How do businesses rise to the challenge of change? Mark Kissack and M'Bayang Thiam share their insight on making company transformation a success.
No business is safe from disruption in
today’s volatile, uncertain, complex and
ambiguous world. And those who
misjudge this can very quickly find
themselves in trouble. As former
chairman and CEO of General Electric
Jack Welch noted: “If the rate of change
on the outside exceeds the rate of
change on the inside, the end is near.”
When disruption occurs it is often too
late to react and that is why businesses
need to be proactive. Successful
organisations are constantly identifying
and assessing potential business threats
and opportunities. They are also rapidly
preparing their capacities to navigate
change by building change agility.
Despite numerous change management models, less than 30% of transformation initiatives are successful, according to management consultant McKinsey & Company. We know what is required to achieve change, as Kotter’s eight steps of leading change illustrates (see Kotter’s eight steps change model). And yet the success rate has not significantly improved over the past 20 years. In respect of digital transformation, McKinsey’s survey of October 2018 found only 16% of organisations reported successfully improved performance.
The path to success
So how can you be in control of your
transformation journey? How can you
accelerate change adoption and
execution successfully? And what are the
right metrics to measure? To help, we
would like to share some of our insights
gathered from leading or assisting with
change initiatives at more than 20
companies worldwide.
Transformation requires moving from
the unsuitable ‘command and control’ model to one of ‘empower and support’.
To continue delivering business
performance in a rapidly changing
environment, it is imperative to delegate
accountability and responsibility
throughout the organisation.
Effective change management
empowers all levels to free up time for
value-creation, including innovation.
We have seen resistance to change turn
into creativity. In one case of employee
empowerment, a temporary worker
found a solution to eliminate 50% of the
waste from a process that highly-qualified
engineers had not thought of (see Employee empowerment). What non-value-adding activities
have you stopped to focus on value-adding activities?
Success involves creating a safe environment for continuous improvement, experimentation and value-adding activities. It all starts with understanding customers and focusing on their needs. In today’s world, the customer has access to more information than ever before. They are attracted to purpose-driven organisations which are dedicated to constantly satisfying customers’ requirements. Rather than pay for internal inefficiencies, customers will find a supplier that efficiently meets their needs. Successful organisations also apply this approach to internal customers because focusing on them results in improvements to the entire value chain.
Effective change management empowers all levels to free up time for value-creation, including innovation
Eight types of waste
Kotter's eight steps change model
- Create urgency
- Create a coalition
- Develop vision and strategy
- Communicate the vision
- Empower action
- Get quick wins
- Leverage wins to drive change
- Embed in culture
Lean and agile starter kit
- Who is your customer?
- Customer pains and gains
- Value adding vs non-value adding
- Five WHYs to find the root cause
- Eight types of waste
- Effective brainstorming
- Process improvement mapping
The right tools
In addition to these methods, there is a whole toolbox of Lean and Agile solutions that can be used to support the transformation depending on the specific circumstances.
Perfect environment
Such an environment also gives the opportunity to develop change leadership capabilities in our teams, motivating and rewarding people to come up with new ideas.
Once introduced to the eight types of waste, employees can identify and resolve waste throughout the organisation. For the manager, it reinforces their role as coach (see ‘Eight types of waste’). In a successful business transformation, employee satisfaction improves considerably.
Particularly for the finance function, building a change management capability should lead to non-value-adding tasks being automated. And this means finance professionals will be able to provide the more value-adding partnering role within the business.
It is all about creating a structured sequence to achieve the right recipe for your own organisation’s specificities, challenges and opportunities
Blended just for you
This journey is built from assessing the situation you face and your change capability. What is important is to make sure that all the change elements fit together and interconnect. These elements should include goals, values, people, processes, projects and technology. If one is missing, the ‘virtuous circle’ is not created. That’s why we believe you should first focus on diagnosis to deliver a specific solution rather than deploying a standard formula. In addition, the diagnosis, besides providing a custom-made change journey, also allows decision-makers to sponsor the change.
And there's more
Change is not a finite project, but rather a continuous process. Instead of a quick fix, it is important to put in place a continuous cycle to build the capacity for current and future changes. Similar to structured project management, we’ve seen structured change management helping decision-makers to feel better equipped and in control of their own transformation journey.
The key to success starts with a deep understanding of customers’ needs and then engaging and aligning the organisation to meet those needs in an effective manner. In today’s world there is no standard formula for change success. Instead each organisation has to formulate its own change recipe, designed by combining the right ingredients. A thorough change assessment equips organisations to deliver the products and services that will delight their customers.
Employee empowerment
The supervisor explained that the breakthrough had happened thanks to a temporary employee. The manager was keen to meet the employee, who had cracked a problem that trained engineers had been unable to solve.
The employee explained that he had found a way to make his work more efficient and that this had given him time to reflect. He thought of what would happen if the ingredients were mixed in a different order. He shared his thoughts with his supervisor, who supported him to run some tests. The tests were successful, and the process was adapted.
Further reading
- 'Exponential organizations' by Salim Ismail, Diversion Books (2014)
- 'XLR8' by John P Kotter, Harvard Business School Press (2014)
- 'Getting the right things done' by Pascal Dennis, Lean Enterprise Institute (2006)
- 'Bridging the worlds of strategy and execution', overview by M’Bayang Thiam, Iggybook Studio (2018)
About the author
M’Bayang Thiam, entrepreneur, business adviser, speaker, writer and expert in transformation and leadership development.
About the author
Mark Kissack, entrepreneur, business adviser, speaker, writer and expert in transformation, KPIs and performance improvement
Download pdf article
- Make company transformation a success
Business & Management Magazine, Issue 274, May 2019, p.24-26
Related resources
The ICAEW Library & Information Service provides full text access to leading business, finance and management journals. Further reading on making transformation a success is available through the articles below.
You are permitted to access articles subject to the terms of use set by our suppliers and any restrictions imposed by individual publishers. Please see individual supplier pages for full terms of use.
More support on business
Read our articles, eBooks, reports and guides on finance transformation
Finance transformation hubFinancial management eBooksCan't find what you're looking for?
The ICAEW Library can give you the right information from trustworthy, professional sources that aren't freely available online. Contact us for expert help with your enquiries and research.
-
Update History
- 15 May 2019 (12: 00 AM BST)
- First published.
- 25 Nov 2022 (12: 00 AM GMT)
- Page updated with Related resources section, adding further reading on making transformation a success. These new articles provide fresh insights, case studies and perspectives on this topic. Please note that the original article from 2019 has not undergone any review or updates.