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Transformation Programmes: Why Only Some Succeed and Most Fail?

by Marek Danyluk

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Ellen Glasglow once said, “All change is not growth, as all movement is not forward.” While transformation projects have been largely lauded by senior executives and corporates, the reality is reflected in its numbers. According to a study done by the Boston Consulting Group, 75% of transformations ultimately fail. In fact, such high failure rates have stayed constant since the 1970s. Evidently, transformation programs have either been inadequately implemented, poorly understood, or fundamentally wrong for the company. According to the Harvard Business Review, it is plausible that “the content of change management is reasonably correct, but the managerial capacity to implement it has been woefully underdeveloped.”
 
In this article, we will examine three factors which are critical to the success of a transformation programme. 
 
1. Employee Engagement 
 
Traditionally, any new announcements from the company will usually come from the top management. This can be typically done through town hall meetings, web or email announcements. Unfortunately, such communication tends to be one way despite the perceived “interactivity” of such media. As such, it results in an assumption that everyone in the company is on board with the vision of the company.
 
A study by McKinsey has shown that the rate of success of a transformation program increases when more frontline staff are involved in the process. Employees will feel a greater sense of ownership when they are part of the team driving the change. At BP, a comprehensive training program allowed frontline leaders to make critical decisions relating to the program. According to the McKinsey study, this programme is now one of the highest rated of its kind at BP. Ultimately, the value of any transformation programme is only realised through the collective actions of the employees responsible for the design, execution and application of the changed environment. 
 
In addition to engaging employees, companies should also be wary of allocating secret teams which work in isolation. Not knowing is sometimes worst than knowing too much. The lack of information ignites curiosity and allows rumours to proliferate amongst the ignorant. It also tends to distant disengaged employees who will eventually feel like they are not part of the team. 
 
2. Managing the Leadership 
 
A key success indicator of a transformation programme is a compelling story which is consistently told by the key executives of the company to internal and external stakeholders. The problem with this “ideal” indicator is that it relies on the assumption that every person in the senior management is the same - i.e. they share the same vision and they walk the same talk. However, in reality, each executive and each change manager is different and each of them has their subjective views and biases towards the transformation programme. Whilst this may not be apparent in a company-wide announcement, it is detectable through the actions of each individual in their daily interaction with their subordinates. 
 
Leo Tolstoy, a Russian novelist once wrote, “Everyone thinks of changing the world, but no one thinks of changing himself.” Organisational change is not mutually exclusive with individual change. As such, transformation programmes need to steer the focus towards helping leaders and key executives understand their personal motivations and inner drives. This will eventually help these key personnel understand and explain the compelling story of the change program. 
 
3. Resistance 
 
Resistance is an inevitable consequence of any transformation programme. Resistance can materialise in three main ways: First, cognitive resistance occurs when one perceives how the change will impact on an individual’s ability to voice their ideas about change. Second, emotional resistance occurs to employees whose personal beliefs and values are deeply entrenched and aligned with the organisation. Any attempts to change will result in inertia. Third, behavioural resistance is a combination of cognitive and emotional resistance and results in actions such as the creation of rumours or sabotage. 
 
Whilst resistance is certainly not an encouraging sign, it can be used to the organisation’s advantage if managed effectively. Resistance also provides change managers the opportunity to resolve divergent views and potential misunderstandings. Overt resistance can also be countered by different methods such as removing a de-energising person, emphasising on fair processes as well as eliminating unnecessary tasks. 
 
Speak to our consultants at Space Executive if you would like to find out more about opportunities in transformation and change management.