Why is Transformational Change so Difficult?
David Trafford and Peter Boggis help executives and leadership teams deliver successful change, specifically technology-enabled change.
They provide thought leadership and thought partnership on all
aspects of assessing, developing and operationalising strategy.
They are founding partners of Formicio and authors of the
All the available evidence indicates that organisations are not good at delivering transformational change. Whether the transformation involves merging with another company, replatforming core IT systems or changing culture to become more customer-centric, the success rate – in terms of achieving the targets set at the outset – is often said to be only about 5%. Perhaps more worringly there is no evidence to suggest that the success rate is improving. The question is why and what can be done about it?
While we don’t claim to have the definitive answer, we have found that the chances of success are significantly increased if four critical conditions for success are in place. These are: firstly, understanding the real purpose of transformational change. Secondly, understanding what’s anchoring an organisation to its current trajectory. Thirdly, ‘pulling’ rather than ‘pushing’ the transformation. And fourthly, knowing how to measure success. Each of these critical conditions is discussed below. While we class these four as critical, we also recognise that other conditions need to be in place to be successful.
The purpose of transformational change is to execute a strategy
If the purpose of transformational change is to execute a strategy, then the purpose of strategy is to define a new trajectory for the organisation. A trajectory that takes the organisation to a different – and better – future to the one where it’s currently headed. Developing strategy is therefore about understanding possible futures and deciding which new trajectory to take. Furthermore, strategy is only strategic if the choices made are difficult, if not impossible, to undo. The rest is planning, which can be changed – albeit at a cost. This defines an important characteristic of transformational change: the fact that its purpose is to implement a set of strategic choices aimed at changing the organisation’s trajectory. The greater the clarity of these strategic choices, the greater the clarity of the strategic intent and the purpose of the resulting transformational change initiative.
Organisations are anchored to their current trajectory by powerful forces
The second condition for success is understanding why an organisation is on the trajectory it’s on and how difficult it would be to change that trajectory. Unfortunately, once a strategy has been defined most leaders focus on the wrong future – the one they hope to achieve rather than the one they’re likely to get. As a result, they are often surprised and disappointed when the organisation doesn’t respond in the way they had hoped, and continues on the same trajectory as if nothing had happened. What they often do not appreciate is that the current trajectory of their organisation is determined by a set of powerful navigating forces that act as invisible tramlines taking it to its default future.
Some of these navigating forces, such as economic trends and regulation, are exogenous, originating outside the organisation, while others, such as systems, processes and capabilities, are endogenous, originating from within. Some navigating forces are easy to observe, such as technology and structure, while others, such as values and culture, are often hidden deep within the organisation and are not apparent to the untrained eye.
If the purpose of transformational change is to change an organisation’s trajectory, then a key aspect of designing the transformational change must be to identify these navigating forces and assess their level of influence. Only then can informed choices be made about what actions to take to alter their level of influence.
Transformational change should be operationalised not implemented
The third condition for success is taking the right approach to changing an organisation’s trajectory so that it is in line with its strategic intent. But what is the right approach? Should transformational change be implemented or operationalised, and what’s the difference?
Essentially the difference is between pushing an organisation onto its trajectory of strategic intent and pulling it there.
Implementation, as it’s generally practised, is achieved through the execution of a predefined plan. The weakness of this approach is that it assumes that organisations are deterministic and programmable, but we all know they are not and that they can behave unpredictably. They are dynamic systems that respond – often in unforeseen ways – when attempts are made to change them. Implementation is better suited to situations where the desired outcomes can be defined with certainty: for example closing down a manufacturing plant or withdrawing a product from market.
Operationalising change takes a different approach, and creates a context where employees can use their experience and apply their expertise to pull the organisation to its target future. The challenge is that it needs to be embedded within the organisation in ways that lead to intellectual, emotional and physical engagement. This can only be achieved if the right context is created. This approach is better suited to situations where the desired outcomes are more transformational and difficult to define with certainty at the outset.
Leading not lagging indicators
The fourth condition for success is knowing what to measure. Changing the trajectory of an organization is a bit like changing the direction of an ocean liner – it takes time to get it onto the target trajectory, and time before it’s apparent that the trajectory has actually changed at all. It’s therefore important that the right things are monitored and measured. All too often the management of change programmes focuses on the wrong things: for example, what’s been delivered against the plan rather than the direction the programme is actually taking and its momentum. Obviously, retrospective indicators such as milestones achieved against the plan, spend against the budget and increased revenue by channel are important, but they only tell you where you’ve travelled so far, not where you’re going. That’s not to say that reporting on progress is not important; it’s necessary but not sufficient, particularly when operationalising – as opposed to implementing – change. While not a qualitative measure, one of the best ways of assessing whether the trajectory is changing is to listen to what people are saying. If the language used reflects the target future then it’s highly likely that the trajectory is changing to that future. If not, then those powerful navigating forces talked about in condition two above are still at play.
It’s often said that change is the new norm, and if this is true then organisations need to get much better at delivering transformational change. If not, they will join the likes of Blockbuster, Rover, Marconi, HP, Enron, Lehman Brothers, WorldCom, Monach Airlines, Borders book stores and British Home Stores whose default future destroyed wealth, disappointed customers, impoverished investors, damaged careers and destroyed livelihoods.
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