Organizational transformation is often critical for companies to undergo to evolve, scale, and achieve desired growth and performance goals. That said, change initiatives often have low success rates. With the high stress and tension on an organization during transformational change, leaders change course, slow the pace, concede to reduced outcomes, or toss in the towel all together. However, harnessing the maximum potential of transformation is possible when organizations demonstrate intention in the following key facets to ensure change efforts are embraced and sustained.
5 Considerations for Organizational Transformation
Enterprise Vision and Strategy
Starting with a clear enterprise vision and strategy that is broadly articulated throughout the organization is priority number one. The most compelling visions tie to a purpose that inspires people from top to bottom in the organization. The strategy will lay out the business priorities, roadmap, and measurable outcomes. The vision should be clear and easy to communicate with consistency at all levels of the organization. The strategy and priorities will lay out for the organization the critical imperatives while also delineating the activities that are not a priority. The vision and strategy will answer the questions: Why do we exist? What do we aspire to be in 3-5 years? How will we get there?
If an organization’s vision and strategy require significant and large-scale organizational change for success, it’s beneficial to take stock of the current state culture and determine if there are elements that need to be reshaped to enable the path forward. Culture is made up of the attitudes, beliefs, and behaviors of a company’s employees. It defines the formal, and often more importantly, the informal systems for how work gets done.
A data-driven approach to analyze relationships between people and teams in the organization is powerful. When assessing organizational culture alignment to vision and strategy, there are several key questions to consider such as: Is our vision grounded in our core values? How do mindsets need to shift? What behaviors need to change? What culture norms do we want to preserve and protect? Who are the change champions and where are there silos in cultural alignment?
Operating Model Design
Operating model refers to processes, governance, and accountability structures by which an organization executes its strategy. Various principles should be considered in the design of the operating model, including the level of centralization versus decentralization, functional versus matrix model, global versus local or country-based, and virtual versus co-location to best support the aims of the organization. New capabilities and/or functions required to enable the operating model and deliver the strategy should be identified and integrated within the organization. Some important questions to answer are: How do we need to organize to achieve our desired strategy? How will we need to operate differently in the future? What new capabilities are required? What will be our governance and accountability structures?
Organizational Structure Alignment
Alignment of the organizational structure to support the operating model and strategy is a critical implementation step. Start with defining the top-level roles and responsibilities of each sub-organization and establishing the most effective approach to organizing teams within them to optimize accountability, efficiency, and performance. Role impacts, competency building, cross-team interactions, and performance management practices are important considerations.
This is also a great opportunity to assess organizational spans and layers to establish the number of levels and spans of control to optimize efficiency and empowerment within the organization. Key questions to be addressed include: What is the most effective structure for the future? What roles need to be created? What are the change impacts to existing roles? How will we acquire new competencies? How will we ensure clear expectations? What are the career development paths?
Formal Change Management
Leveraging a structured change management methodology throughout the organizational transformation, from strategic planning through implementation, ensures thoughtful consideration of stakeholder management, communications, program management, and risk mitigation. Effective organizational change management drives discipline around the people side of change, which is imperative for organizational transformation to be deployed and sustained. Important questions to address as part of change management include: What will our sponsors need to say and do to drive the effort? How will we secure support from key stakeholders? What are the change impacts to employees and how will we address them? How will we deliver and govern implementation?
Ensuring Effective Implementation
Strong business strategy provides a roadmap for success, but ultimately effective implementation of the strategy requires people and organizational considerations. Ensuring intentional application of these concepts will greatly improve an organization’s success rate in implementing strategic plans. As the scale and scope of transformation grows, the keen focus on these elements becomes even more imperative.
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