As the well-worn saying goes ‘change is the only constant’. We’ve all seen enough of that lately to be convinced. Things change, and we have to adapt, embracing new ways of thinking and working to stay successful. Businesses need to be constantly evolving to meet the shifting demands of the marketplace. Good leaders will be deliberately managing change every day. But sometimes we need to transform, and that is something else entirely.
Just about every major company you can think of says it is involved in a ‘digital transformation’. But only a small proportion will succeed. Transformation work is not about improvement, seeking efficiencies or implementing new evolutionary ideas.
Transformation is about ripping everything up, questioning all we are used to, and starting again. In an established and functioning organization it is counter-intuitive, deeply uncomfortable and extremely challenging. It is like changing the engines of an airliner in mid-flight at 35,000 feet.
Embarking on transformation work is a recognition that the existing hierarchy, organization and leadership cannot deliver what is now required. The organization was set up to do something, and has become large and successful over many years. It is established and solid and the executives know how to navigate it - but now something else is needed.
This is the great challenge faced by companies that realize that they need to become digital to stay competitive. How do we do what we’ve always done but in a completely new and different way? And quickly... aggressive and agile new digital competitors are taking away our customers and threatening the business right now.
Transformation work requires new priorities that challenge everything that we are used to:
- Creation of cross-functional outcome-based executional teams, or coalitions, made up of the best individuals from across the company. No respect for existing organizational hierarchy, seniority or reporting lines and a distraction from established day-to-day operations. Top talent moved away from their usual work, and asked to directly question what they normally do, and think.
- For leaders responsible for maintaining the existing legacy core business the new digital approach can seem at best threatening to what they do, at worst like yet another competitor. The declining core business represents security and familiarity for everyone involved. The transformation work throws all that into question, from the inside. Some threatened managers may even try to slow down or hamper the transformation work to defend their own power-base. They will say they support it, but they don’t - they are scared of it.
- Transformation work must be sponsored vigorously and visibly from the top by the CEO, or it is doomed. The CEO must navigate a schizophrenic pathway of maximizing the defence of the legacy business, whilst actively supporting the new and threatening transformation work. The strength of purpose and skill of the CEO to balance these two diverse challenges is probably the key to success or failure. If the CEO doesn’t really believe in the transformation, it will fail.
Change is hard. Transformation is really, really hard and much more likely to fail than succeed. 84% of digital transformations fail*. To be in the winning 16% you need a rock-solid vision, an iron-clad resolve and a military-style plan. And exceptional leadership.