Why is Transformation so difficult and how to make it a success?

Why is Transformation so difficult and how to make it a success?

Transformation has become a necessity in business rather than a nice to have, indeed those businesses not thinking

Transformation has become a necessity in business rather than a nice to have, indeed those businesses not thinking about it in one form or another, are really just sticking their heads in the sand.

Research by the consulting company McKinsey confirms that only 26% of executives say their companies’ transformations have been very or completely successful at both improving performance and equipping the organization to sustain improvements over time. According to the research, no single action explained the difference in success rate; however one thing was clear: the more change actions an organization undertook, the higher the likelihood that they would succeed in their transformation. The research also suggested that practices include communicating effectively, leading actively, empowering employees, and creating an environment of continuous improvement were contributing factors.

16 years of transformation experience

Over the last 16 years, dFakto has gained a lot of experience about what makes a successful transformation and is happy to share some insights. A good plan is obviously a good place to start of course, and our business consultants, who’ve seen a few transformation initiatives in their lifetime, are well placed to give an opinion on the quality of the plan.

It’s usually pretty easy to spot the companies and organisations that are the most likely to succeed, as they all tend to have a clearer view on their future. Realistic answers to a couple of pertinent questions quickly tend to sort out the men from the boys, as it were.

What is the objective of your transformation? How long have you given for it to happen? – Have you got a team dedicated to the project or are they combining other functions? – Are they experienced? – Who is the sponsor of this transformation? – What level are they at? Board of Directors? Management? Head of department? – What funds have been devoted? Is this Capex or Opex? – How will progress be monitored? – How will management be informed of the progress?

It is on these last 2 questions that dFakto is particularly able to advise and help. Too often the focus is just on the ‘actual’ expenditure, thereby only looking backwards, when an eye on both current and future investments is required. It’s a tough nut to crack, and is especially so as the ‘target’ is a moving one … companies tend to start out by thinking they need to be at place A but quickly have to be planning ahead as to how they can arrive at places B and C. There is no doubt that the issue is even tougher when the company in question has no idea as to their progression and how they are doing.

Numbers are not enough

Experience has taught us at dFakto that the numbers are not quite enough, and that a combination of qualitative and quantitative data is required to know where you are, how you are progressing and how much still has to be completed. Of course, financial expenditure and planned investment information is collected and verified, but so too is how people feel about how they are progressing.

The raw data to be collected can be made available in many different forms including project management software, text files, information on websites, SAP databases etc. Once sourced, it is checked, and presented in such a way that the CEO and/or the board can quickly and easily get answers to their questions. This dashboard can be updated in just a few clicks as the numbers are automatically and directly sourced from the client’s system. Consolidation is made quickly meaning that it is easy to play the ‘what if’ game, as in what would be the impact of adding this or that plan for example.

The naked truth

dFakto gives management the reassurance that the data they are looking at is reliable and has been cross-checked, and that the data being presented is the same as that being used all around the company… in other words, “one single version of the truth” with no trickery, no reworking or manipulation of the figures.

The automation of this data collection across the organisation means that the PMO and team can spend more time thinking about the issues and much less time simply organising the collect and verification of data. It means more time can be invested anticipating the next moves in the plan, and on the change management required.

A bonus is that there is no agenda behind the figures as they are what they are, and accepted as such: facts and figures. The happy by-product of this is any discussions for change are non-confrontational making it easier to identify, discuss and rectify the bottlenecks in the transformation.

Change and transformation is painful by definition, but it’s a lot easier than having to make big decisions in a hurry. All the more reason why it’s nice to know where you’re at, where you are going and when you should get there.

Obviously, this doesn’t meant that your plan should be as static as figures can be. Linearity can be the reason for its failure. When implementing a transformation plan, a special attention should be paid to the “non-linearity” of it.

Any transformation plan must allow some flexibility to be able to be quickly modified in order to reduce the damages if one does note that a bad idea is being implemented. On the other hand if one does notice that the plan overdelivers, the plan should be flexible enough to overcome initial expectations. This “non-linear” approach has many consequences: ideas can be tested out and resources can be allocated much faster if needed.

In conclusion

With continuous improvement now becoming a core competency of managers in business today, it is obviously important they stay on top of what is happening in their organization. With dFakto’s help they can understand what’s happening and make the necessary transformations thereby ensuring their business is sustainable and fighting fit for the future.

You want to learn more about Transformation?

dFakto is organizing a workshop with the goal to review and discuss the main issues that need to be tackled when it comes to Transformation. For more info please contact JOANA SCHMITZ jsc@dfakto.com or +32(0)2.290.63.90.

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