Business transformation – Why do we keep on getting it wrong?

Summary

This white paper, the third in our Octagon series, identifies five common reasons why business transformations get into difficulties before presenting five ways in which you can keep your project on track. 

It includes 20 practical recommendations for successful business transformation, based on interviews with industry leaders who have done it successfully, examination of case studies and our own in-house expertise.

Like any epic journey, the route needs planning, plotting and navigating successfully. Successful transformation requires strong vision and a clear strategy that engages all stakeholders and defines the expected outcomes. Even with a clear strategy, an organisation will only achieve true transformation when it has a clear view of how to go about achieving those goals. A clear path enables the business to consider all aspects of the transformation that need to be taken into account.

Once the destination and path have been defined, knowing what resources you will require is critical to success. Are the skillsets and expertise available? Will additional resources be required? Strong governance will keep your initiative focused and on track. Finally, old habits die hard – true and sustained business transformation must be culturally ingrained.

If these statements are true and obvious, it begs the question - why are successful transformations so few and far between? And what can we do to avoid making the same mistakes over and over again?

Business transformation has a gloomy performance history. Kotter in 1996 said 30% of large-scale change projects fail with powerful polls since then suggesting the same failure rate. Looking closer, surveys show that between 60 and 75% of major implementation problems are due to people and change management issues. More closely, McKinsey in 2008 pointed to the behavioural aspects of change as holding the key to success, with others pointing to strategy, vision, structure, planning, etc. In 2014 the BTA studied 13 major change projects, with the same 30% success rate. For the success rate to remain the same for an entire generation, with no shortage of analysis and learning available on the topic, there is clearly a massive divide that must be bridged, in digesting real feedback from other organisations, in understanding and creating the environment in which successful change can happen. How can we make progress? Why is it so hard to implement change?

Transformation requires change that can take different forms: developing new skills, changes in organisational structure, implementing common and consistent processes, harnessing new technologies and systems, creating new roles and responsibilities. Even as separate activities each one involves a departure from comfort zones, but when strung together to transform the organisation these change elements can be substantial in their impact on people and the workplace, if not managed successfully. But what is it that makes business transformation complex to manage? And naturally following this question, how do we reduce complexity whilst still bringing together the different elements of change?

Our researchers looked into the barriers that impede a transformational effort in business and asked senior executives for insight on critical steps taken and lessons learned on their transformation journeys. From this insight, we will look for the critical elements driving successful transformations and what can be done to avoid repeating the same mistakes.

We are indebted also to organisations such as BT Openreach, Heathrow Airport and Aldermore Bank for sharing their success stories and the lessons they learned.

Like the other reports in this series, including ones covering HRIS and Performance Management, we want this report to be a practical guide for any firm embarking on a transformation programme.

Download the paper for free and give us a call if you think we can help you with your business transformation programme. Call 0207 101 1979.

Last updated: 1 Feb 2018