(Second of two parts)
While transformation has always been integral to the long-term success of a business, both the nature and rate of transformation have changed in the past few years. Companies have to transform more regularly to keep up due to market disruptions increasing in frequency and impact, further highlighting the need to transform successfully and consistently.
A 2021 research collaboration between EY and the Saïd Business School of the University of Oxford determined that to push organizational change, leaders must use a strategy that emphasizes human factors and take into account both leaders and workers. As much as 67% of the respondents claimed that they had gone through at least one underwhelming transformation during that period, leading to the startling insight that organizations accept this failure rate as the price of transformation.
The path to transformation is neither straightforward nor linear, with detours and turns along the way. Leaders must be able to learn as they go, develop a strong belief in the transformation, cultivate a culture of both discipline and experimentation, and welcome emotions instead of ignoring them. Research findings from the study highlight that emotions are at the core of the complex factors that determine if transformation succeeds, regardless of location or industry. The study identified six key drivers that leaders have to instill in their practices to increase the likelihood of success in their transformation projects.
In the previous article, we discussed the first three key drivers: adapting and nurturing the necessary leadership skills, creating a vision that everyone can believe in, and building a culture that encourages and embraces all opinions. In this second part, we discuss setting clear responsibilities and preparing for change, using technology to quickly drive visible action, and finding the best ways to connect and collaborate.
EMPOWER: SET CLEAR RESPONSIBILITIES AND PREPARE FOR CHANGETransformations are typically viewed as linear processes, but findings from the study prove this is not the case. There will be all manner of twists and turns and stops and starts. Offering structure, discipline, and the creative flexibility to experiment and innovate will be key to managing transformation.
Autonomy to execute must be established for the organization to transform effectively. In high-performing transitions, 52% of respondents indicated that roles and duties were clearly assigned to staff, and 49% said that decision-making authority was delegated in a clear and appropriate manner throughout the business compared to the 29% in low-performing transformations.
By adopting a “fail fast” mentality as opposed to a “don’t fail” attitude, leaders can encourage experimentation and innovation. While a fear of failure frequently results in squandered opportunities, huge successes can be gained from small failures. The approach set up by 46% of respondents from high-performing transformations fosters creative experimentation, but they also simultaneously ensure that failed experiments do not have a detrimental impact on compensation or career.
Key driver: In order to seize and take advantage of possibilities that can be overlooked by a mindset that is unwilling to fail, leaders must encourage experimentation and help their people develop a mindset of failing quickly instead.
BUILD: USE TECHNOLOGY TO QUICKLY DRIVE VISIBLE ACTIONTechnology does not create the vision; it enables it. For the vision to be realized and the transformation process to be facilitated, the appropriate technology is essential. According to executives, effective technology usage is the second most critical factor in success, and poor technology use is the second highest factor in failure.
It’s also critical to recognize how emotionally charged the introduction of new technologies may be. There are some that are afraid of what technology is capable of, or the impact it can make. Employees in unsuccessful transformations are 25% more likely to concur that the change causes job security concerns. Others might also view it as a way to avoid interpersonal connections, which are crucial for the emotional health of employees as well as the operations of the company.
To get customers and employees on board with the vision and the value of new technology-enabled techniques, it’s critical to demonstrate their value early on and to attract early adopters and influencers. Leaders must prioritize progress over perfection and recognize how technology can affect the emotions within an organization.
Key driver: With appropriate learning and emotional support, employees are more likely to develop a digital mentality and embrace the vision and value that technology can provide.
COLLABORATE: FIND THE BEST WAYS TO CONNECT AND CO-CREATEThe perpetual state of transformation now makes interdependency and collaboration a critical need. This is opposed to legacy cultures that adopted a command-and-control, top-down hierarchical approach, with leaders setting the vision and employees simply carrying it out.
Leaders will have to create a culture that encourages collaboration and creativity. They must create a safe environment where new ways of agile and digital working can flourish in order to promote creativity, engagement, and meaningful work. In high-performing transformations, 44% of respondents reported that their organization’s culture fostered new methods of working, as opposed to 28% in low-performing transformations. It is therefore important to enable employees to redesign and redefine their own jobs, both in terms of what tasks and behaviors need to change and how work is accomplished. Leaders can co-create new methods of working and purposefully build interdependence across teams to handle both the emotional and logical aspects of change.
Key driver: Leaders and employees must work together to rebalance delegation, ownership, and empowerment in order for new ways of working to be successful.
UTILIZE THE STRENGTH OF YOUR PEOPLE TO ACCELERATE TRANSFORMATION SUCCESSLeaders are aware of the need for their organizations to transform but acknowledge that change is difficult, with many intimidated by the idea. Simply standing still is not an option in a time of constant disruption. Leaders can put their business on the path to successful transformation by utilizing the power of their people and implementing leading practices in each of the six drivers.
It is imperative to recognize that success does not come from excelling in just one of these drivers, but in all six of them. Simply put, while strategy, vision and technology set the framework for transformation, it is still humans that have to remain at the center of the journey.
This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.
Rossana A. Fajardo is the EY ASEAN business consulting leader and the consulting service line leader of SGV & Co.