Why Business Transformations Fail
All too often business transformation hopes, plans and resources wasted. Is it a matter of strength, poor planning, indecision, a wrong investment or…?
A constant search and a checklist would really help all of us who are consciously or unconsciously involved in the huge need for transformation, that is imposed by the need for business survival and not only.
It is my purpose here to summarize, after years of research and experience on the subject, classified into sections, the main causes that can determine the added value for a Business, as a result of implementing a change/transformation project.
Let’s start from the failure cause sections:
Leaders. Approach. Plans. Process. Execution.
Many small or larger causes are covered within these sections and may work alone or in cooperation with each other, few or many of them.
It is important, to start from the most critical section, which are the people and indeed the Leaders.
If the organization has a leader who does not see or cannot see the need for a major change, the transformation is doomed to failure.
Lack of leadership commitment, to see the transformation through to the end, to deliver the required business results.
Without strong leadership it will be difficult to move managers from their risk averse roles to change.
If not creating a strong sense of urgency at beginning, will not generate required motivation from the staff / stakeholders. Successful transformation depends on everyone being on the same page and moving towards with the same vision to the same goal.
If senior management is not honest about the present and the marketplace, this can be a driver for failure.
The next failure cause section to look at, is the angle from which the leadership sees things, i.e. the Approach.
Using only traditional [waterfall] only approach, instead of an iterative/hybrid waterfall/agile approach has a very high proportion of business transformation failure.
Transformation that focuses on present issues only may miss the transformation & innovation for the mid-term future. [Focus on now]
If the company is doing well, it is hard to promote and support change for the better from the status quo [Things are too good]
The importance of the post-implementation phase is great for success. Failure to plan for and measure post-deployment, including end-user adoption and ownership of new change and monitoring of behavioral shifts.
For a portfolio project that has to run the same period for the transformation, the prioritization is crucial. All projects scheduled at the same time with no prioritization will result in resource constraints issue.
Let’s come to the Planning as a failure factor section.
Obviously an inefficient execution of the plan is the first consideration in this section of failure risks.
And he most common factor that could drive our transformation project to failure, is to underestimate the amount of effort that is required for a true business transformation.
A plan is important but a plan with no flexibility will fail. It is not possible to see all the unforeseen challenges and risks so having long term. Detailed plans upfront beyond the visibility of the organization is a recipe for failure. [Agility]
Having wrong balance between planning, agility projects, quick wins, timeline, budget & resources, failure awaits. Sometimes is difficult to not fully understand the overall cost (resources, processes, systems) to achieve the desired result. So, the underestimation will be a very dangerous factor.
Only those who don’t try don’t make mistakes. Mistakes will happen and some with a big impact, so leaders must be resilient to achieve the end goal.
The next section to think is about the Process you follow for Implementing the Transformation.
It is always the diagnostic or discovery phase, the prerequisite for good planning and successful implementation. This is not a phase that you should skip. The skipping of this detailed mapping and analysis, of the as is situation—cost, time, data, workflow, cycle time, customer requirements, etc.—often leads to failed to be implementation.
Most (digital) transformations focus more on the technical solution than on the processes around the solution, including pain areas, broken processes, bottlenecks and delays, etc.
The question of creating business value is crucial. A Failure to establish the “What’s in It for Me” including What is happening, Why, to Whom, When, and How it will impact processes and systems leads to disengaged stakeholders.
The future situation we call to be has to be very well designed. Poor to be state design and documentation, including future roles, KPIs, system interactions, channels, inputs, outputs, and improvement opportunities, makes the objective look poor and leads to demotivation for the value of the transformation.
Always bear in mind the risk of lack of enterprise-wide business process to implement the transformation strategy. Senior management often fails to implement the to be state and reverts to the as is way of doing things.
Final and critical phase of a long process, the Execution will judge the whole effort for transformation success.
Bear in mind how to get the balance, wrong with the right mix of internal staff and external vendors and consultants. It is not possible to see all the unforeseen challenges and risks so having long term detailed plans up front beyond the visibility of the organization is a recipe for failure.
Continuous improvement is a necessary mindset and not just a process. True transformation is never complete but is an evolving process of continuous improvement.
Do not extend the overall duration too much as this has serious cost and quality implications. A long implementation time will have demotivated staff that does not prioritize efforts based on value and achieving quick wins with visible results.
Transformation failures can occur not from a big event but death from a thousand cuts, so effective communication and change management is key.
Infrastructure is valuable prerequisite for critical projects. Not having a process to align the infrastructure to support the business transformation could lead to failure.
In addition to the above we have to take into consideration 6 more distinguished points that could lead in a painful failure.
Poor Communication and Training
Lack of (early and continuous) communication and proper training at all levels of the organization is cause of failure.
Lack of Change Training
No Change Network identified to support the change, including change agents—who drive the change locally—and change leaders, who own the change.
Too Much too Soon
Doing a big bang transformation approach can overwhelm staff / stakeholders especially if they have not been properly prepared for the change.
Too much all the time
Another cause of failure could be transformation burnout, the resulting fatigue that occurs due to constant change.
More focus on Change Methodology than journey
Organizations are often stuck on textbook change methodologies without adapting to own specific needs and the change journey.
Underestimating the efforts to move staff / stakeholders from their comfort zone to new state.
Business Transformation is not just a Project, it is an ongoing Survival Project that needs planning, inspiration and investment.