Like individuals, organizations change continuously, reacting to developments in their markets and to the arrival and departure of key people. In a large company, these changes go on more or less unnoticed. But sometimes a company must change more quickly than this gradual evolution allows; it needs a break with the past, an accelerated pace of change—a transformation.
With the global economy emerging from the COVID-19 pandemic and seemingly charging headlong into a cost of living crisis perhaps there has never been a better time to consider a transformation of a business and to use the catalyst of the current, complex and difficult operating environment to reassess a business model. However, it shouldn’t take a crisis to drive the idea of transformation.
Can a company be transformed without first experiencing a crisis? We believe that the answer is yes if the leaders understand what makes individuals and groups transform their view of reality. Successful transformations need to meet the four conditions described below; in transformation failures, at least one of these elements is usually missing:
1. Transformations call for more than superficial levels of change: well-grooved 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.
2. The transformation of a company requires all of its employees to adopt a new view of its future, a future they must regard as essential.
3. Leaders cannot create a compelling new reality simply by mustering the arguments in its favor—with the odd strategic review to check on progress. Human beings master complex new activities not by reading or thinking about them but through experience. A corporate transformation too requires the people to have a direct, nonabstract experience – they need to experience it personally.
4. Mistakes and surprises are inevitable in a transformation process. Industries don’t stand still waiting for companies to transform themselves. Often the change 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.
Most transformations undertaken in noncrisis conditions end up failing. Employees’ attitudes and behaviors remain unchanged, ambitious targets slip downward, and the program is finally abandoned, leaving the company worse off than it was before. Knowing that failure to act may condemn the company to slow decline and eventual collapse is not a good plan but it is also fair to fear the uncertain outcome of a transformation process.
As companies emerge from the COVID crisis only to be faced with rising costs, an ambivalent workforce, supply chain pressures and social license activists, there has never been a better time to make that transformation that your business needs to remain sustainable for the foreseeable future.
Unprecedented times like these require nothing less than creating a new corporate reality that changes the way employees, customers, and investors perceive and experience your company. This future reality must be so clear and impressive that it seems not only better than today’s reality but also necessary, even inevitable.