Take it from our business transformation consultants: sustainable change is hard. It requires significant amounts of time, patience, energy, and incredible degrees of persistence and resilience. Humans are creatures of habit and modifying deeply engrained behaviors requires a unique set of abilities that, given the nature of a business transformation, are not yet fully embedded within an organization.
As we reflect into our work in helping business leaders drive successful business transformations, four foundational strategic imperatives emerge as must-haves to ensure the success of any business transformation – no matter how large or small the endeavor.
1. Successful Business Transformations Require a North Star to Ensure Alignment at the Highest Levels.
Transformations require articulating a vision, guiding principles, and goals, followed by tactics, metrics, and a roadmap to execution.
We call the articulation of all these elements and how they come together an Enterprise Destination Mapping (or EDM) framework. This first step focuses on clearly and definitively articulating an organization’s long-term strategy and ambition (vision), aligning on the critical guiding principles to be used for decision making (i.e., areas an organization is willing to comprise, and areas where there is no compromise) and putting the right pieces in place to create a burning platform for change.
For most organizations this comes to life in a variety of ways: a new strategy should be accompanied by a relevant vision – one that celebrates and acknowledges previous accomplishments while also re-centering an organization on new priorities. Cascading from that, supporting goals should be developed that are fully aligned and supportive of the new ambition. To drive progress, all initiatives should have well-defined executive sponsors, functional leads, execution parameters, KPIs, and milestones to constantly assess progress against the transformation.
For leaders inside changing organizations, Enterprise Destination Mapping acts as an organizational “north star” to standardize the language and improve the adoption of change associated with the transformation journey.
2. Truthful Leadership Alignment is Paramount to Drive Change.
It can be easy to agree to change in a room of your peers, it is much harder to drive it forward among your team.
The biggest challenge for many companies that are transforming is the truthful alignment between the members of the leadership team on the vision and their commitment to change. The qualifier “truthful” is of critical importance because it relates to ensuring momentum is created and followed through in the right direction once all the functional leaders have set upon the transformation journey with their teams.
As advisors to our clients and as partners in guiding the execution of their strategic agendas, we have seen a wide variety of behaviors among the leadership team during a business transformation. The most damaging is when leaders express niceties in the board room only to turn around and minimize the sense of urgency required to transform an organization.
Another example of misaligned leadership is when a new executive sponsor becomes responsible for a strategic workstream and suddenly the work effort changes dramatically. This is usually a clear indication of poor alignment from the leadership team.
To combat these business transformation risks, Clarkston’s business transformation consultants have several methods to ensure that the CEO has the right C-suite alignment. By developing a mechanism for direct ownership and accountability for discrete pieces of the transformation, alignment risk can be mitigated. Another way to mitigate risk is for the company’s executive team to build, align, and present plans from functional leaders to the CEO, addressing how individual 5-year strategic plans roll up to the overlying transformation initiative. The result is a comprehensive look, by function, with specific charters and strategies for their businesses to drive alignment on scope and expectations across the entire leadership team. In executing these types of exercises, the CEO and functional leads allow themselves to have a deep and wide understanding of what is required to successfully execute on the new vision. A deliberate level of participation is required by the executive team to ensure everyone is on the same page to drive ownership, visibility, and accountability for all pillars of the new strategy.
Understanding and being aware that the energy and excitement of a transformation will fade away over time as the realities of the day-to-day weigh in on senior leadership. Truthful leadership alignment is a key first step to ensure the C-suite has the right governance in place to retain alignment or revisit strategic pillars as the market or the company evolves.
3. Leaders Must Overcommunicate.
Just when leaders become tired of communicating – their audience of employees, vendors, and consumers – start to listen.
A recent client of ours, a global company in consumer products, was suffering growing pains after experiencing an unprecedented double-digit business expansion. A significant portion of the pain the organization was feeling was because there was a lack of information throughout the organization about the progress as well as the setbacks related to the business transformation. Clarkston advised the CEO to work on communication and to ensure the vision was well articulated. With Clarkston’s help the CEO began to create channels to share the organization’s most critical challenges and the planned solutions. This communication strategy rallied the organization to act and resulted in alignment and support at all levels.
Tactically, Clarkston’s business transformation consultants ensured that a weekly communication was established, highlighting wins and setbacks to drive transparency about the transformation process and upcoming changes. More critically, daily sessions were instituted with the sales and finance organization, providing updates on key performance indicators to communicate improvements and setbacks, ensuring actions were being taken when and where needed. After several weeks of this deliberate and consistent communication, clear signs of financial improvement were apparent across key metrics.
Leaders need to be transparent, timely, and consistent in how they communicate– especially in times of transformational change. Transformations rarely happen in a straight line from point A to point B – natural ebbs and flows will occur and it is the responsibility of leadership to ensure the organization remains focused and committed on the overall direction, but with enough flexibility to adapt within the guardrails and guiding principles as defined in the Enterprise Destination Map.
4. Transformations are a Journey, not the Destination.
The journey of transformation never ends. It takes tremendous persistence to keep moving forward but going backwards isn’t an option.
A global pharmaceutical company was aggressively looking for growth in new therapeutic areas and new markets. As such, the company was preparing to launch a new drug in a foreign, well established market inside a very competitive space (the drug would be one of more than 12 options for patients in the category with no major differentiators against the rest of the field). Clarkston helped the leadership team identify the commercial challenges the brand would face in such a competitive space and to develop innovative, first-to-market approaches to overcome these barriers. However, unexpected to everyone, the FDA issued a refusal to file letter in the US, essentially halting potential European approvals and significantly delaying the launch. As such, the team, resources, research, and insights gathered as part of this new launch had to be swiftly redeployed towards new value-added activities. This is just a small example on how a business transformation – in this case, a venture for growth into new markets, is not a static goal.
Leaders must plan for the unexpected, assess risks and develop mitigation tactics to plan for the next known unknown. The organizations that are on a transformation journey understand that the innovation engine can never stop if you want to keep moving forward.
Business transformations are hard and require significant amounts of change, time, patience, energy, and incredible degrees of persistence and resilience. But, the transformation is just the journey, not the destination. Leaders need focus and must avoiding shifting from idea to idea at all costs. Successful organizations advocate for commitment and proper amounts of risk taking, all while celebrating and communicating wins and losses. Each day of a transformation journey is just a new opportunity to push past the status quo and lead the organization to true change.