A staggering 70% of transformation programmes fail to meet their stated objectives. In fact, some studies place this figure at 90% or more. We set out to explore the reasons behind this eye-watering statistic – and what practical steps leaders can take to improve the odds in their favour.
As we have discussed before, many larger organisations have needed to accelerate their digital transformation programmes to remain operational throughout unrest caused by COVID-19. Programmes scheduled to be rolled-out over the next five or ten years have been condensed to meet businesses needs. In the rush to transform, the risk of making costly mistakes rises sharply.
To help senior transformation leaders navigate these choppy waters, we recently partnered with The Business Transformation Network to host a VIP panel discussed on the subject of “Lessons Learned from Transformations Past (good and bad)”.
We were grateful to be joined by an expert panel, consisting of:
Sophie Bialaszewski – Head of People & Capability Transformation at Lloyds Banking Group
Damien Bernard – Head of People & Digital Transformation at Coca Cola
Paritosh Singh – Transformation Director at PWC
Daniel Goldstein – CEO & Founder at Elements Talent Consultancy
Also in attendance were a number of fantastic HR, People and Transformations leaders who all contributed towards the conversation, sharing their wins and their horror stories. Our sincerest thanks to all panellists and attendees for joining us and helping to make the event a success.
For the benefit of those in attendance and for those unable to join us, we have compiled this comprehensive list of reasons why transformations typically fail and how you can avoid them.
A poor understanding of the current position
All transformation programmes need to begin with a baseline. Businesses need to be clear on where they are starting from and identify where they need to get to. Failure to complete this early gap analysis has been the reason behind countless transformation failures. Without a realistic or detailed understanding of its current set-up, a business’s transformation is destined to fail.
Lack of clear objectives of transformation
It is important for a business to set clear, specific and attainable transformation goals. What is the business trying to achieve, who will this benefit and how long will it take to get there? Is the plan to reduce cost, improve customer experience or to make your employees’ lives easier?
Furthermore, how will the business track itself against these objectives? What metrics will the business use to assess the impact, and over what time period?
Poorly communicated vision and limited progress updates
Paint a picture for your people of why you’re doing this and why it is in their interest for these initiaives to succeed. Growing pains are inevitable, but by ensuring that all of your people successfully understand that these short-term pains will beget long-term gains, you’ll have more success following your transformation programme through to completion.
Obviously, you need to get your people fully behind your transformation goals. Reward and favour publicly anybody demonstrating alignment to your key primary objectives. You will learn far more about your gaps and generate more fresh ideas from your people, rather than your leaders. So keep them involved along the way, ensuring you are regularly checking in with your people, letting them know how their contributions are helping to progress the programme.
Lack of commitment to change among middle management (often external teams running the process)
Buy-in needs to come from both your people and your stakeholders. Everybody needs to be brought into a shared vision.
Ambitious plans conceived by leadership and pushed down without first building consensus are unlikely to win buy-in from the people who are responsible for implementing the transformation – and who will ultimately determine whether it is a success.
Ensure that the vision is aligned throughout your organisation’s management layers. Transformation leaders will also have to conceive of a means of measuring this buy-in from their people.
Shortage of requisite skills and knowledge to implement change properly
During the planning phase, it is important to take stock of the skills your organisation currently has against the skills that will be required to inspire and sustain any major change of behaviour. If the skills you need are absent, will you plan around this? Or will you have to hire these on a long or short-term basis?
Hiring for absent skills is no easy task. Do not skip straight to writing a job description here. Analyse the gaps and assess what skill you’ll need before outlining how you plan to bring them into the business. Ensure proper sign-off for any new positions before you go to market.
Thinking that a process that works for another company will be suitable for you
Every organisation is different. A one-size fits all approach is unlikely to translate from another business into your own. Choose tools and processes that suit your objective and your people, rather than the most flashy, en vogue solution.
For example, if you’re attempting to adopt a more ‘agile’ methodology then you don’t have to lift and shift every element of the agile toolkit. Take the components which complement your organisation and omit the rest from your plans.
Placing too much faith in the technology solution
Vendors habitually oversell their solution, and buyers need to be circumspect in how their utilisation plans. Just as, in the example above, a traditional agile process may not be the silver-bullet, an off-the-shelf vendor solution which benefitted a competitor’s business may be an active detractor within your operations.
Be mindful of the purpose behind the tools that you are implementing. One member of the panel provided an example of a business that implemented ten new technology solutions within one month, most of which eventually fell by the wayside. Without clear intent, technology is void.
Underestimating the effort required in enduring change
Finally, digital transformation is difficult and takes a long time. Indeed, transformations are a marathon, not a sprint. As such, transformation challenges will face and must endure the above challenges several times intermittently over a long period. It is attrition over the long-term that typically marks the beginning of the end for transformation programmes.
Transformation leaders must not only plan their transformation strategy, but also account for the variables that follow lengthy agendas including personnel changes, technology changes or global events. After all, who could have predicted COVID-19?