Failure to Launch - A perspective on the transformation initiatives

We increasingly find all CEOs saying with even more emphasis in this VUCA world that the "Only constant is CHANGE". This coupled with the reality that if you don't transform or reinvent yourself in what are increasingly turning out to be shorter and shorter business cycles, you will either get disrupted or become irrelevant. Increasingly, TSR and company valuation/ stock prices are linked to that ability to transform and reinvent a firm with innovation, and smart and quick execution.

Take the example of Kodak in January 2018. The announcement and pivot for Kodak to become a technology company that is anchored in Blockchain technology to solve the rampant issue of licensing and copyright of photography and also start its own cryptocurrency Kodakcoin as means of immediate payment, resulted in its stock rising by over 220 percent in 2 days. While that may clearly be a short-term over-reaction, it tells you how investors value the ability to transform and the right time and speed of doing it. Credit to Kodak for being one of the first companies to use Blockchain or distributed ledger technology in photography copyrighting and licensing. 

That said, the corporate and business world is littered with examples of failed transformation initiatives and consequent learnings are well documented as well. Research shows some are, for example, misunderstanding the strategic business need and operating model implications, operating culture challenges, over-rotation on technology/system outcomes rather than business or customer outcomes that the technology is being used to drive.

But unfortunately, failures are still the predominant outcome of transformation initiatives. 

So let's examine a few critical pieces of the puzzle that, if followed, will help us to ensure we build safety nets to prevent failures during such transformation.

1. Establishing the 'need for change'  from a 'What's in it for me?' perspective from a customer and employee, and linking that clearly to the business need or operating model realities. Follow the "employee needs hierarchy" while designing the project and communication plan. Very few transformations would not impact operating and governance model. We have to be deliberate about understanding those implications and build change and contingency plans around them. Also actively look for and plan for the impact on the operating culture i.e. how work gets done in an organization or how information flows, decisions are made, what the typical speed of execution is etc. 

2. The transformation execution team has to be small, agile and empowered to take calls even if there is a risk of them being wrong as long as the issues can be corrected. Successful transformations don’t always lend themselves to bureaucratic or democratic decision-making and consensus-led change. Yet the execution team has to be balanced and cutting across key impacted stakeholders be it the customers, employees, functional leaders, even partners. This is critical for the transformation being seen and actually felt as being DONE by the stakeholders rather than HAPPENING to them.

It’s typically a death knell for transformation success, where stakeholders feel as if they are victims rather than empowered executors of the transformation.

3. Remember customers, stakeholders and employees buy and get behind "experiences", not products, services or value propositions. Any transformation HAS TO focus on how it's improving or radically changing the “convenience” & “experience” around the facet of business that you are trying to transform. Always take the outside-in view on the “why and how” of the transformation as equally if not more important than inside-out views. Taking an only inside-out view of the need for transformation and 'what's changing' due to the transformation is normally a sure shot recipe for a failed transformation. Be especially careful or large technology transformation/implementations as they often suffer from an ONLY inside-out and myopic technology reasoning but not the business reasoning for the change and thus fail.

4. Use "virality" as a bedrock of adoption which means that any transformation-led initiative should make life easier, faster and/or more convenient in the medium-term. Word of mouth adoption or implementation/growth is the best foundation that you have to focus on laying down first. Then supplement that with a mandate to adopt the transformation, by removing optionality for e.g. usage of say an old system/process, tech platform product variant or operating or governance model. Lastly, give a 2-3 months overlap between old and new operating realities/systems/processes/technology etc. for testing and ironing out operational issues. It also allows impacted parties to have adequate warning to help prepare for the impending change. 

5. Be deliberate about assuming, anticipating and planning for a lot of "pain", derailments and resistance during the change and transition. Big bang approaches seldom work. Phase your change and always run a pilot with departments or segments that are key constituents, ideally small yet high profile enough. Always apply the minimum viable product (MVP) principle on the transformation execution and modify as many pieces as necessary, if it's not working. This doesn't mean you have to be slow in execution. You can and should just be deliberate but yet reasonably fast in execution timelines. And don't let perfect be the enemy of the good.

6. Recruit transformation “Evangelists” from the community which the transformation is impacting, in addition to the top leaders. These evangelists should be credible and ideally opinion leaders. Remember, for example, employees tend to believe what their managers say and customers believe what other customers they trust, say. Then leverage the evangelists and the corporate communication machinery to focus on over-communicating both the logic and realities of the transformation and the change it implies. But again, from a stakeholder 'what’s in it for me' perspective for all impacted parties. 

Finally, remember there are no legacy “holy grails”. And keep things as simple as possible. So challenge status quo and question the need for every process, operating model aspects, governance protocols, approvals etc. Change or scrap them unless they pass the ease of experience, virality, and new operations model/strategic business reality alignment test. 

A great tool is to ask the “5 why's” * on each initiative for root cause and plan accordingly.

In closing, I would aver that following the principles outlined above (and if thought through and applied to a particular organization’s context and not generalized) will allow an organization to greatly increase its probability to succeed in any transformation initiative. 

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* The 5 whys for Startups by Eric Ries