Successful transformations start with what you want your culture to feel like afterwards
Mar 28, 2018
Organisational transformations come in all shapes and sizes, and – at root – are about making radical change to deliver value. But what many people don’t realise is that the nature of transformation itself changes all the time.
What do I mean by this? Well, in our Consulting business, we’re long accustomed to seeing clients seek to transform their organisations through five broad lenses: cost, growth, deals, risk & regulation, and digital & technology. But today, rather than pursuing just one of these goals, we’re increasingly finding that clients are combining two or three of them in new and innovative ways.
For example, they might come to us for help in cutting costs strategically to create a more robust platform for future growth. Or they may ask us where they should invest funds in their key capabilities to fuel growth. In both cases, they’ve grasped that lower costs and higher growth are two side of the same coin.
Meanwhile, clients in regulated industries – notably financial services, utilities and pharmaceuticals – tend to take a different perspective on transformation. Faced with an ongoing need to comply with evolving regulations, they’re moving away from the traditional view of compliance simply as a cost of doing business.
Instead, these organisations are seeking out opportunities to use regulatory compliance programmes to transform their entire operations, while also improving the experience and engagement of their people. So they’re simultaneously looking to comply and motivate their employees more effectively by transforming their organisational culture.
We’re also seeing transformation driven around M&A deals, where a decision to acquire or divest operations can act as trigger to transform the entire organisation. This applies particularly in merger situations: the fact that these involve bringing together different cultures and workforces creates an additional spur and opportunity for business transformation.
While these various types of transformation all differ in some key respects, what lies at the heart of all of them is the vital importance of culture in delivering a successful outcome. Because, for any transformation, success isn’t a given. Indeed, research consistently shows that between 50% and 70% transformations fail to achieve their desired goals.
Why? In our experience, transformations fail because they focus too much only on technology and processes, and not enough on people and culture. The result: people don’t understand why they should change the way they work, and therefore resist doing so. This lack of adoption means the transformation is doomed from the start.
That’s why our approach to helping clients transform incorporates human-centred design to focus strongly on people’s experience. This means bringing the right knowledge and insights in business and technology, and combining these to generate the right user engagement and experience. It helps staff understand why they should behave differently and adopt the new systems and processes. Put simply, showing them what’s in it for them and why it’s in everyone’s interests.
What does this mean for companies considering a transformation? In my view, their first step shouldn’t be to think about systems and processes, but about what they want the culture of their organisation to feel like once they’ve finished the transformation. What would they like their people to be saying about it? How about their suppliers and potential recruits? Having decided on that, they can work backwards to establish how to engender the desired culture – and then use those insights to drive the project.
The late management guru Peter Drucker once said: "Culture eats strategy for breakfast." Guess what: it follows up with transformation for lunch. The message is clear. Focus on the culture and people aspects – and then there’s a good chance that your transformation will succeed.