One Reason Transformations Fail: They Are Managed Like Changes
Updated: Jan 7, 2022
Let’s start with a troubling number: the success rate of major change programs is 30% (McKinsey).
One of the main reasons for this abysmal performance is that large change programs (aka transformations) are usually managed like “traditional” change initiatives. A transformation, be it digital, cultural, or other, is not just a big change initiative or even a portfolio of change initiatives. Change initiatives and transformations are different animals altogether, therefore requiring different leadership and management capabilities.
There is no better way to illustrate this difference than with two short examples.
A story of change
A technology firm integrates twenty recently hired specialized engineers into its product development teams. It requires adapting roles and responsibilities, work processes, and performance evaluation. The change affects hundreds of people. The company applies well-known change management practices and the change is a success.
A story of transformation
A successful pharma company derives 80% of its revenue from a single product. When competitors start developing competing products, it creates an existential threat for the company. As a result, the company launches a transformation to shift its entire business model. It includes developing other products, acquiring firms developing other products, and partnering with other companies to become more resilient to this kind of threat. In order to make the transformation sustainable and develop futher adaptability, it also calls for major culture, management, and leadership shifts.
These two stories contrast on several aspects:
Is change management a bad thing? Absolutely not! The objective here is not to pit one against the other. Change management is very effective and a worthy area of expertise in itself. It’s not its value that we are questioning here, but its domain of applicability. Similarly, there are many nuances between the two extremes of “traditional change” and “transformation”. Most initiatives will find themselves somewhere in-between. In essence, change management is a mature discipline that works well in conditions that, unfortunately, transformations do not meet.
By definition, in a transformation we’re going to places we’ve never been before. This translates into uncertainty and unpredictability. Transformations deal with uncertainty by building ways to learn into the process, such as experiments and quick feedback loops. Change management, on the other hand, is based on the assumption that we know enough to predict what is going to happen and control the variations. One might argue that change management is – like traditional project management – a product of the waterfall paradigm: analyze requirements, design solution, execute, verify the result, and finally operate, which demonstrates a rigidity toward the unexpected.
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Maybe the most striking divergence is the way people are involved. With change management, although we talk about “adoption” and “engagement”, the prevailing impression is that people are the object – being acted upon – and not the subject. They are supposed to adopt (read: accept and execute) the change and those who don’t are resisting, which in this context implies there is something wrong with them. In a transformation, by contrast, people are the subjects, they own the change collectively and are free to decide how they’re going to get involved; they are change agents.
In view of the particularities of transformations, some principles and practices that could help come to mind. Here is a small sample.
So, if you are involved in a transformation, this discussion will help you recognize the challenges specific of such an undertaking and hopefully point you toward useful practices and avoid the typical pitfalls.
Connect with Bruno Collet on LinkedIn.
Bruno Collet advises and coaches leaders to develop the individual and organizational capability to anticipate and react to changes better and faster. In one word: Agility. His approach relies on action-learning with concrete practices, skills and behaviors. Bruno Collet executed top-level missions with several organizations internationally. He is also a recognized speaker, author and is accredited ICAgile instructor. Bruno Collet holds an MBA, MSc., as well as several certifications such as PMP, PMI-ACP, ICP-LEA (Leading with Agility), ICP-ORG (Adaptive Organization), ICP-ENT (Enterprise Coaching) and ICP-AHR (Agile Human Resources).