

Research-led Growth

  • WeAccelerate Insights

To Transform or Not to Transform?

Transformation is often synonymous with digitization, target operating models, organizational restructuring, operational efficiency, and software implementation. Agencies and consultancies sell transformation and transformational change as a means of re-engineering your business for increased efficiency, greater agility, unlocking new revenue engines, and creating value for employees, customers and stakeholders. However, over 70% of transformations still fail to deliver the intended benefits or value.


Businesses undertake transformations as a means of achieving short-term and year-end targets and objectives. These tend to imply an annual list of transformational programmes with a proposed high return on investments. Typically, such lists are driven by business leaders seeking to grapple with the new normal which includes a rapidly changing workforce disrupted by technology, rise of generative artificial intelligence (i.e. OpenAI), buyer and consumer behaviour, environmental, social, and governance (ESG) impacts.


Although stakeholders and shareholders buy-in to these annual promises of change, employees within businesses are highly impacted by what I term as ‘transformation burnout.’ As a senior executive at a global corporate real estate firm put it recently: 

“My teams are tired of transformations as there are too many changes happening all at the same time, and clients often do not have sufficient time to enjoy the benefits of a change before another change takes place.’

 

This leads to the question ‘To Transform or Not to Transform?

Transformation done right yields multiple benefits and can truly turbo charge any business towards achieving their overarching strategy. However, what are the key factors to consider when deciding whether to transform or not to?

 

1. Transformation must be led from the Top

Transformation is most successful when an individual or a group begins to review the company’s position including the competitive environment, macro and micro environmental forces, industry trends, technological advancements and financial/revenue targets to assess the necessity for change. These are typically driven by a new leader who identifies the need for a major change. When the change impacts the entire business, the CEO is key to the success of the transformation; and when it’s divisional or related to business units, the general manager or director takes the responsibility. However, when transformation is not driven by leadership, its potential to succeed can be threatened by multiple competitive priorities and a lack of impetus to drive the change.

 

2. Transformation must be aligned with Strategy

Every true transformation journey is underpinned by the strategy and vision of the organization. However, far too many transformation programmes are focused on efficiency gains that are important but not strategic in nature. As Michael Porter, puts it “Improving operational effectiveness is a necessary part of management, but it is not strategy. The operational agenda involves continual improvement whereas the strategic agenda is the right place for defining a unique position, making clear trade-offs, and tightening fit. It involves the continual search for ways to reinforce and extend the company’s position.”


When the strategic objectives of an organization cannot be traced to a transformation objective, then a review is required to determine alignment and whether the transformation is worth pursuing. Transformation should not be embarked on simply because it currently seems fashionable to do so.

 

3. Culture is a key determinant of success

Many business leaders fail to consider the impact of organizational culture in the transformation process. They create great strategy papers and documentation but are unable to translate these into actionable initiatives which generate the desired benefits. Effective transformational programmes must consider the cultural dynamics of an organization, ensure new behaviors and actions are rooted in social norms and shared values of the employees – that become “the way we do things around here” rather than how they want us to work.

 

4. Communication makes or breaks the transformation

For transformation efforts to be successful, business leaders must use all communication channels to share and reshare the strategy and vision until it becomes embedded in, and employees can truly visualize and see the benefits of adopting change. This is often challenging.


We once worked with a VP at a global business who had spent over 35 years building software products but never really saw the benefits of communicating the benefits of change to their team. They believed the teams were better told what to do rather than why they were doing it. In that scenario, strategic and cultural alignment helped in driving the desired change. WeAccelerate supported him by creating a framework to communicate the strategic objectives frequently, remind himself of and demonstrate the expected behaviours whilst seeking and responding to feedback from peers and colleagues.


Communication in transformations is reflected in both words and deeds, and nothing undermines change more than inconsistent behaviour by leaders driving the change.


The above does not represent all possible factors to consider when deciding whether to initiate a transformation, but it does highlight key factors which could determine success or failure. To remain competitive, businesses need to continually scan the market and evolve their strategy to meet changing market needs. When transformations are driven by the top, aligned with strategy and cultural considerations and leaders communicate often, businesses can achieve sustainable benefits and return on investment.

 

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