Transformation may be defined as to change completely the appearance or character so that that thing is improved. Most people know that the majority of business transformations involve a change to the organisational structure. In many cases, this involves taking an organisational hierarchy and changing who reports into whom. However, this may only be part of the complex puzzle that led to the decision to transform in the first instance. Moving piece A to manager B is quick and easy to do, though it may cause some anxiety and resistance. Unfortunately, if this is the only change, it may yield disappointing results. Since Kotter first discovered that 70% of transformations fail (since updated to 78%), complexity, red tape and regulation have increased. So, today we discuss why only moving the pieces gives you the same end result.
Business reorganisation
We routinely see changes to organisational charts. After all, it is tempting to make rapid changes. Time poor and often impatient senior leaders want to see quick results. If financial results are already starting to slow, the timescale to see benefits gets even shorter. This is only changing the reporting lines on an organisational chart. A proper reorganisation may involve splitting, merging, creating or removing teams, departments or entire business units. This inevitably involves more than just moving people around. Job roles may need to change, be created, redeployed or removed. Neither business processes nor systems may be flexible enough to serve the needs of the new structure. Partners may be confused by dealing with 3 teams rather than just 1.
Usually, such a restructuring happens because senior leaders believe that there are synergies (and cost savings) to obtain. This may happen if fewer roles are required from the combination, for example. There may also be an increase in shareholder value if greater visibility is provided into value creation. The disruption caused may be significant and the underlying challenges and inefficiencies may persist. For example, merging one team into another with poorly-designed processes and systems will not alleviate under-performance. If we leave aside for a moment the need for consultation, people are typically the main focus area.
Why only moving the pieces fails
Some teams believe that they are ‘hamstrung’ by poor systems. Others have lengthy and cumbersome processes that have grown ‘arms and legs’. Sometimes, partners engage multiple team members or teams to get something done, with no clear accountability. The culture and values of the organisation are relevant here. If senior leadership does not live, breath and reiterate the values of the organisation, people tend to pay lip service to them. Similarly, if suggestions for improvement fall on deaf ears, people question why they bother. Finally, if workload continually increases, they receive abuse from colleagues, managers, customers or partners, they are unlikely to be conducive to a driven culture. All-in-all, there are a multitude of reasons for tumult and a multitude of reasons that things stay the same.
Moving the pieces around says to people that the root causes of problems are not a priority. Since most workers in professional roles are not daft, they question what impact a ‘reshuffle’ will have. More recent research suggests that even less than 22% of change initiatives yield the expected results. Yes, leadership moves on quickly, despite not achieving the benefits they desired. Perhaps, they really are too time poor to follow up or they are used to it. In truth, we would like to know how many of the underperforming changes that failed to deliver the transformation objectives were actually changes in reporting lines or simple restructures.
Revisiting real transformation to get different results
Process and digital transformation are two of the most important aspects of performance improvement and increased efficiency. Combined with a revisit to the employee experience, there are huge benefits to efficacy, profits and engagement. In many cases, a lack of resource reduces the success of change programmes. Similarly, a lack of investment – both in time and in money – often leads to limited transformation outcomes. Furthermore, ongoing stagnant productivity can mean that few feel the strain from putting their hand up for change programmes. This is all assuming that the existing leadership has the experience and the will. As a result, many try to duck major IT transformation. Just ask M&S whose compromised IT systems are costing them over £40m per week.
The moral of the story is this. Move a few people around and get the same end result. Invest in real transformation to fix inefficient processes and modernise systems to make it easier to work with you as a business. Albert Einstein’s definition of insanity goes something like this. “The definition of insanity is doing the same thing over and over and expecting different results.” Many problems are ambiguous and opaque, which means they take more time and effort to resolve. Many small inefficiencies conflate into a large problem, which takes a frustrating length of time to fix. The trick is in identifying small problems one-by-one and fixing the root causes. The long-term pay-off is worthwhile but it takes a bold senior leader to sacrifice the short-term to get there.
Don’t settle for the same end results
Think Beyond offers support with change and transformation projects. We offer assurance to check if areas are performing as well as they should. We also offer market research and multi-year scenario planning. Finally, we provide programme support to deliver your transformation objectives and benefits.
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Finally, why not check out what we can do or our recent award for digital transformation.