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Time for a Change

Optimize Blog - August 17, 2015 - 0 comments

Successful corporate transformations and their leaders become the stuff of business legend. Transformed companies have achieved unprecedented competitive power and outsized returns to shareholders. What Chief Executive Officer wouldn’t want all of these things?
Unfortunately it is nearly always the companies in crisis who may be best placed to achieve a true transformation. By contrast, most transformations undertaken in non-crisis conditions end up failing. Employees’ attitudes and behavior remain unchanged, ambitious targets fail to materialize and the program is finally abandoned, often leaving the company worse off than it was before.
It is our experience that when things are going well, executives are understandably reluctant to undertake transformation programs. They know that failure to act may condemn the company to a slow decline and eventual collapse, but they also justifiably fear the uncertain outcome of a transformation process.
Any CEO wanting to make transformational changes when things are seemingly going well faces a number of daunting challenges. The desire and need to create a new corporate reality that changes the way employees, customers, and investors perceive and experience the company is not easily achieved even if it is a business critical requirement to ensure sustainability of the organization. This future reality must be so clear and engaging that it seems not only better than today’s reality but also necessary, even inevitable.
We believe that a company can be transformed without first experiencing the catalyst of some form of corporate crisis. This can only be the case however if the leaders understand what makes individuals and groups transform their view of reality. In our view successful transformations need to meet the following four conditions and research would support that if even one of these factors is missing, the transformation is likely to fail:
1. Do and Reflect
Transformations call for more than superficial levels of change. Long held habits must be questioned and discarded and new ones learned. But it is hard for people to achieve the objectivity needed to question and change their daily routine while they are still actively immersed in it.
Leaders and participants in a transformation must combine frenetic activity on the front line with regular composed observation and reflection. However, corporate leaders in a transformation tend to forget the reflection piece and just try and run faster and faster to keep up. What is lost in this scenario is the fact that the full cognitive and emotional complexity of the transformation process can be managed only when its leaders have sufficient opportunities for reflective observation.
In the absence of a crisis, this reflective perspective is difficult for most senior managers to achieve—the pressure of day-to-day events renders detached observation a rare luxury—and if it is difficult for senior managers, it is much harder for rank-and-file employees. Yet without a reflective perspective, these employees will experience a transformation program as something imposed from above, and the program will fail.
2. Completely Understand the Purpose
The transformation of a company requires all of employees, regardless of how many there are, to adopt a new view of its future, a future they must regard as essential. Before employees can arrive at this deep conviction, three things must be absolutely clear to them.
First, the “why” of the transformation program, as well as the “why now,” must persuade them; the benefits of success and the penalties for failing to act must be equally obvious – even creating a burning platform. Second, the company’s new future—the “where to”—must be clear and exciting to everyone. Third, each employee must understand the personal benefits of the program: the leadership must have credible answers to that natural question, “What’s in it for me?” To inspire genuine conviction, the program’s rationale and goal must withstand the toughest scrutiny from the most cynical observer right from the start.
3. Making it Real
Some leaders believe that they can create a compelling new reality simply by mustering the arguments in its favor. But, human beings master complex new activities not by reading or thinking about them but through experience. A corporate transformation too requires the employees to have direct, non-abstract experience, for leaders can’t transfer their own through speeches, documents, and PowerPoint presentations. Each individual must re-create it personally.
4. Assume there will be Surprises and Plan Accordingly
Mistakes and surprises are inevitable in a transformation process. Often the program reveals weaknesses that the company had not anticipated. Unless a transformation program is configured to accommodate these unwelcome surprises, it can all too easily come undone in midcourse. Such a failure can be disastrous, since a company whose transformation fails before it is complete rarely tries again. Anticipating the unexpected when developing the program’s design and resources can make failures less likely.
In summary, transformational change is a daunting undertaking but just because it is tough to do doesn’t mean that it shouldn’t be done. Don’t wait for the inevitable crisis – be proactive and change if that change will provide some form of competitive edge and sustainability for the organization. A focus on these four areas will provide a platform for success.

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