Effective Business Transformation
by Steve Brookman
Much has been written about the challenges of transformation. The greatest challenge is not just in understanding the requirements of the business; it’s not just in developing a strategy for implementation or in only recognising the challenges to implement the strategy – it’s in the physical implementation of the plans that will take a company into new markets, or to address new market pressures.
To achieve their objective, companies will need to demonstrate and prove their in-depth capability to deliver the Transformation strategy. This is a hurdle to overcome because it will require greater leadership vision, drive and expertise, and the support of a highly skilled and knowledgeable management team to deliver. Michael Hodge, Professor of Psychology at Yale University once said:
“Transformation is about fundamentally rethinking and reconfiguring the workforce and its practices, built around the concept of a partnership between provider and consumer that involves shared decision making about needs and wants”.
There is always an imbalance between needs and wants. The Companies leadership has to balance the needs of its market and their company, whilst addressing the market perception ‘of what the market wants’ – and this is probably the most challenging element of all. Perception is reality and if the markets think that you are failing, then sadly you are, irrespective of how good, efficient and well managed you think you are. So communication – dealing with perceptions and with the complex agenda, will require effective marketing, and evangelising will need to be a key element throughout all competencies within the process. The company doesn’t just need to be good, the market has to AGREE that it is good.
Many see reorganisation as the only answer to most situations where an organisation is seen as underperforming. On the basis that in the minds of some managers, activity equals progress, they see reorganisation as ‘evidence’ of their hard work and understanding.
“We trained hard…but it seemed that every time we were beginning to form up into teams, we would be reorganised. I was to learn later in life that we tend to meet any new situation by reorganising, and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency, and demoralisation.”
This sounds like something that could have been written yesterday. In fact this was written in circa. A.D 60., by a Roman courtier called Petronius Arriter…how little things have changed!
Reorganisation seems to come as the answer to most business challenges and most managers should relate to this sentiment as year after year they are pushed to reorganise, yet again, in a futile attempt to improve the performance of their business, and to meet the ever increasing demands of both their employer and their customers. In reality, of course, reorganisation has a key part to play, but only if it is done for the right reasons and in the appropriate way.
Most of the textbooks on business management suggest that there are two key ways to transform a business: one is through evolution and the other is through revolution. Evolution generally will take a long time whereas revolution on the other hand whilst being much faster, has greater risk and is generally very painful and disruptive. What is needed is activity that transforms the Business from what it is – to what it should be – seamlessly and as painlessly as possible.
There are clear leadership challenges in building something from scratch or transforming something that is failing to achieve the success that is expected. The latter recognises that many systems, processes and resources are already in place many of which will be unsuitable for what is required. Above all of these, and arguably presenting the greatest hurdle of all, is redefining and evolving a winning culture that focuses on success and delivering good services.
The opportunity to create something substantial should excite all dynamic leaders and managers, but the question is how to create this ‘new world’ without destroying the elements within the business that are already recognised as good, and finding the leadership talent capable of leading the business into the future.
Business Transformation Requires
- Clear understanding of the key objectives and business goals, with strategies and plans that underpin the overall business objectives
- Dramatically changing the structure of the organisations human capital
- Ensuring the right people, with the right skills are doing the right job
- Delivering current and future products and services as effectively and efficiently as possible
- Aligning service delivery closely with customer outcomes
- Re-evaluating who does what, and at what levels, to maximise cost effectiveness and performance
Whilst this doesn’t sound too taxing on the surface, the reality is that in order to achieve the transformation there are many obstacles that will need to be addressed.
Workforce Transformation Requires
- Changing traditional ways of working and challenging entrenched professional and producer interests
- Reviewing established relationships, activities and processes
- Creating new roles or reconfiguring existing teams
- All of this may need to be accomplished at a time of reduced funding, particularly if there is an active programme of cost reduction
Like all good initiatives, success depends on the development of effective plans, ruthless focus on doing the right things (not just doing things right), and rapid but controlled and monitored implementation.
Generally there are seven key elements that need to be addressed to ensure effective transformation with the simple philosophy that: ‘you can’t plan for everything, but you can be ready for anything’.
- Dynamic leadership and management skills MUST be in place at the beginning of the Process, with comprehensive, evidence-based transformation plans which must take into account the risks, and are flexible enough to adapt to unforeseen circumstances.
2. The legislative and regulatory framework must allow for the necessary changes to take place.
3. Resourcing plans and relevant documents must define how the changes will affect both individual employees and teams. Plans need to be in place to address issues, and support individuals affected by the change.
4. Organisation Design (OD) and effective training and development plans need to be in place to address the new ways of working.
5. An effective communications strategy needs to be in place along with engagement plans for the different stakeholders and partners, throughout the transformation process.
6. Methodologies and processes need to be understood and in place to allow for proper evaluation and review as the transformation evolves. Key Performance Indicators (KPIs) need to be focused on service delivery, clearly defined, effectively managed and regularly monitored and updated.
7. Key leadership, Governance and management skills, with supporting resources, systems and processes need to be aligned and focused towards common goals.
Effective planning and implementation is at the heart of achieving successful transformation.
Moving fast doesn’t always mean getting there quickly. Moving slowly doesn’t always mean getting there safely. A clear objective but with no clear route plan may mean not getting there at all. A great route plan with no clear objective may be a waste of time and energy.
A well defined, and clearly understood objective, pursued with a great route plan, and executed at the right pace, will always provide the most successful and rewarding outcome.
It is generally agreed that there are four key elements to successful transformation: creative leadership; commercial management and knowledge; communications; the implementation of systems processes and governance. However, we must first recognise the key difference between leadership and management.
Leadership focus vs management focus
It is sometimes difficult for people to truly distinguish the difference between the required skill sets and talents for leaders and managers. There are many exceptional managers who lack the leadership skills and ability to be truly inspirational, and to take their organisations forward to success. Good management is about keeping systems and processes running efficiently – in many cases it is simply about maintaining and developing the status quo. Leadership on the other hand is about creating it, developing it or changing its direction. It is a common assumption that a person who has leadership skills will also have management skills, and whilst they do work side by side in practice, they are in fact conceptually distinct.
Leadership factors are related to a transformational style that inspires both individuals and the organisation to become proactive and to achieve beyond expectations. Management competency factors are generally related to a transactional style that provides rewards for dependable performance, against specified objectives. Clive Woodward the Rugby World Cup winning coach of the England team summed it up when he said,
“I’ve never seen any team of people succeed without an effective influence at the helm”.
In order for companies to transform under the guidance of a creative leader, there needs to be a well structured, and tightly managed team of managers working and directing the transactional elements of the business. The management team will be made up of dynamic individuals who combine technical expertise with a clear transactional management style. It is also vital that the team is balanced with complimentary skills focused on ‘doing the right things’ as well as ‘doing things right’. To draw an analogy: most people recognise that even if a football team had the best 11 goalkeepers in the world on the pitch, they would probably still not win their games.
Great leaders transform organisations through drive, personal resilience, innovation, and entrepreneurial flair. It should be recognised however, that their efforts may become less effective, or even fail, if they overlook the transactional aspects associated with effective management.
Effective execution of corporate leadership combines the transactional managerial elements of analysis, communication, interpersonal sensitivity and structured implementation. The building of an effective team relies on the leaders ability to harness the skills of his or her management team to achieve the clearly articulated and understood corporate goals.