Transforming Your Business? Avoid These 5 Mistakes

corporate transformation
Posted by Scott Leavitt in Expert Insights on Sep 27th, 2016 20:24 CST

A client recently asked me a question that seemed simple: what risks do you expect to see when rolling out corporate transformation programs across a large, matrixed organization like ours?

I’ve led complex change programs across multiple industries—including pharma, insurance and data analytics—and I’ve learned, often the hard way, that there are no short-cuts to successful corporate transformation.

Fortunately, there are a set of “Laws” that can help companies avoid the most common pitfalls. They apply across all industries and functions. Though they might seem obvious (especially in hindsight!), companies tend to rediscover them over and over again, to their detriment.

They may not be as absolute as The Law of Gravity, but they certainly come close. Ignore them and you’ll find you’ve clipped your wings. Address them proactively, and you’ll be set to soar!

Here are the Top 5—and what you can do about them.

1. Implementing change ≠ realizing its strategic value

implementing vs realizing
Systems have been implemented. Employees have been told what to do. Boxes have been shifted on the org chart. The Point of Arrival has been reached… time to embrace the future!

But employee behaviors don’t change. Service levels don’t improve. Sales don’t increase. Net Promoter Scores (NPS) don’t shift.

Why? Because installing something isn’t the same thing as realizing its value.

It’s an insight I had while working with consulting firm Conner Partners. In a white paper you can access on their website, they describe the critical difference between installation and realization:

  • Installation is about placement—managing the tangible aspects of inserting a new initiative into the work environment (logistics, plugging in hardware and software, training schedules, work sessions, etc.)
  • Realization takes place when the key purpose for the entire initiative is actually achieved (confirmed cost savings, the hoped-for customer loyalty, the needed productivity gains)

Why it hurts

Imagine designing and implementing a new Sales Compensation Model… which ends up not driving the desired behaviors on your Sales Team.

Or rolling out a new CRM system, but struggling to get your sales reps to use it.

What to do about it

  • Be clear about what effective Realization looks like.
  • Give your team time to iterate—as smart as everyone is, they won’t get everything right the first time!
  • Hold your team accountable for achieving strategic objectives, and don’t disband until they are achieved.

 

2. Communication ≠ Change Management

communication

At the beginning of large transformation programs, everyone agrees that communications and change management are different.

Until it’s time to actually execute, when management tends to say things like, “We’ll just tell our employees what they need to do differently and why, and everyone will fall into line.”

I get it. It’s easier to launch communications cascades than to enable Change Ambassadors and Leaders, or identify and address the specific concerns that arise during stakeholder analysis.

Why it hurts

Imagine rolling out a Shared Services organization model to decrease costs, but watching overall expenditures on these functions increase as Business Units staff up local Shadow Organizations.

Management can communicate new organizational structures and ways of working… but if you don’t effectively manage the change, your employees will continue to depend upon their historic “friends and family” network to get things done.

What to do about it

  • It’s not enough to have a Change Management Toolkit—you have to use it! All too frequently, organizations develop the required methodologies, but aren’t willing to take the time/effort to apply them
  • You’ll still need to create and adhere to a formal Communications Plan, but make sure it’s fully integrated with your Change activities and objectives.
  • Know the basics of effective communications—and get them right. Here’s what employees need to know during times of transition, according to author Bill Jensen:
    1. Is this relevant to what I do?
    2. What, specifically, should I do?
    3. What does success look like for me? Failure?
    4. What tools and support are available?
    5. WIIFM — what’s in it for me? And for us?
  • Listen to the naysayers. It’s easy to dismiss them as malcontents who need to “get on the bus…” Actively listening to them serves three purposes:
    1. People are more likely to get on board if they feel they’ve been heard
    2. They might actually know what they’re talking about
    3. Once converted, such employees often become effective advocates

3. Business Leaders and Program Leaders Aren’t the Same People

business vs program leaders

You assign your best and brightest to the team. The big thinkers and rising stars. The “go-to people” that have effectively led their respective functions and business units time and time again.

