Recent research suggests that only 18% of transformations are successful. Add to that the fact that around 5% of AI projects generate a return and we have a challenge. Somehow, substantial amounts of organisational capital is wasted during transformation programmes. Despite setting out with good intentions, they failed to reach their objectives. Why does this happen? What can leaders do to boost success? Where are the failure points? How can we avoid overruns? To protect that precious capital, we discuss leadership in the age of constant transformation.
Constant transformation: Leadership in the 2020s
Goleman defines leadership as a set of skills centred around emotional intelligence (EI). Estimates number the definitions of ‘leadership’ at 850-900. There are a number of traits that undermine emotional intelligence, such as a lack of awareness and a lack of empathy. Others include an inability to control impulses or outbursts, negativity and inauthenticity. Ultimately, leadership skills were tested to the extreme since 2020. Leaders have dealt with a pandemic, war in Ukraine, an energy crisis, a change of Government, ‘tariffgeddon’, a downturn and Gen-Z pouring into the workforce. Constant change is the new normal.
Leaders have had to work through work from home (WFH) policies, return to office (RTO) policies, new sourcing, digital transformation, new taxes, new tariffs and new employee generations while grappling with AI. All this leads us to ask the question, “How are leaders adapting to constant transformation?” Looking at internal photographs of JP Morgan’s new Park Avenue HQ, it may suggest that many leaders haven’t. Rows of adjoined desks with 4 screens each scream uniformity and conformance, which may be incongruent with post-pandemic and Gen-Z expectations. Similarly, if having AI forced upon you is burying you or your team under AI ‘workslop’, you are not alone. Recent research puts the accuracy of some models at below 60%. If leaders are angry about WFH, misleading about the benefits of AI or failing to take mental health seriously, these are a few examples of a lack of EI.
Leadership for the constant transformation paradigm
Have we seen a period this turbulent since the end of WW2? A distant echo of economic stability in the early 2000s has given way to crises, wars and upheaval. Similarly, timid inflation and low interest rates were taken for granted until 2020. So, what can leadership do to prepare for or adapt to constant transformation? How can you step up the game when your organisation needs to act like a speedboat rather than an oil tanker?
Here are 5 recommendations to lead for constant transformation.
1. Plan, but retain flexibility for change and emergent strategies
Many leaders dread planning – the ‘dead’ time that takes you away from leading. In many cases, it is viewed as a once-per-year, retrospective review with a story overlaid on top. Some see it as pulling out the crystal ball while others wait for the gaffer to tell them what to do. However, the best strategies and plans leave room for flexibility to adapt. Sure, you can set a baseline that if all goes predictably, you are likely to achieve. But, leaving room for making change, adapting plans to emerging opportunities and possessing capability flexibility can help you exceed that baseline. Recognising the possibilities, finding the opportunities and retaining an entrepreneurial approach can go hand-in-hand. Therefore, plans should not be static documents, presented once and pushed into a drawer. The organisation must also look outwards, continuously adapting the strategy and adding to the plan where it can win.
2. Provide clarity
It may sound cliché that people need to know what they should do. However, do they truly know where their responsibilities start and finish? Does your culture encourage them to stretch? Do they know how their role and objectives link to the company’s strategy and goals? Are they empowered to solve problems? Do they know the limits of their authority? Are they aware of all of the tools and support available to them to succeed? If we take a sporting analogy, giving a competitor access is just the beginning. The learning, training, nutrition, behaviours, clothing, equipment, the rules and the competition are all important. Without knowing all of this, the athlete may not fully understand how to compete to the best of their ability. If they do, they maximise their chances of success. If part of a team, they can help the entire organisation succeed.
3. Create an innovation culture
Curiosity is a trait that leads to new ideas, breakthroughs and competitive advantage. It can solve problems, improve products and services and increase efficiency. A culture of innovation, ideally featuring many diverse points of view and professions, can lead to rapid progress. Problem-solving, ideation, creativity and a culture of psychological safety can increase adaptability to change. Such an organisation is perhaps more open and amenable to a constantly transforming world. Though it is tempting to behave like an ostrich, efficiently going about your business and keeping your head down, the truth is that you need to be more like a meerkat, constantly scouting for danger and opportunity. Statistics show that innovation-led companies have superior financial returns and stock valuations.
4. Increase accountability
Many organisations, particularly when they are growing, become complacent and overlook some inefficiency. The context is also important, however. A fast-growing, cutting-edge firm that experiences a sudden downturn will drastically reduce dead weight and cut costs. A slow-growing, steady organisation with predictable revenues may instead raise prices and squeeze suppliers. The former is a little like Icarus, flying too close to the sun and hoping not to melt. The later is akin to his father, Daedalus, who didn’t take such risks but never flew so high. The former may rebound to orbit, whereas the latter may eventually find that a tinkering, risk-averse approach never got him anywhere. Remember, a problem shared is a problem halved. If nobody is accountable, the mountain won’t come to you. If nobody wants to take a risk, own a project, speak out or step forward, the leadership has to own it instead.
5. Embody purpose
When clarity, innovation and accountability are combined, you get change delivered through teams at every level. Crucially, it gets delivered without leadership present in every situation, getting into every problem and forum. Teams know what to do, have the freedom to improve it or change it (with clear boundaries) and can get it done.
When the what is coupled with clarity of purpose and values, also referred to as ideology, it gives people a representative picture of why they, and we, do what we do and how we do it. The what, the why and the how help to enable the vision. Sometimes, a charismatic leader who knows how to inspire people takes an organisation down the wrong track. This track may not be true to the purpose and the organisation’s values. Domino’s push into fried chicken and Jaguar’s push into an all-electric present are two recent examples. Did they commit sufficiently to the strategy? Did it align with the core ideology of the business? Is everyone on board with the transformation? Leaders must ensure that purpose runs ‘soup to nuts’ and that it represents the entire organisation’s psychology or feel.
Think about your leadership support for constant transformation
We haven’t even mentioned a key resource in this article: time. Many leaders are overburdened by investor demands, meeting analysts, managing board relationships, attending committees and governing the organisation. This is further complicated in a global multinational or a regulated industry. Others are dragged into firefighting with every day feeling like whack-a-mole or run the gauntlet. In such cases, a third party can support you and the organisation in developing a sustainable capability and culture for transformation. A management consultancy also brings solutions to challenges, frameworks and bandwidth to focus on only what is important. It also works with whole teams, departments and divisions.
If you would like to find out more, simply check our overview of change services.
Additionally, if you would like to chat about your challenges, simply reach out to us.
Finally, why not read related content on AI project success or why you need to invest in a transformation.