July 2020
3 minutes

Why Transformations Fail

Leaders Should Be Aware of These Risks

Taking the organization through a phase of change is one of the key tasks of leadership. (Image: Rawpixel.com/shutterstock.com)

Nearly every organization faces immense strategic challenges that put the fundamental mission, identity, strategy, organizational structure and business model to the test and initiate transformation.

However, many transformation efforts remain ineffective. And often not because of a flawed strategy, but because the change does not get anchored in the organization sustainably.

Taking the organization through a phase of change is one of the key tasks of leadership. In an increasingly uncertain situation, this task is greater than ever: different generations of employees have different requirements, professional contexts are becoming more complex and the speed of change is increasing.

This is exactly why it is necessary for leaders to know the main risks that have already sabotaged many transformations. We have identified the following 6 risks:

  1. Paralysis by Analysis
    The importance of data and analysis for the planning and implementation of transformation programs is not to be questioned. They provide an objective view of the current situation and serve to support decision-making. The pure gain in knowledge is tempting. It creates the feeling of penetrating the problems without actually solving them.

    Transformations thrive on measurable, at least assessable results that get us closer to the goal which have been developed by the employees themselves. Results are tangible and real when the employee at the CNC milling machine has the feeling that something has improved.

    Letting go control and trusting in the employees' ability and willingness to change are key to come to first changes quickly instead of spending months on fruitless analysis activities.
  2. Insufficient Attention Is Paid to the Individual Employee in Communication
    It usually takes a few months from the top management decision to the first employee information. Managers have a head start in terms of content and time to familiarize themselves with the intentions and consequences of the transformation and to prepare themselves emotionally. They often underestimate the importance and effects of this advantage. While the manager is already planning the next initiatives for Q3, employees have usually not yet digested the many activities and announcements from Q2. Here it is important to pick up every single employee in his individual situation with his skills. With openness, patience and transparent framework conditions you provide the necessary stability and orientation for your team.
  3. Unclear, Disingenuous Information
    To trivialize facts is counterproductive. The employees usually know exactly what's going on.The key question is: "What is the situation we are really in as a company?" The answer must be crystal clear, honest and comprehensible. The best way to dispel concerns and take away fears is open and honest communication.

    Convey adesirable vision, set clear, understandable goals and give comprehensible reasons for the necessary change. Precision of language is essential here, which is why a "corporate language rule" can be a barrier. By translating into the respective national languages and communicating at the appropriate level, you avoid any room for interpretation of the reasons, purpose and goal of the transformation. Knowledge about the real problem and the prospect of success creates trust and motivation to participate, at least not to block the change.

  4. Managemennt Is Only Half-Heartedly Behind the Change
    "Quickly make the decisions at the formal level capable of consensus and then informally question them at length," Peter Kruse said ironically. Anyone who has thrown themselves into new projects with a great deal of commitment and work, projects that ran aground or ended up in a drawer, reacts with scepticism and restraint when it comes to new changes. Such doubts can only be dispelled if the (top) management seriously and permanently stands up for change and forces it.

    In critical phases of transformation, sometimes difficult decisions have to be made, which can be painful for the company. People tend to take the more pleasant way and to make compromises too quickly, to commit themselves rashly to something in order to avoid confrontation. In the end this always means the greater evil. Make it clear to everyone involved that there must be no "holy cows" and no way back to old patterns.
  5. Actionism: Everything at Once, but Quickly!
    No matter how good the plans are and how much you want to achieve – if everything is equally important, nothing has priority. Actionism leads to disorientation and excessive demands on employees, signals helplessness and reveals management's weakness in decision-making.

    Take the needed time to plan the right things. Plan, lead and control the transformation as real program with firmly defined standards of program and project management and stick to them – and don’t let up sticking on them.
  6. „Never-Ending-Story – Transformation“
    The desire for constant optimization is part of our spirit of the time. It is correspondingly difficult to consciously break away from this ideal and accept "optimization-free" times.

    We humans are always searching for stable conditions. A state of permanent or long lasting change leads to disorientation, frustration and weakens the employees' trust in the management. Therefore, transformation projects must be finite: Define a clearly described and understood target state and a target date. Time is a critical success factor – the shorter the transformation, the better.

    The prerequisite is that managers can get away from the idea of control and regulating to a certain extent. It is about consciously engaging ourselves into a phase of transition and instability. We need to do that with a committed goal of achieving a desirable next higher and perceived stable target state. In doing so, we must be aware that we will not be as efficient and performing for a while as we were before.

Conclusion: Proper Leadership Is the Key to Transform

One key to successful and sustainable transformation is the proper leadership. Active support, motivation and loyalty of employees in difficult phases cannot be planned and certainly not pretended. You have to win them over – and that can only be done through proper and good leadership. In each case adapted to the current phase of the company and the employees – situational, authentic, personal, inspiring. Managers will have to get involved in open-ended processes where they do not know exactly what will come out in the end. This also means we need to find the right solutions together with our employees in a collaborative way. And all that without losing sight of the goal and by respecting the set boundaries.

In part 4 of our series on the topic of transformation, we will have an interview with interesting personalities whose destiny it is to make family businesses "suitable for the grandchildren" through digital sovereignty.

Yours, Tanya Quijano & Ronald Herse

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