Organizations today operate in a complex environment where advantage may come from innovation, global expansion, consolidation, IPO’s, mega-mergers and predatory acquisitions. Business leaders have to constantly adjust their strategy to navigate this fluid environment and use multiple initiatives to stay ahead.
This ongoing alignment of strategy and of how strategy is executed within the organization – takes the form of restructuring, changes in ownership, outsourcing, technology implementations, etc. Each requires transforming how the organization operates. And, even though most transformations are undertaken purposefully, they fail to fulfill their promise as implementing a strategy, especially the one that demands major changes within the organization – all levels, business units, geographies, culture; is difficult and prone to failure.
Successful Transformation depends on Solid Execution
The Balanced Scorecard Collaborative has estimated that 80% to 90% of strategic plans are never carried out successfully. Most lean initiatives are abandoned outright or fail to deliver expected results (failure rate > 90%). Our experience suggests that the reasons for transformation project failure can be broken into two categories –
Lack of Organizational Capability: The changes in business strategy, changes in services and operations require that new expectations, deliverables and hand-offs are detailed and accountabilities are clearly articulated. Organizations typically fail to –
- Assess and develop knowledge and competency of leaders
- Align the senior leadership with the intent and direction of strategic initiative
- Consider the entire organization as a system
- Maintain a focused governance approach and have ineffective project management
Change Readiness: Organizations also fail to realize the gap between existing and desired capabilities along with its impact on the employees and key stakeholders. The common reasons include –
- Lack of knowledge regarding stakeholder expectations, e.g. tools, training, technology etc.
- Incorrect key performance metrics and key business metrics to measure change success
- Organization culture unable to support the initiative
- Lack of effective communications – both internal and external
It is key to understand that successful business transformation requires a multi-disciplinary approach along with supporting mechanisms like sponsorship from top, strong vision and a culture that aligns all employees to that transformational goal.
The Necessary Elements
In a perpetually changing world, any transformation must support the idea that the execution and re-execution of strategy is a continuous and evolving process. We have aligned design assumptions with focus on building organizational capability and change readiness for successful execution of any transformation initiative.
Organizations that undertake business transformation need to focus on the following key design factors:
Organization Structure: The organizations must be in close touch with market and customers (both internal and external). The key design principle here is to maximize the “surface area” of the organization by connecting as many employees as possible with the external environment2. This can be accomplished through a thorough analysis of the organization, delivery model, span of control and functional design.
Manage Staffing: The staffing decisions (who, how many, when) needs to be aligned to the business strategy to ensure successful transition. When headcount changes need to generate savings, thoughtful staffing ensures that short-term business needs are balanced with long-term. Eximius’ approach focuses on keeping the employees engaged, assessing key talent, developing retention strategies and maintaining fairness and consistency in the new organizational model
Governance and Project Management: This is one of the most overlooked aspects of organization design. This includes –
- Governance structure and role implications
- Governance systems and process inter-dependencies
- Governing entities – roles/composition/interactions
- Policies and procedures
- Effective tools for project management
We have helped hundreds of clients worldwide with their organization design efforts. This includes assessing and building organizational capability and change readiness, developing a robust governance structure and managing talent proactively to achieve the necessary business results.
The seeds of effective change must be planted by embedding procedural and behavioral changes in an organization long before the initiative is launched. Managers and senior leadership can then enable employees to take ownership of the new procedures and systems and integrate and apply the key principles of the initiative to the way day-to-day work is done.
An effective change management minimizes impacts and maximizes benefits.
Our Change Management methodology has assisted multiple clients to achieve this change. Some of the key techniques to assess change readiness include:
- Building executive sponsorship
- Stakeholder analysis and Impact Analysis
- Change strategy and management
- Communication strategy
- Measurement and consequence management strategy and plan
- Generating feedback loops to ensure successful transition to the new state
Organization culture is an unwritten, implicit, enduring set of norms, values, beliefs, leadership traits, organizational structure, brand promise, programs and practices, work environment that characterize organizations and their members. Culture emerges from the organization’s collective behavior and embodies consensual interpretations about how things are. Organizational culture is slow to change because it is value-based. We understand that leaders’ values/behaviors shape the corporate culture and that it is critical to start any culture change with leadership culture alignment and actions. The culture assessment and optimization during transformation project typically involves:
- Prepare and Prioritize
- Culture Assessment
- Culture Transformation & Measurement
Lasting business transformation depends on successful execution of strategy to migrate from traditional control hierarchy to a fully empowered organization. Leaders with passion must create the right structure, behavior and methodologies as the underpinnings of business excellence. Eximius can enhance the business transformation on three important dimensions:
- Create an organization and culture that improves decision-making and provides accountability for right results
- Ensure right people are matched to right roles
- Manage the opportunity for impact and growth
Using Eximius’ deep specialist knowledge, long track record and comprehensive tool sets, clients can implement business transformation that supports their culture, aligns with the business strategy and provides the leadership with the necessary tools to manage employees, customer and shareholder expectations.