Value Partnership is in the business transformation business. Over the past 20 years and more, our consultants have worked with directors and senior managers in more businesses than many readers of this article have probably had hot dinners. Now that a new wave of transformation in business models is sweeping through many of our industries, it’s worth reflecting on what we’ve learned about how to anticipate which of these transformations are likely to be successful.
Here’s something that’s powerfully struck us: business transformation by definition must be a transformation in the way the organisation does its business, as well as a step-change in the results it achieves. If this is so, then it seems obvious that the people who manage and deliver the business must significantly change their roles, ways of working, behavior, mindsets and even values.
Let’s repeat this for emphasis: business transformation IS fundamentally about what the people who work for the business do and how they do it.
Change and improvement in market capitalisation, sales and earnings are all the outcome of the contributions of people.
But whose job is it to lead transformation of a business? Obvious answer: the directors and senior managers of the enterprise. This is where the ‘buck stops’, as the Americans would say.
And here’s where a black hole starts to become apparent. In too many cases we have seen, there’s a major gap in this leadership at the top. Here are some situations we’ve encountered:
So, how might we know that any of the above are likely to significantly reduce the chances of success of your business transformation aspirations? Here’s one example:
The new CEO had an appetite for growth, and the personal energy and presence to drive for changes, being described as having ‘a huge brain and an ego to match’! He approved massive investment in a strategic review, a new business strategy, and external and internal communications for ‘getting the transformation message out there’.
Yet discussion with senior managers found them without any sense of leadership or ownership of the transformation effort. They privately described their fears: loss of the proud history of the firm; uncertainty about the business’s and their own futures; loss of their own status, power or influence; exposure of skill and competence gaps. Publicly they ‘leaked’ their ambivalence about the opportunities that the transformation promised….and this was dangerously contagious in their own teams.
They found it impossible to ‘speak truth to power’ in the face of relentless top down briefings, blogs, webinars and constant demands to drive for results. They felt that there were no opportunities to build dialogue to engage them, and their own teams, in the kinds of challenge and support that gain and build commitment. Many commented on massive increases in personal stress, and the impossibility of saying ‘No’, and a lack of pausing for breath, reflection and learning.
The result: not surprisingly, senior managers were keeping their heads down and avoiding anything that felt like a risk. Structural changes were happening around them and change was ‘done to them’ not ‘with them’…and good, talented employees were starting to look elsewhere to develop their careers.
Suppose you also knew that the CEO had no plans for dealing with this situation, and no previous experience of leading a successful business transformation?
What would you reckon to be the chances of success in this organisation . . .?
If your business is on the transformation journey, perhaps it’s time for a pause to consider the state of commitment, engagement and competence in your leadership team and in your organisation as a whole:
1. Are you working diligently to ensure that people in your business see their leaders as shaping and guiding the company’s mission and vision?
2. Are you consciously building their trust in those who are in leadership positions and their belief that leaders have the success of the enterprise at the forefront of their effort?
3. Are you ensuring that people are clear about their roles in making the vision happen?
4. Do the people who work for the business experience your communication as dynamic, courageous, and authentic? Do they see it as building dialogue and surfacing assumptions, through acute listening and willing learning?
5. Are you supporting staff with learning and development opportunities and with time – with coaching as a non-negotiable part of everyone’s leadership role?
Nickie Fonda & Lynn Lilley