Business transformation means navigating a sea of multiple interests and widespread uncertainty.
But there is no single approach that is right for every situation. The level of agreement about where the organisation is heading and how it should get there varies from transformation to transformation. So how do you decide on the best way to proceed?
Our business transformation experience shows that, before setting sail, you need to select the right approach by evaluating the degree of agreement and uncertainty in the air. There are four ways to embark on a business transformation voyage, and each responds to a different set of ‘sailing conditions’: calm waters, shifting weather, unknown waters, and the perfect storm.
When the management team agrees on what the transformation should deliver, and how, the best results are achieved as a result of effective planning. This includes deciding on a route, defining strategic projects, developing action and communication plans, managing stakeholders and monitoring achievements against these plans. Your primary responsibility as transformation manager is to keep stakeholders satisfied by communicating progress and managing risk. In conditions like these, traditional planning and project management are key skills for the successful manager.
We recently used this approach with a European engineering company. Management had a clear direction for the transformation programme and the task was to work towards a roadmap using known planning techniques. With our help, the company achieved an aligned view on challenges and drivers for change, an agreed change vision and a transformation road map.
When politics take over and there is disagreement about what the transformation should aim to deliver, negotiation becomes a vital tool. For the transformation to be effective, you need to agree on a realistic next step and a process for getting there. Focus on building coalitions and bringing executives around to a common point of view to create a shared agenda, target and sense of direction.
In our recent work with a global manufacturing company, stakeholder management and negotiation skills proved to be critical to successful transformation. The company's culture was one of ad hoc decision making, with no strong leadership culture. We developed the management team’s understanding of the importance of bringing the right people into the decision process, and basing negotiations on facts wherever possible.
On some transformation programmes, there is agreement about where the organisation wants to end up, but not much certainty around how to get there. In this situation, planning short, intense bursts of activity (sprints) is the way ahead. Staying agile is also essential as the path towards the goal emerges or changes. As transformation manager, your mission is to keep the ultimate destination in sight and ensure that partial results are aligned with the agreed objectives. Accept the fact that there is no master plan.
Our recent experience of using this approach includes a Nordic insurance company. They had limited experience of large business transformations and were somewhat risk-averse. A clear imperative of the transformation programme was to minimise risk. We recommended working towards a clear target while using underlying scenarios and calculations to demonstrate the different ways to get there. Another method was to pilot the transformation in the smallest market.The effect was a responsive transformation programme that was able to react and adapt to internal changes in strategy as well as external market conditions.
When low predictability on the overall outcome of the transformation is combined with great uncertainty about the transformation process, it can seem like a perfect storm but should instead be treated as an exploration into the unknown. Although transforming the business in these conditions is highly complex, when the transformation is handled successfully, management and employees find themselves on a creative and highly inspirational journey.
Such conditions require a skill set quite different from traditional project management skills. To be effective as a transformation manager, you need to accept that the future is open ended and that everyone involved will play a critical role in shaping it. The process of letting strategic direction emerge on its own is an exciting but unpredictable transformation, where you will need to be ready to promote action and make decisions in the face of uncertainty. Effectively you’ll be both captain and ‘life boat’, making sure that everyone knows their roles in the exploration, and ensuring they feel secure and confident as the transformation evolves.
Our recent experience of this approach includes a major European bank. The stakeholder landscape surrounding the transformation programme was characterised by little agreement on the desired outcome and a very unclear path forward. Dynamic scope management was used to manage risks and ensure necessary flexibility. The outcome was increased maturity in the cooperation across the company.