WHY corporate Transformations FAIL to Deliver the Outcome…

Exploring key leadership abilities that drive success

by Evelyne Legaux on 17-07-2024

 

As the world keeps evolving at unprecedented pace and making change a compelling priority, it is fascinating to observe that most corporate transformations actually fail to deliver the value creation expected from them. It is therefore of utmost importance to understand WHY?

Studies show, when it comes to transformation programmes, that the key drivers of success or failure are actually the same across industry sectors and geographies, and start at senior leadership level.

 

What separates Success from Failure?

Setting the scene, the first thing to note is that leaders in corporates are under significant internal pressure, the need to transform often stemming from unsatisfactory or poor performance in specific areas of the business. In addition, external pressure driven by challenging trading circumstances, macro-economic headwinds, geopolitical tensions or else may also come into play here.

With the above in mind, leaders’ ability to successfully navigate that pressure towards  delivering both operational performance and transformational value-creation is key!

So, let’s have a look at what leaders should do to drive success.

• Embracing issues and ‘positive failure’

Being constantly focused on delivering targets and other operational achievements, leaders possess a results-orientated drive that they tend to equally apply to any transformation initiatives. Whether consciously or not, they do not see failure as an option and somehow obsess about transformation programmes reporting ‘green status’ at all times.

Such an instinctive rejection of failure though can have a significant psychological impact on the organization, lead to ignoring issues and ultimately cause more damage than good to the programme.

The solution - Instead, leaders must take a step back, understand the basics of human psychology and accept that failure is an inherent part of any transformation journeys, as long as the organization is able to learn and positively rebound from it fast. In other words, it’s all about adopting the right mindset!

• Creating the conditions for people to speak up

All too often, leaders & their teams appear largely mis-aligned when it comes to the perception of a work environment being safe to speak up. While leaders usually have no reservations expressing their own views, they tend to believe that the same goes for their teams. The reality on the ground however may be very different…

The solution - The only way for leaders to avoid or fix such mis-alignment is to be aware upfront that this may happen, and instil a culture of collaboration, empowerment, respect & trust throughout the organization. Equally important is the implementation of a communication strategy that creates a framework for people to safely raise concerns, express emotions & put forward ideas without fear of blame. When people feel psychology safe - that is recognised, valued, listened to, understood & supported - the entire programme dynamics changes. Levels of motivation, adherence to the transformational vision, innovative thinking & trust noticeably go up!

• Challenging the status quo

Having the wrong leaders on top of the organization when embarking on a transformation journey is a recipe for failure. Leaders may prove reluctant or otherwise unwilling to challenge the underlying drivers of current business operations, and even overtly defensive where past performance is sub-optimal. Such a mindset though will set any transformation initiative on the wrong footing, right from the start…

The solution – It is therefore paramount to transformation success that senior leaders cultivate a mindset of openness to new ways of doing, curiosity & innovation. Most importantly, they must be forward-looking and bring willingness to challenge the existing organizational structure, operating models, business processes, systems & underlying culture to the table. In other words, leaders must be willing to shake up the status quo, irrespective of past performance!

• Detecting & mastering moments of truth

Even when off to a great start, transformation programmes typically go through a moment of truth, that is a point when it becomes clear that things are going off track. Due to the complexity, surrounding pressures & depth of change involved with transformation, moments of truth are somehow unavoidable and do have the potential to derail a  programme altogether, if not handled properly...

The solution – Here again, leaders must be aware that, sooner or later, moments of truth will happen, anticipate their occurrence and have a plan in place to effectively address those moments when they do occur. Awareness, proactivity & readiness are of the essence. Most importantly though, leaders must create the conditions for the root cause(s) of issues to emerge and be clearly understood, before putting any remedial action plan in place.

Easier said than done though… There is a fine line between addressing a moment of truth and aggravating it…

 

Can moments of truth turn into opportunities?

Fearing or ignoring those moments of truth can only lead to further disruption. Rather than avoiding them, leaders must have the courage & determination to face and embrace them. The question is HOW?

• First, leaders must find reliable ways to detect moments of truth early. The human factor being at the heart of it all, they must swap traditional operational KPIs for behaviours & emotions here. Monitoring changes in the way people feel & behave provides powerful warning signs/red flags that underlying issues may be putting the transformation programme at risk. Remember: the safer people feel to speak up, the more they will.
• Second, leaders must bring the transformation programme team together in order to gain a common & thorough understanding of the issues. Critical here is for all involved to identify the root cause(s), not just look at the symptoms, and take ownership of addressing same.
• Third, reset & take action, not just to resolve the issues but to restore both vital confidence in the transformational vision & programme capabilities and trust in leadership.

But wait, there is more to it…

Leaders who adopt the right mindset stop viewing moments of truth as issues. In fact, they intuitively understand that those moments are real turning points in any transformation programme, that can go either way: create opportunities to succeed beyond expectations or indeed make the situation worse and fail…

Beyond putting transformation back on track, successfully navigating moments of truth can bring further benefits: programme overperformance vs targets, accelerated delivery of the outcome, highly motivated people and ultimately augmented transformation capabilities across the entire organization.

 

Bottom line, leaders’ ability to understand the human factor and put it at the centre of their transformational vision & strategy, is key to success, no matter the sector or location. Equally key is leaders’ acceptance that transformation is a dynamic process that will bring  deep change & complexity in addition to other pre-existing challenges, thus unsettling people’s sense of psychological safety and leading to decisive moments of truth.

Anticipating & embracing those moments is the only road to transformation success…

 

Let us know your thoughts or questions in a comment below, by email on info@financeotcconsulting.com or indeed through our Contact page.