A company's transformational strategy can initially provide a favorable competitive position. Yet a little over half of these strategies deliver on their promised value. Why? Could it be that leaders press for better execution when they really need a sounder strategy? Or they craft a new strategy when execution is the true weak spot? There are multiple reasons. During the past twenty years through our research and interventions we have found many factors that limit the execution and performance of an organization during a transformation process. These include: inadequate or unavailable resources, poorly communicated strategy, actions required to execute are not clearly defined, unclear accountabilities for execution, organizational silos and culture blocking execution, and inadequate performance monitoring. We also found inadequate consequences or rewards for failure or success and poor leadership and talent to execute their strategies.
Another important cause of strategic underperformance: active inertia .Through active inertia, executives cling to strategic formulas that brought success in the past-even though emerging business realities call for new formulas. The strategic frames of the past become blinders; processes harden into routines; relationships become shackles; and values turn into dogmas.
We have found that high performing organizations in a transformation process seem to have certain behaviors in common. These include:
Viewing strategy formulation and execution as inextricably linked-then raising the bar for both simultaneously.
They keep goals simple, concrete and outrageously challenging. They describe what the companies will do and won't do. Transformation efforts many times are mined by incorporating subpar objectives in the planning process. If we want to transform we have to put in place goals that will really transform. The goals of these successful organizations serve an important function in the transformation process. They challenge the way the business is run, work is done, talent is managed etc. They create a sense of urgency and constructive tension that moves and unfreezes the status quo.
Successful transformations focus both on performance (short term results ) and the organizations health (long term performance and strategic challenges). Critical organizational health factors such as the development of talent, process excellence, the development of innovation strategies etc. should receive the necessary resources as short term productivity initiatives do.
The well intentioned process of asking each department or business unit to develop their own goals and objectives that contribute the organizations transformation strategy results in a multitude of initiatives that are running and competing parallel to each other. They drain the company's resources and energy and do not achieve the expected results.
The transformation planning process should interconnect at three levels. The first establishes a clear since of direction and draws a picture of a future state. The second level elaborates three to six transformational strategies that are critical to the transformation of the organization. The third level is the six to ten incentives that turn the organizations change strategy into a reality
Successful organizations continuously monitor performance. They track real-time results against their plan, resetting planning assumptions and reallocating resources as needed. They remedy flaws in their plan and its execution-and avoid confusing the two.
Explaining to employees what is expected of them in the transformation process will not significantly change behavior. Neither will make everyone feels happy, comfortable, and satisfied transform an organization. The reality is that that performance improvement is marginal at best when these are the important transformation strategies. The truth of the matter is that when transforming behavior and performance, you have to rewrite the employee's operating system. You have to change their mindsets. The change has to make sense to the people so that they can execute it. Team members at all the levels of the organization have to understand what they are doing, and why they are doing it before they will commit to putting it in practice. When rewriting people's operating system you must introduce new concepts and knowledge that will provide the necessary tools to transform their work areas and the organization. Leaders must provide persistent, consistent and optimistic support in order to achieve expected results
We can fall into the trap of focusing on concepts, strategies and restructuring while failing to transform the way work is performed on the floor. Restructuring the organizations by itself will not change service levels or impact productivity. Performance transformation occurs when fundamental change impacts the shop floor, especially when white elephants and traditional icons are removed or challenged.
Finally it is imperative that the best people are assigned to lead the transformation of the organization. If your best leaders are not used because they are busy doing important projects for the company, what is the message that we are sending to the organization?
Copyright 2010 QBS, Inc.