They make promises about what will be achieved, what the cost will be, and how long it will take to deliver. Your Management Committee signs off on the recommendations, and communicates these exciting plans to your Board.

Then the time comes to execute. What could possibly go wrong?

It’s not a question of intelligence. It’s a question of having the interest, experience, and time to drive the work that’s involved in project and program management. The detailed planning. The coordination with other projects and functional support areas. The issue identification and resolution. The tracking and reporting. And so on.

If you don’t have the right project/program management resources and governance in place to support your business leaders, you’ll find that these critical tasks are shortchanged.

Why it hurts

Business Leaders tend to jump into execution without adequate project planning, which leads to poor coordination across projects and missed delivery dates.

Or they make assumptions without consulting appropriate Subject Matter Experts (i.e., how long it will take to launch a new system or stand up a new department), which leads to impossible-to-meet project plans, conflict across projects, or suboptimal deliverables.

What to do about it

  • Depending upon the size, complexity and duration of the project, consider investing in a dedicated Program Transformation Office.
  • Provide seasoned Project Management support to Leaders—support that goes beyond creating and updating work plans.
  • Implement appropriate Program and Project governance, including clear definitions of Executive Sponsorship.

4. Good intentions don’t ensure good communication

communication

Chances are, people know who they should be consulting with about key junctures within their projects. They’re not purposely hoarding information. But they’re busy—doing their day jobs, running their own projects, being swamped with emails/meeting minutes/status reports. If you don’t have a strong program in place for communications and collaboration, good intentions won’t be enough.

Why it hurts

You’ve documented roles and responsibilities and distributed meeting minutes… but people still claim they didn’t know.

Or you watch as key decision points come and go without the involvement of key stakeholders, leading to suboptimal decisions, poor buy-in, and delayed implementation.

What to do about it

  • Hold regular “Round-Robin” project leadership updates.
  • Schedule periodic “Speed Dating” meetings with project leaders and Subject Matter Experts.
  • Create 1-page project summaries that are geared towards executive-level communications. Ideally, these summaries would be generated by your Program Management or Business Transformation Office. Most useful, I’ve found, are 4-section reports that summarize:
    1. Key milestones
    2. Recent and upcoming accomplishments/key activities/decision points
    3. Issues and mitigation plans
    4. Key Performance Indicators

5. Silence Does Not Imply Agreement

silent disagreement

Employees are sitting in a large room with their peers, managers, and their managers’ managers. They’ve heard rumblings of upcoming changes, but this is the first time they’re hearing specifics… and they are still not sure how it affects them. After a slick TED-like PowerPoint presentation, the CEO asks if they have any questions or concerns. Silence.

After the meeting, as employees head back to their desks, the rumbling begins. But there’s no avenue for employees’ true feedback to be effectively gathered, codified, and reported back up to management, so it remains just that… rumbling.

Why it hurts

Have you ever seen your Sales Execs agree upon the value of new offerings… but stall when the time comes to pick up new sales targets?

Or hear your manager tell you that her peers think you need to postpone your launch date due to other priorities or issues that their employees are now raising, and that haven’t been addressed yet?

What to do about it

  • Practice Active Listening in safe environment (i.e., 1:1 vs group setting, local Change Ambassadors).
  • Seek out, listen to, and respect dissenters. Employees WILL look to see if these folks are accepted/celebrated or negatively labeled.
  • Accept anonymous questions during Town Halls… and address them to the best of your ability (even if the answer is “we don’t know yet”).

This article originally appeared on LinkedIn.


Scott Leavitt

Scott Leavitt

Scott Leavitt brings over 20 years of hands-on experience growing and transforming organizations to effectively execute global strategies. He's helped BTG clients coordinate complex, cross-functional programs and align transformation programs with topline strategic objectives.

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