As we begin to see glimpses of a post pandemic world, business leaders are talking nonstop about how their organizations must be transformed. What they mean by transformation varies. Some intend to pursue a high-risk overhaul of their failing business. Others want their companies to “go digital” or “become agile” or realize their strategy, but they don’t always have a clear idea of what they hope to accomplish. Regardless of their intention, very few actually know how to effectively execute a transformation. In fact, one recent study found that 7 out of 10 corporate transformations fail to reach their goals.
All these failures are expensive. Direct costs include wasted resources, strategic plans not being achieved, business objectives not being met, and (most likely) a loss of jobs. Indirect costs are more insidious but may ultimately be even more damaging: lower organizational morale, less confidence in leadership, and (most damaging of all) an increased resistance to the next change initiative.
Over the past ten years 4 industry leaders, the authors of the new book Corporate Transformation: A Guide to Survival and Success have helped executives at 14 companies in a variety of different industries lead successful transformations. Collectively, these transformations have delivered over $9.8 billion in incremental revenue while achieving productivity gains between 20 to 40 percent. When the book’s authors began to compare notes about their histories in helping companies execute transformation campaigns, they found six common elements that played a role in the success of every campaign:
- Leadership: White hot commitment must be employed by management.
- Strategy: It is imperative that you clearly define and communicate the vision, cascading goals, strategic themes/focus areas and measures of success.
- Adaptive Culture: A proven, systematic approach to organizational change must be employed.
- Strategic Portfolio Management: This is where the rubber meets the road—a core process enabled by digital technology to translate the strategy into funded portfolios of transformation initiatives. Prioritize/Select/Resource/ Optimize/Track/communicate
- Project Management as a Core Competence: Skillful orchestration of Project Management resources is necessary to complete all transformation initiatives on time and on budget while meeting all business, technical, and human objectives.
- Keeping Score: “What you measure gets better” Measuring performance versus transformation goals will drive accountability and keep the organization focused and aligned.
SIX TO THE SIXTH POWER: It’s tempting to cherry-pick one or two of the six elements, but this is almost always a mistake.
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