Why So Many Companies Fail On The Way To Transformation

Chief Executive Officer

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So you’re starting your transformation. You’ve hired some consultants and penned your mission statement with some wonderful platitudes and defined the culture you are going to create. Awesome!

You’ve also heard about agile and how everyone is going agile, so you’ve got an initiative to be both lean and agile, and you’ve hired an agile coach who’s got lots of certificates (but has probably never worked in your context or delivered a transformation). Rock and roll!

Unfortunately, Lean and Agile transformation initiatives are fraught with failure. Most focus on tools and methods, and others on shuffling the deckchairs on the Titanic. You’ve seen it all before. The consultants come in with their frameworks and playbooks and outline how you’ll all go through training and then be reorganized into some new working patterns. They’ll set up a governance office and back the bus up full of their automatons to run the governance functions for you, and they’ll scatter some coaches around the organization to watch and then create PowerPoint presentations as your new weekly reporting format for an eyewatering hourly rate. Bingo!

In the meantime, you pat each other on the backs as the architects of this Great Transformation in your organization. This time it will work. You’re in charge and you’ve outsourced this to the best consultants money can buy, and boy are they expensive, so they must be the best! A few weeks in and it’s going swimmingly, everyone is attending inspiring training classes and everyone has new vocabulary you catch them using such as Go and See, Daily Standup, Kaizen or perhaps some agile phrases like Sprint, Scrum, Increment and so on.

You spend your days shuffling between non-stop meetings where you’ll talk about lots of thing you need to accomplish, but accomplish little—and then decide that’s the job of the consultants. Never mind, it’s the best time to catch up on your email or Instagram feed. Yep, pat yourselves on the back and be content that in six months, your metric of being 75% lean or agile will surely be achieved. #Success

OK, let’s take a pause. This is a pile of poo, yet this is more or less how it plays out. Two to three years later and millions of dollars sunk into this latest transformational strategy and nothing much has changed. Cost reductions have come from layoffs, time to deliver is still woeful and blamed on all the dependencies from vendors, and quality is still a problem as your processes are complex and the consultants just don’t understand how different and unique you are. Hint: you are not different or unique. Poo smells the same whoever creates it.

Have you noticed how this seems to be on rinse and repeat? How many transformations have you been through already? Did they achieve the outcomes desired? If your current transformation is not your first, then ask yourself why do we need a second one or a subsequent one? It’s like a project that promised X but delivered Y, and now we need another project to fix/deliver everything project 1 failed to achieve.

My friend Dave Snowden, the creator of Cynefin and a world expert in complexity thinking, has said often “once you say you’re in a change initiative, you’ve already failed.” The problem is those who’ve been around for more years than they care to remember have seen this repeat cycle come and go every few years. They know if they resist it long enough it will fail, and things will return to the way they were, the way they preferred and they will remain in their comfort zone.

A comfort zone is a great place, but nothing ever grows there. As Peter Drucker once said, “any innovation in a corporation will stimulate the corporate immune system to create antibodies that destroy it.” These long-term staff are that “corporate immune system” and some of the worst offenders are in the executive ranks. The bigger the enterprise, the worse this is.

To truly transform an organization means changing its design, its operating model. Your organizations are designed in vertical hierarchical structures, often colloquially referred to as silos, that are jealously protected by the executives that lead them. They do not want anything to happen without their consent and will ensure they do not lose any power or control over them. The problem with this approach is that value flows to your customers horizontally across an organization, which means that we need to remove the barriers to flow, and that means those silos. This means leaders need to be working together as a real team to achieve flow.

Executive behavior must change. Real change must come from the C-Suite, or they must advocate all responsibility for the change and empower others to lead that change, and empowerment does not mean bless and later blame, nor does it mean you delegate control, but manage by proxy. It means trust! If you truly want to guide your transformation, you must be seen changing yourself in tangible ways.

Traditional top-down hierarchies with “I say-you do” management styles are stifling innovation, preventing self-organization and emergent outcomes. We miss improvement opportunities and we create a culture of fear, exacerbated by the current pandemic constraints. People become afraid of losing their livelihoods if they underperform so are less likely to reveal problems and issues that should be corrected. In short, your business suffers as a result.

Leaders create the environment for change. Leaders need to focus on building an engaging vision, creating shared mental models, developing cognitions and enabling and empowering agile execution. Being agile is about being responsive and has nothing to do with software development methods. Agility is an emergent property of how resilient your organization is to change. How fast can you pivot if the market changes? How fast can you recover from the current pandemic crisis? How fast can you re-tool your machines and people to exploit new opportunities as they emerge? That is business agility—and it means survival.

The acid test is how long does it take to get a new laptop in your company? If the answer is more than a few hours, you have a problem!

Leaders must display the characteristics they desire in others. If you rant and rave at folks and make arbitrary and emotional decisions, guess what your reports and your middle management will do? Managers that use the phrase “don’t bring me problems, bring me solutions” are a huge part of the problem. Leaders and managers need to become an army of problem solvers. No consulting firm you hire can fix this. I can teach you what to do, even how to do it, but only you can do it. Most consultants just suffer the frustration with the consolation of billable hours as compensation for their despair.

The visual above outlines how real change occurs in an organization, and it is not about specific tools, techniques or certificates, all which have utility in the right context—it is about behaviors. Culture is a product of your behaviors. As a parent, if you exhibit inappropriate behaviors in front of your children, you’d expect them to emulate them, so why is this any different when you are in the office? Culture is emergent, and how you behave defines the culture that emerges.

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