by Isaac Sacolick

Lessons learned from business transformations that fail to start

Feb 19, 2019
Digital TransformationIT LeadershipIT Strategy

CIOs and leaders can learn a lot from transformation programs that are in the news and fail to drive consensus and enthusiasm.

Last week we witnessed two failed transformations. The first was President Trump’s attempts to secure consensus on funding a border wall resulting in him declaring a state of emergency. The second was New York’s attempts to address the backlash against its deal with Amazon resulting in Amazon’s decision to pull out of the deal.

For the purposes of this article, I ask that you leave your opinions behind these issues aside.

Both attempts spotlight examples of leaders trying to change people’s mindset and opinions. Both were trying to transform based on their interests and beliefs. Both were controversial with supporters and detractors. Both failed to drive enough consensus and are now forced to explore plan b’s to achieve their objections.

CIOs can learn a lot from these failed attempts and how to avoid them in their own transformation programs.

Negotiating secretly can drive resentment

CIOs trying to sell a transformation program to their colleagues must take steps to explain the rationale behind the required changes. To accomplish this, savvy CIOs meet with business and operational leaders to review their goals, needs, and challenges to best align the transformation.

CIOs should use these meetings to do a lot of listening and learning. These meetings should not be used to strike deals with leaders or to negotiate aspects of the transformation. When describing the transformation’s objectives and goals to leaders, CIOs should be consistent on what they are trying to accomplish, where they are in developing their strategies, and their next set of milestones.

Most business leaders sense double deals and backroom negotiations. Chances are, a transformation will impact them positively but require a lot of change management, so leaders often weigh the pros and cons in their mind to determine if the efforts are worth the benefits. If they feel the CIO is misleading them, it can become a source of resentment and detraction as the transformation takes shape.

Using competition often creates animosity  

Some leaders try to use competitions to help drive urgency and seek out winning teams and solutions. This can work well when the competitions are open such as using hackathons to test out new technologies or to innovate with selected APIs.

Even when a competition is announced it can lead to animosity, if for example, a team of all stars has unfair advantages or if the rules of the competition are secretive or changing.

For transformations to achieve their goals, it often requires collaboration between teams and people in ways that organizations don’t always manage well. Using competitions inside transformation programs can easily undermine the collaboration required. They may be useful for tactical needs but pitting multiple teams against each other for strategic or longer running objectives is not recommended.

Stressing the importance of data, but not sharing analysis and insights

Just about every organization I know that’s embarked on business transformation is stressing the importance of using data competitively and becoming a data driven organization. In many cases, programs are designed to develop new digitally driven products, enhance user experiences, or improve internal decision making.

Transformations also require explaining to participants why the transformation is important, why selected initiatives have been prioritized, or why specific technologies are selected as standards. Without explaining to employees why a decision is being made, it enables louder voices in the group to question decisions or voice doubts in leadership’s decisions.

Having the staff question and voice alternatives is a good thing for organizations. It helps challenge the status quo and forces leaders to consider diverse ideas.

But eventually, leaders must make decisions, pivot on strategy, or realign priorities. When this is needed, it’s critical that data, analysis, and insights behind these changes is presented to the staff. If leaders aren’t demonstrating data driven decision making, then it’s hard to expect the staff will change their own behaviors.

Overcomplicating transformation programs with too many initiatives

Transformation programs by their nature require organizations to rethink every aspect of their businesses. For example, if new digitally enhanced product offerings are being developed then they often require changes to sales, marketing, finance, operations and technology to support new capabilities. If an organization is going to automate with technology, migrate enterprise systems to SaaS offerings, or innovate with artificial intelligence, it’s going to impact many ways of how people work and collaborate.

Wider breadth transformation programs require leaders to develop strategic roadmaps. Trying to do or communicate too much change too quickly can overwhelm people or cause confusion on execution priorities. This is one reason transformations should start with a small number of strategically important initiatives and then add new ones once organizational capacity to process change is better understood.

Driving a sense of urgency without forcing a mandate

Getting the organization to buy into why the transformation is strategically important is not sufficient to drive execution. Leaders need to explain, ideally with data, a sense of urgency on the timing and speed required to enable a new level of competitiveness.

This isn’t easy. The incentives in most businesses are tied to short term goals, profits, and legacy business practices. Many transformations require the business and its leaders to sacrifice short term goals in order to hit longer term objectives. In addition, most businesses face increasing competition and potentially disruption, so communicating and managing initiatives with sufficient urgency may be mission critical.

This can’t easily be accomplished with mandates, yet leaders may find it slow and difficult to drive consensus, repeat their communications so that people understand the urgency, and develop meaningful incentives to drive commitment. Mandates may help get the transformation started but are very poor substitutes to winning the hearts and minds of the organization.

And that’s the objective in getting a transformation started. Leaders must win the hearts and minds of their leaders, managers, and staff to drive sustainable change and transformation.