Driving Value During Organizational Transformations
A Leader’s Guide to Protecting Transformational Value Through Intentional Vision Setting and Thoughtful Planning
by Maria Connor, Laila Luopa and Will Mielnicki, Thought Logic Consulting
Organizational transformation success against intended return on investment is rare and can be challenging to orchestrate. When initiating an organizational transformation, there are many factors to consider – impacts on the workforce and external partners, process changes for improvements and efficiency gains, improved data accessibility and trust, optimization of technology, etc. While many transformations still achieve partial success, most do not realize full value.
Nearly one half of value loss occurs in the early stages of a transformation, during the vision creation and planning phases. These early phases are when you should be preparing the transformation strategy and putting the pieces in place for strong execution. Activities during this phase include:
- Describing the problem accurately
- Articulating the transformation vision and objectives
- Securing cross-functional executive sponsorship
- Developing and implementing a governance model
- Defining success, outcomes, and key value indicators
- Investing in planning and creating an integrated approach
- Planning a strategy to drive strong partnership and stakeholder engagement
- Preparing to monitor aggressively and have contingencies
- Creating an operations transition plan
Establishing target goals for organizational transformations is often overlooked due to a desire to move quickly and lack of alignment among senior leadership. However, with the increasing scale of teams involved and complexity of changes across capabilities, a clear vision is necessary to drive alignment at all levels of the organization and minimize resistance and challenges along the way. Thought Logic is often asked to assist clients with goal setting and planning for their transformations.
Recently, we partnered with a mid-sized Fortune 500 company who had undertaken a complex business transformation. Our client was transitioning to a new way of doing business, shifting its operating model from a product-focused model to a customer-focused model. This was the largest change the company had undergone in its 100+ year history. The transformation included a reorganized company structure, new centers of excellence to drive performance, integrated processes to optimize synergies across teams, and other impactful changes for their significantly tenured workforce.
As we have observed with many companies initiating a transformation, the company’s senior leaders faced challenges with clearly articulating the vision and expectations for the transformation, e.g. How will the company operate differently? What does success look like? What are the benefits for the company and for team members?
Without a clear roadmap and milestones, the company was unable to leverage the full potential of their teams’ talents. To further complicate the situation, there were few enterprise-wide communication mechanisms to create and distribute quality communications across the enterprise, and oftentimes, messaging did not reach all impacted stakeholders.
While no transformation is perfect, we believe that leaders should take the following actions to prepare their organizations for the complexities of a transformation and achieve the target outcomes and maximize return on investment.
How do you set a clear vision to drive success?
- Focus on the destination. Do not be afraid to set a bold target. When organizations set high expectations, teams and individuals strive to meet those goals. In an in-depth review of 15 transformations, organizations delivered on average 2.7 times more value than their senior executives thought possible. In fact, the most successful transformations (based on the total return to shareholder performance) set financial targets at 75 percent or higher of trailing earnings.
Create a transformation roadmap. Determine and communicate what needs to change on Day 1 and what will be changed in subsequent phases. This helps focus the expectations of middle managers and team members, i.e. what’s in and what’s not. When possible, elevate the vision to one page that highlights the target outcomes and value the company hopes to achieve, e.g. measures of success.
- Identify the experience needed for the journey. Now that clear targets are defined and communicated, identify resource skills and experience required to reach the targets. What superpowers lie within the company or your teams? Where are the gaps? Develop a roadmap that illustrates how different capabilities and teams will be engaged. Where possible, engage team members in planning and participating in the transformation. Collaboration creates a sense of ownership and can significantly increase buy-in. These team members can become the program’s biggest advocates among their peers.
- Inform the team where they are in the journey. Communicate. Communicate. Communicate. Effective communication brings employees along the change journey by helping them understand, accept, and acclimate to the new changes. Share the target state in more detail, tailor communications to specific groups, and build awareness of the transformational changes multiple times in multiple places. This helps accelerate support and momentum among the team.
The biggest concern of team members is “what’s in it for them”, e.g. how does this change what I do and make it better? Research suggests that there is a perception gap between the C-suite and others in the organization when it comes to effectiveness of communication messages. Senior leaders are nearly 20% more likely than others in their organization to believe the transformation’s goals have been adapted for employees across the organization. Communications should be tailored to various teams so that team members can clearly see where they fit in the transformation, what this transformation means for them, and what is needed from them for success.
So, let the journey begin! Remember that setting a clear vision, defining a roadmap, engaging team members, and communicating effectively are all critical pillars for ensuring that your team is strongly positioned to drive a successful transformation for your organization!
If you have additional organizational transformation questions, want more information on how to set goals or plan for your transformation, or need to get an existing transformation back on track… contact us!
Thought Logic’s Organizational Transformation Practice has a proven track record in delivering big results when partnering with clients to successfully implement organizational realignment and restructuring, mergers and acquisitions, and business direction and operating model changes. To discuss how we can help your organization, please contact Maria Connor at email@example.com, Laila Luopa at firstname.lastname@example.org or Will Mielnicki at email@example.com.