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Lessons in Organizational Transformation

Categories: Management

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Many businesses come to the realization that there is a tremendous need to change how their organizations operate. For more than a decade, there has been a significant amount of both theory and practice surrounding organizational change. While many organizations have spent time creating and implementing change programs, very few have truly confronted reality and moved to a more broad-scale organizational transformation.

Organizational transformation is a fundamental change in the mindset of an organization. It is a point when the organization must leap from its current trajectory in order to capitalize on a new ideal. Transformation is required when an organization meets one of two criteria:

1. It has lost its way and faces irrelevance by way of new entrants in its markets or new technologies that render its own obsolete.
2. It sees a new, untapped potential in an adjoining space or industry that requires a significant investment of time, effort, and resources, but will drive the organization to new heights in the end.

The transformation process in not an easy one—and many organizations do not have the stomach for it. However, with the help of a mission-driven leader, an aligned group of top managers, and an engaged workforce, transformation certainly is possible.

Why Transformation?
To understand the fundamental difference between organizational change and organizational transformation, one must first understand that there is a ladder that highlights the degree of change. This ladder is built upon two components: 1) The depth of change and 2) The speed of change. Primarily, there are three major points on the change ladder:

1. Incremental change. This includes daily modifications that, over time, produce evolutionary change as long as focus and direction remains constant.
2. Transitional change. This is when a relatively clear “new state” is planned for and executed over a certain transition period.
3. Transformational change. This is change in the very fabric of the organization where degrees of change assume that certain people, products, or strategies are sacred. Organizational transformation seeks out the most effective future for the organization.

The Role of the Leader
It is very rare for an organization to suddenly find itself in a position where it must fundamentally reinvent or transform itself. It is even rarer for a leader to know when their organization is at that point and to have to have the skills and courage required to make the tough call to move the organization in a new direction.

As a leader, or leadership team, once the choice has been made that the organization must move in a new direction, it is important to understand that their role is not to push the operational side of the transformation; it is to move the human side of the transformation. The true role of the leader is to align and motivate their people to see the need to change and to provide whatever is required to get the job done.

Leading an organizational transformation process is one of the most difficult aspects of leadership. Constant feedback from trusted advisors is required to avoid these three common pitfalls:

1. Heroism with no message. Communication is vital to the success of a transformation process. You may sense that transformation is required, however, if the leadership is unable to provide a concrete premise. In that case, support for the need to transform the employees’ efforts will be misguided, and the transformation process may fail.
2. Optimism with no credibility. Too many leaders have fallen victim to the “flavor of the month” change initiative. Credibility in this area can be compromised easily. If there has been a number of failed change programs in the past, the leadership needs to admit the faults. The tone and the approach must be changed and the right team should be built to win back the hearts and minds of employees.
3. Determination with no support. Leaders must understand that an organizational transformation process requires support from each and every employee in order to succeed. It cannot be accomplished alone and if tried, the leadership may eventually burn out leaving the company in an unfinished state or the completed transformation effort may lack buy-in from the employee population, causing it to unravel.

Support From Top Managers
In order to successfully navigate an organizational transformation initiative, it is imperative to have the support and buy-in from top managers. Failure to get the support and buy-in from these critical leaders will result in a failed process. Both incremental and transitional change processes can survive with only partial or delayed acceptance.

By their nature, transformation processes are based on a precise window and require full and swift acceptance. Therefore, it is of utmost importance to have the full support of the organization’s top managers once the need to transform has been identified. Ensuring alignment and open communication will help the process move at the appropriate pace in every department or region in the organization.

The leadership must get support by involving all critical top managers in the initial stages of the transformation. Encouraging candid input and delegating appropriate levels of responsibility will not only give these managers the voice they deserve, it will foster personal pride in the process across the organization.

Organizational transformation can be a fearful endeavor. Make sure the organization seeks out and deals with each of these three human issues:

1. Cynics. While it may seem that there is one in every crowd, more often than not, cynics simply need reassuring. The leaders must seek to understand their concerns and involve them in the appropriate action to ensure the transformation’s success before their misguided attitude spreads.
2. Silos. Organizational transformation will very likely create new organizational structures, reporting lines, and resource allocation. It is human nature to protect one’s turf; silos often rear their ugly heads when transformation is at the gate.
3. False promises. With the amount of work involved in an organizational transformation, leaders need to be on the lookout for managers who agree to the transformation in meetings but quickly back pedal when the going gets tough. One break in ranks can have a ripple effect.

Land of No Return
Organizational transformation is a fundamental, irreversible change. If the transformation process is well executed, the genetic code of the organization is rewritten and the organization surges forward. However, an organization may not tie up every single loose end, which may lead to a partial or full reversal of the transformation.

Every effort must be made throughout the transformation process to communicate the fact that the future state of the organization will be worth the effort. And once the organization gets there, there should be no need, want, or desire to return to the previous state.

Common Pitfalls
Organizational transformation is not a quick, one-time fix; it is a fundamental organizational lifestyle change. It requires commitment, discipline, and unflappable will to succeed. An organization’s leadership must be prepared to help employees overcome these roadblocks:

1. Nostalgia. There is comfort in the past. Transformation brings a number of unknowns, which can be intimidating to some employees. While there is no certainty either way, communication and resolve will help these people move forward.
2. Fatigue. Change programs are easy; transformation takes time and energy. Throughout the transformation process, employees should be monitored for signs of fatigue. Organizations should find ways to help employees recharge and get back to the task at hand.
3. Subversion. People fear being changed. When the going gets tough in the middle of a transformation effort, there are those who withdraw from the process and others who actively find ways of derailing it. These individuals must be dealt with quickly before time and resources are lost.

The saying goes, “If you don’t like change, you’re going to like irrelevance even less.” If an organization finds itself in a situation requiring a fundamental transformation, action must be taken. It’s a tough decision, but one that has to be made for the betterment of the organization for the long term. The underlying key to success once the decision has been made lies in the leadership’s ability to effectively deal with the very real human issues that will inevitably show up along the way.

About the Author.

Doug Williamson is CEO of The Beacon Group, a Toronto, Ontario, Canada-based firm that specializes in organizational transformation, effectiveness programs, talent identification, and leadership development. To learn more, visit Williamson’s Web site at www.dougwilliamson.ca or e-mail him at [email protected].