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Transformational change – how to make it happen

Business Transformation

We hear the term Transformation a fair bit, especially in business. It’s a term often used to describe a large programme or project. It can involve anything from re-engineering business processes, centralising activities into global hubs, re-organisation or implementing some new technology.

But is that really “Transformation”? Or are we just doing what we do today only better?

Of course, it’s a matter of perspective but, whilst these may be very large changes involving maybe thousands of people and costing tens or even hundreds of millions. I’d argue that many of them are not so transformative.

To truly transform oneself, we need to become very different at a fundamental level. Think of the synonyms such as metamorphosis, transmutation, renewal. Commonly used definitions in business suggest that a business transformation would involve least 40% of what a business does being completely new or at least unrecognisable compared to the past.

An HBR article in 2019, The top 20 Business Transformations of the last decade sets out some great examples such Danish Oil and Natural Gas, who “slid into financial crisis as the price of natural gas was plunging by 90%” changed their business from “black to green energy”. Other examples include Netflix, Amazon and Microsoft. In all cases, transformations that speak for themselves.

And the point of this distinction?

Many of the tools and approaches normally used to deliver change, just don’t cut it and yet we continue to use them, despite the evidence pointing to the high failure rates. To quote John Kotter “the basic goal has been the same: to make fundamental changes in how business is conducted in order to help cope with a new, more challenging market environment” he goes on to say “A few of these corporate change efforts have been very successful. A few have been utter failures. Most fall somewhere in between, with a distinct tilt toward the lower end of the scale”

So how do we make it happen?

Considering those transformations that have been successful, there are some lessons we can learn.

Lesson 1 – Transform Ourselves First

As leaders, we can hardly expect our people to change, if we are not prepared to ourselves. What I mean by that is that we need to challenge our own beliefs and habits first and be prepared to keep an open mind and try something new. Many of these habits and beliefs may have served us well in the past but that’s exactly why we should challenge them because they become a comfort blanket and can lead us to danger. As board members or senior executives, if we keep doing the same thing, behaving the same way, why should we expect anything about our business to fundamentally change?

I talk to many leaders who complain that their teams don’t innovate enough or hear statements such as “how hard can it be?”. The reason often comes back to the behaviours at the top. If we don’t allow our people to have crazy ideas, to get things wrong occasionally and learn from it how will they grow? The push for results is a powerful one and with good reason but it’s all too easy to railroad and get to a “my way or the highway” approach because we assume we’ll get there more quickly. And in that scenario all we’ll ever get is passengers.

So, we need to remain acutely aware of our own behaviours and how others perceive us. I know all too well, that’s not an easy thing to do but we should try at least and keep trying. As the saying goes, charity starts from home and I’d argue the same is true of change.

Lesson 2 – Give our people a purpose to believe in

Studies have shown that once we’ve met our financial needs, true engagement comes from a different place, one of meaning and a sense of purpose. Whilst that may sound like the stuff of fairy tales, it’s backed by plenty of good research and hard data. Our lives need meaning, otherwise we disengage.

High profile studies such as Gallop 2020 have shown that between 60-80% of us consider ourselves to be disengaged at work. “51% of workers are ‘not engaged’ — they are psychologically unattached to their work and company” another 13% “are ‘actively disengaged’ — those who have miserable work experiences and spread their unhappiness to their colleagues”. This represents a huge opportunity aside from the well-documented link between engagement and success when it comes to change and transformation.

Key to all of this is that those involved truly feel they are part of something and have a say in how it goes.

Lesson 3 – Feelings and Perceptions Matter

When we try to change anything, you may have noticed that everyone will have an opinion on it. Those opinions are often irrational and based on an imperfect view of what’s being changed. We love to think we’re rational beings and our decisions are based purely on hard facts, we’re not. Behavioural science is challenging traditional economic theory on exactly this point.

If we were rational, we’d all live healthy lives and we wouldn’t be on red alert with the global climate. We use mental shortcuts that we are mostly unaware of called heuristics to make decisions. Examples include:

  1. Valuing what we have today higher than what we might gain in future (which is why we struggle to lose weight, e.g. that cake now vs the beach body in 6 months)
  2. When we see or hear something alot we start to give it greater emphasis than it most likely deserves or at least give it greater credibility. Think of fake news and how it spreads so easily. Consider our reaction after a major incident such as a terrorist attack. We tend to over-estimate the likelihood of it happening to us despite the fact that we’re just as likely to be crushed by our own furniture
  3. We tend to under-estimate the costs, effort or timescales involved in something and over-estimate the benefits of things we don’t know. Ever run a large project or renovated a house? We rarely over-estimate the costs or timescales in any of those scenarios.
  4. We avoid loss far more strongly than we seek gain. Apparently risk-averse people are more likely to get into trouble with gambling because they try harder to regain losses.
  5. We tend to stay committed to current situations far too long, even when we know they are not good for us.

These are just a few and hopefully they help to illustrate that perceptions guide our judgement and those perceptions are mostly flawed in some way. Our job when making changes is to keep in mind that facts alone won’t be enough to get people moving, emotions play a bigger role.

Lesson 4 – Safety is paramount

We’ll tend to protect ourselves and those we care about at all cost. We’re hard wired to spot risk and most likely we’ll over-emphasise the likelihood of something bad happening. I was reminded the other day that most of the things we worry about will never happen…it’s the things we didn’t consider, that came from no-where that cause us the biggest challenges in life. Shall I mention Covid-19 at this point?

The minute we perceive something might change, especially where we are not the architect of it, our thoughts typically go towards “what does that mean for me? And often in a business context, “how will that affect my job?”. Most changes of any scale, especially transformational change, will affect jobs, often fundamentally and even to the point where they won’t exist anymore. The mistake we see time and time again is to assume that saying nothing till the very last minute will be ok. It’s not. People are smart, we have instincts and coffee machines, so we talk to colleagues, rumours build and we often end up creating stories that are far worse than the real one.

Legal considerations aside (and of course fully acknowledged) it’s best to be open, share regularly what you can and with kindness. Above all be genuine. Most of us understand that everything changes and that means at some point our jobs will too. The key is how it’s done and how supported we feel as we adjust. There is a term I like “fear is a mind killer” and that’s most definitely true of innovation which requires us to feel free to experiment, to get things wrong and learn by doing. True transformation isn’t a project plan, it’s a journey of learning and discovery and fear is rarely, if ever a useful companion on that journey.

To finish up, just a few thoughts on Change Management and its role in transformation. We often see change management listed as a set of activities on a plan, maybe even a dedicated workstream. Activities are often focused on different forms of communication.

Whilst these are all very useful and sensible, I’d like to propose a slightly different slant:

In the end we change ourselves

Or put another way, real change starts from the inside.

Last year one third of the global population were in some form of lockdown within a matter of weeks, giving up our freedoms and in many cases adding severe hardship to our lives. All the programme leadership in the world couldn’t have made that happen at such a scale, we made it happen.

And that’s how real transformation happens, we do it when we see a reason to change that we believe in.