Digital disruption is only one of the factors that is driving increased transformation across industries and geographies – other influences include tougher competition, globalisation and shifting market demands. In a representative survey taken across 432 individuals in December 2016 85% of respondents mentioned that they expect increased transformation activities in 2016 and beyond.
The issue is that most transformation projects are not yielding the expected outcomes and are unsuccessful both short and long-term. McKinsey's latest global survey across 1,946 individuals support this as few executives say their companies' transformations succeed.
The survey results reveal that only just 26 percent of respondents say the transformations have been successful at both improving performance and equipping the organisation to sustain improvements over time.
In our experience the major reason leading to these poor transformation outcomes lies in the fact that organisations don't take a rigorous approach to integrating all the initiatives required at an organisational and people level to coherently implement lasting change.
In order for sustainable change to occur in today's complex business environment clear decisions need to be made on how the desired future state is achieved (GAIN) while working on the turnaround (PAIN). The GAIN includes the delivery of a reinvigorated simplified organisation, focused on growth markets while the PAIN's focus is on performance improvement, efficiency and cost reduction all involving tough decisions. In order to achieve the desired transformation results interactive change needs to take place where all actions and services supporting either GAIN or PAIN initiatives are integrated to deliver a shared vision and new organisation. If this balance is achieved you're "in the box" which leads to transformation success!
With the experience of supporting organisations through transformation all over the world, LHH has developed seven transformation principles.
The SEVEN Transformation Principles
1. Know where you are heading and why: without a landing strip you're just another plane in the sky
How clear is the landing strip of where you're going to be when you get there?
Is that clarity held across the organisation in the mind-sets of individuals in the workplace?
2. All change is personal
Organisational transformation is going to have an individual.
As a consequence, you need engagement at the individual, personal level.
3. At the heart of every organisational transformation lies the fact that people need to do things differently by either stopping behaviour, starting behaviour or a combination of both
- We tend to change structures, processes and systems to make ourselves believe we are transforming and changing.
- People will need to use these structures, processes and systems in a meaningful way to get an outcome – if that doesn't happen, we haven't transformed, we are still the same.
4. Transformation takes energy – it requires more effort to transform than to stay the same, more than 7 things pushes our limits
- Influencing people requires time and energy.
- The brain ignores most things – we turn off what's not important.
- 7 + or - 2 initiatives is the limit of our working memory.
- It's about making choices, being focused and getting value out of what you do.
5. You cannot run an organisational transformation on business as usual mentality
- "Inside the box" – when interactive change takes place, it is not business as usual.
- You need to make very distinctive and differentiated choices on how you are going to manage the business during this period.
6. Not all people who start the journey will be there at the end: it's about critical mass
- Everyone must get on a bus. There are 2 buses and they are not going to the same place.
- How do we make sure most people get on the bus and how do we manage those who are never going to make it?
7. The biggest contributor to the success of a transformation is not process but mind-set
- Mindsets are a predetermined way of thinking about the world that is shaped by our prior experiences, values and attitudes.
- What are the mind-sets that prevail in an organisation? And what are the mind-sets that hold people back?
- The behaviour will flow from the mind-set when you have accord between what you think and what you do.
- Without mind-set shifts, there is no behaviour change - without behaviour change, nothing changes.
Author: Leigh Scott Kemmis, Chairman, LHH Thailand, can be contacted at leigh@lhh.co.th, tel 02-653-5040
Series Editor: Christopher F. Bruton, Executive Director, Dataconsult Ltd, chris@dataconsult.co.th. Dataconsult's Thailand Regional Forum provides seminars and extensive documentation to update business on future trends in Thailand and in the Mekong Region.