Over 60% of Transformations Fail
Large technology projects are often described as transformation projects. These projects significantly change the way organisations conduct their business and how work gets done. Unfortunately, the reality is that the success rate of transformations is less than 40%. Why do so many transformations fail? There are many common barriers to success. Many organisations have learnt to overcome these barriers and improve their success rates. In this article we discuss the top ten barriers to transformation and strategies organisations have used to overcome them.
Barrier 1: Why Change?
Change is uncomfortable. Change threatens our role, routines, work-practices, relationships, and sense of control. Our instinctive reaction is that of resistance. Organisations compound this by not having a clear change rationale or vision for the future. When the vision is unclear, people are not sure how to interpret a change in direction. No one will “join you on the bus” unless they understand why transformation is necessary. Leaders of successful transformations can tell a compelling story that describes why change is necessary, what the future will look like, and what the journey will involve. A good vision of the future has to be realistic and attainable. This vision has to be supported by clearly defined 1-2 year stretch goals and must outline the steps intended to achieve these goals.
Barrier 2: Lack of Leadership
When the top leadership team is not seen to be actively championing the transformation, the rest of the organisation assumes (correctly) that this is just another initiative. As a result, the urgency for the need to change diminishes. Sponsorship is more than just attending the kick-off and occasionally sending memos or emails about the transformation. When there is a track record of poorly implemented endeavours, people tend to not expect much when new changes are announced. Visible and strong sponsorship promotes a feeling that things are different this time. A strong sponsor will visibly support you execute change and support you when roadblocks hamper the process. S/he needs to continually offer insight and guidance to keep things moving. S/he will offer ideas to resolve issues and broker solutions when needed.
Barrier 3: We Do It Our Own Way
In transformations, while there is agreement about the vision, each leader acts independently to achieve the vision. Leaders undervalue the need for interdependence. When interdependence is not recognised between key players or groups, change in one area will often cause resistance in another area.
Interdependence requires all parts of the organisation to act collectively to achieve common goals. Each leader must support the success of others. Leaders must accept that sometimes decisions that are good for the whole can be bad for their unit.
Lack of effective leadership also manifests as lack of middle-management support. When mid-level managers are not enrolled in the change process and lack a sense of involvement and ownership, they resist collective action.
Barrier 4: Lack of a Clear Structure and Plan
The magnitude of the transformation challenge can be overwhelming for many organisations, resulting in ill-defined plans, priorities, and structures.
McKinsey recommend that leaders outline clear themes with objectives that will collectively achieve the organisation’s overall aspiration. These themes should be broken down into specific initiatives, and the organisation should make it clear how the initiatives will be sequenced and how they will relate to one another. This approach makes change seem not only manageable and realistic, but also personal and exciting.
The change program structure also needs to adjust current priorities and structures to make sure that the change program and ‘run-the-business’ activities are not in conflict.
Barrier 5: Lack of Talent or Resources
Many transformations fail, because there are insufficient resources assigned to the program. Does the program have adequate funding to deliver results? Are the right people involved in the effort? Do they have time to dedicate to this effort? Do they have the right skills and know-how? Successful transformations occur when leaders use the best talent in their organisations to carry out the most critical parts of the transformation.
Transformation is usually about changing capabilities in the organisation. Capability change means helping staff acquire new skills to complete new processes. This change needs sustained effort to be achieved. Staff need help acquiring the new skills as well as time to learn and absorb new information.
Barrier 6: Lack of Consequence Management
Where there are few negative consequences for failing to comply, people usually ignore new directives. Projects are started with much fanfare, but if there is no follow through to their finish, a legacy is then created that threatens future efforts to achieve change.
A lack of consequence management is also another problem. This is because supporting processes and structures (e.g. reward and recognition structures) are not aligned with the goals of the change program. In a well-designed program, reporting structures, management and operational processes, and reward/ recognition must be consistent with the behaviour that people are asked to adopt.
Barrier 7: Disengaged Staff
Successful transformations require strong leadership and maintaining energy for change. These features reinforce each other and when done well they enhance the success of the transformation. It is wrongly assumed that one speech from the CEO will get everyone on board. Regularly reinforcing the vision and benefits, sharing progress (and challenges), celebrating successes and refocussing on the near term goals are a key to engagement and maintaining momentum. Well-designed reward and recognition structures enable employee energy to be maintained over the duration of the program.
When information is allowed to filter down unmanaged, it often becomes diffused, less specific, and open to interpretation. This results in confusion. Employees will flounder if they face too many conflicting transformation priorities. To overcome these problems, employees need clear direction and an understanding of how they themselves can contribute to the overall goal.
Barrier 8: Lack of Planning for Management of Resistance
Transformation impacts many agendas and power structures in the organisation. This makes resistance to the transformation inevitable. When overt resistance is not acknowledged and managed properly it goes underground, creating slowdowns, malicious compliance, or even outright sabotage, especially in the early stages of a transformation. Resistance can be dissipated in a variety of ways, for instance, by removing a de-energising person, ensuring that visible successes emerge quickly, eliminating unnecessary and irritating bureaucratic nonsense (including low-priority, energy-sapping tasks), and emphasising fair processes.
Barrier 9: Fear of Failure
No one likes to fail especially not in front of their peers and bosses. This fear of failure dampens innovation, creativity, and learning. Without the benefit of learning, we lack confidence in our ability to manage change. When there is a tendency to overly punish errors or reward their absence, we are even more likely to avoid change. Creating a ‘safe’ environment allows employees to learn from their mistakes and results in them being less fearful of change.
Barrier 10: Lack of Role-models
People tend to take their cues from leaders or others in positions of influence. If the way these leaders act is consistent with the change message, they create positive role models. In many organisations, while some people champion the change, many others behave inconsistently with the change message. For example, if the change program gives greater autonomy to front-line staff, managers who make these staff justify even a small expenditure are acting as negative role-models. When there are only a few leaders ‘walking-the-walk’, implementing change becomes more difficult.
According to research conducted by McKinsey over a number of years, successful transformations involve a well defined and challenging vision for change, strong leadership from the top, a structured and planned change process, and maintenance of energy and engagement through the program life.
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