Nowadays, most established companies face the need for relatively substantial change. Their businesses are under threat from new technology-enabled innovations or intense competition is eating away their profits. Either way, we probably all know companies in such situations.
At the same time, we are highly skeptical about companies’ ability to change. We can all recall projects, which promised to “change the way we do business”, but then clearly failed short of reaching the stated goals. Irrespective of the type of project – a new process, a post-merger integration, a new business model, a restructuring effort – they all have their pitfalls. Even McKinsey found that only 26% of transformational initiatives succeeded, when they surveyed 1700 companies in 2015.
What does it take to make important, transformational initiatives successful? To reach the goals we set out at the start? Judging from my own experience and what probably most people would say – people with leadership experience and a lot of communication. But what is it that really making the difference? Recently, I got my hands on the above-mentioned McKinsey study («How to beat the transformational odds, 2015»), and I recognized some valuable patterns that combined with my own experience result in the following 8 success factors for transformational change, I’d like to share with you.
My own 8 success factors for transformational change
Systematic, rigorous and aligned approach: It takes a systematic approach to planning and leading organizational change. It requires several coordinated actions to get things going, essentially all related to communication, leadership, the people and processes. McKinsey lists 24 types of actions, of which certainly more than half are important. It may seem overwhelming, but it is worth the effort to study them to get an idea of the range of actions to be considered.
Clarified “WIIFM”: Vision and objectives for the initiative have to be detailed and formally endorsed by the top management. But that is not enough. Individuals – managers and employees – then want to know the answer to “what’s in it for me?” (WIIFM). Make tangible statements and commit to them. Remember that you are “selling” the idea to individuals, not to an anonymous group.
Sponsorship and stakeholders: Getting formal alignment and endorsement from top management, e.g. having an individual project sponsor, who personally wants the project to be a success. There are often different interests across the organization, which need to be understood and taken into consideration when setting up the initiative. Mapping and interviewing individual key decision makers and “decision influencers” is also important. Make sure you identify who is going to help or block the initiative and for what reasons. Without this step done well, the initiative is probably doomed from the start.
Communicate in planned and “responsive” manner: Leading an important initiative also means having a concept for communicating to all stakeholders. The story must be consistent and regularly repeated. Create opportunities for additional communication across teams, too. During dynamic moments, this also means frequent hands-on communication and actively seeking for questions and feedback, in order to tackle any emerging issues. “You can never communicate too much” is largely true, especially for people you don’t have personal contact to. You have to assume that 80% of your colleagues don’t read the formal "project news” properly. Offering a more personal communication works much better, also for identifying specific concerns. Hence organize enough face-to-face communication at the beginning of the initiative – it is a good investment – and follow-up periodically with updates (personal and via official channels).
Align project and individual goals: Ensure that for all project members, the project goals are aligned with individual goals. Remove obstacles in terms of conflicting objectives. If needed, add formal project goals to the annual performance management system. Practically, this means that your management may need to re-prioritize existing objectives to help the initiative.
Empower formal resources: Not just project management needs enough resources, but also all the project members. Assign high-potential individuals to lead the initiative or parts of it. Organize a common project workspace and make ongoing tasks transparent for the team. Delegate the actual change as far into the line organization as possible, so that the line managers own their part of the initiative. In my experience, this usually works, once you have been able to get the respective line management on board – once they have understood that this initiative is worth fighting for.
Share all leadership and management tricks: Make sure that managers know, what is expected of them and how they can contribute to the goals. If needed train them on how to play their part in the "change management” journey, I.e. how they can engage their teams. I always found it surprising, how little some managers know about team leadership and development (while many do an excellent job!) Don’t assume that everyone is familiar with organizational change.
Established steering process: Projects need to be held accountable to an empowered steering committee, that convenes on a regular basis (e.g. every 1-3 months). With this recurring ritual, the project’s the progress is observed, and any upcoming obstacles are identified and removed swiftly. My experience is it is important to invest this time and keep “steering” long enough until not only the milestones but also the objectives have been reached.
What is your experience? Do you have other key success factors? I hope my list will help for your next big change initiative.
Mark Albrecht is Director Corporate Development at MondayCoffee AG.