Article by McKinsey on what seems to work for companies trying to drive the Digital Transformation. They found that while in general transformation has a low success rate, some companies beat the odds. They identified 24 specific actions that companies that succeeded support five stages of a transformation – noted below:
- Senior managers communicated openly across the organization about the transformation’s progress and success
- Everyone can see how his or her work relates to organization’s vision
- Leaders role-modeled the behavior changes they were asking employees to make
- All personnel adapt their day-to-day capacity to changes in customer demand
- Senior managers communicated openly across the organization about the transformation’s implications for individuals’ day-to-day work
- Everyone is actively engaged in identifying errors before they reach customers
- Best practices are systematically identified, shared, and improved upon
- The organization develops its people so that they can surpass expectations for performance
- Managers know that their primary role is to lead and develop their teams
- Performance evaluations held initiative leaders accountable for their transformation contributions
- Leaders used a consistent change story to align organization around the transformation’s goals
- Roles and responsibilities in the transformation were clearly defined
- All personnel are fully engaged in meeting their individual goals and targets
- Sufficient personnel were allocated to support initiative implementation
- Expectations for new behaviors were incorporated directly into annual performance reviews
- At every level of the organization, key roles for the transformation were held by employees who actively supported it
- Transformation goals were adapted for relevant employees at all levels of the organization
- Initiatives were led by line managers as part of their day-to-day responsibilities
- The organization assigned high-potential individuals to lead the transformation (e.g., giving them direct responsibility for initiatives)
- A capability-building program was designed to enable employees to meet transformation goals
- Teams start each day with a formal discussion about the previous day’s results and current day’s work
- A diagnostic tool helped quantify goals (e.g., for new mind-sets and behaviors, cultural changes, organizational agility) for the transformation’s long-term sustainability
- Leaders of initiatives received change-leadership training during the transformation
- A dedicated organizing team (e.g., a project management or transformation office) centrally coordinated the transformation
McKinsey found that when organizations follow a rigorous approach and pursue all of these actions during a transformation, the overall success rate more than doubles from the average (26 percent), to 58 percent.
To people who have been around the business transformation / change management / big system inplementation space awhile, there is one thing that really stands out about these points – that they have been around a long time. What Works has been known for a very long time. (Actually, the biggest thing I took away from this article was that even if you go by the book you get at be a 60:40 chance of success – there has to be a better way, as Do Nothing looks like a perfectly rational option at these success rates).
To no-one’s great surprise, Top Management Involvement is key. According to survey respondents, leadership matters as much during a transformation as it does in the company’s day-to-day work. It can’t be delegated to a project-management office or central team—the presence (or not) of which has no clear bearing on a transformation’s success—while executives carry on with business as usual.
From a Social Business point of view, the real take-away of the research is this: Across all 24 transformation actions, communicating—especially about progress—links most closely with success:
It also helps when leaders develop a clear change story that they share across the organization. This type of communication is not common practice, though. When asked what they would do differently if the transformation happened again, nearly half of respondents (and the largest share) wish their organizations had spent more time communicating a change story.
Though, as Norman Augustine noted, one can overcommunicate – see the quote at the top of this piece (Augustine’s Laws, 1984 ). And for those who have long suspected it, there is a risk of overplanning:
Few initiative leaders—only 22 percent—say they would spend more time planning the transformation if they could do it over again. Instead, these respondents most often say they would spend more time communicating a change story (49 percent) and aligning their top team (47 percent).
And again, to no great surprise, its rather important to tell staff what work looks like after the transformation:
According to respondents, it’s important to define clear roles so employees at all levels are prepared to meet the post-transformation goals—a factor that makes companies 3.8 times more likely to succeed
…as well as making it clear how what they do actually contributes to the overall organisation’s goals.
In short, this stuff has been known as the best practice solution for at least 40 years (the 30 years I’ve been doing this sort of work plus the 10-year old books I was reading when I started) so to me the real question that further research needs to answer is why 74% of transforming companies suffer from Santayana’s Law – Those who forget the past are doomed to repeat it