Five things to get right for a successful organisation-wide transformation
Learnings from the field around the conditions to successfully launch and deliver and large-scale systemic transformation.
A few weeks back, I was invited to talk at an International Airline Symposium to a group of executives from across the sector: airlines, airports, aircraft manufacturers, motorists, etc. Talking about disruption, here is an industry that just went — and is still going through — a sobering experience.
My first impression from the conference was that the average strategic response from those organisations is not always in line with the magnitude of the disruption. Many of the conversations revolved around incremental improvements: harmonising the sanitary standards, improving and personalising the customer experience, better leveraging technology (in particular, AI and big data), expanding offerings, becoming even more cost-effective or ‘greening’ what can be in the value chain. While all of these are relevant and could unlock a lot of short and medium-term value, none of them fundamentally questioned the industry’s current paradigm. Yet, we observe profound and existential challenges from external events and trends (the pandemic only being one of them).
For my intervention, and under the guidance of our skilful moderator Zhihang Chi, I chose to tell a story from another sector — age care services to be specific — to help shift perspective away from the current paradigm of the industry and focus on the core challenge of systemic transformation.
My story also started with a significant disruption when the government announced an unexpected yet fundamental change in the industry regulation. I then went on to explain how a visionary CEO developed a 3-horizon strategy focused…
- first on emergency response to stay in business,
- second on business model innovation to exploit the current model better,
- and third on business model transformation to challenge the known paradigm not only of the business but the entire industry.
Obviously — none of it was easy — and the pathway was paved with challenges and crises, as much as breakthroughs and achievements. Looking back, I then concluded what I believed were the key drivers for success in this change journey.
- Purpose-driven. From the early days, we implemented a co-design process to formulate a purpose statement with many collaborators. This purpose was societally transcended and transcended any business or contextual considerations. It wasn’t about how or when they would improve the top or bottom line, but rather it expressed a view of what impact the organisation wanted to have on society. This purpose became a northern star that brought everyone together in a time of troubles when divergences and tensions could have endangered the transformation.
- Inclusive and cross-sector. We recognised early the need to open wide the doors and windows to let new ideas and perspectives refresh the air. Internally, the project was inclusive and transparent. Anyone could participate on request, and many were involved by design to ensure that we would engage with all the functions and hierarchical levels from Board members to Front line staff. Externally, we opened the conversation with an open innovation process that created an opportunity for clients, communities, universities, local government, start-ups or established businesses, etc., to get involved. The unfiltered influx of ideas surfaced several left-field questions that eventually led the company to venture into adjacent industries to theirs.
- The right leadership. The CEO herself created and held the space for a genuine re-invention — despite intense opposition at times — which was a defining condition for success. With her, and through a carefully designed sequence of collaborative interventions, we created the conditions for Executive Team alignment and role modelling, as well as Board alignment and sponsorship. Their collective ability to hold the space when nothing was sure was just remarkable.
- The widespread shared ownership of the process and the outcome. People own what they contribute to creating. While the leadership team played a critical role to create a context, we made sure that the entire organisation took shared ownership of the transformation. Adopting a ‘co-design by default’ principle early ensures that nothing was done “to anyone” without their involvement. This was true internally where we helped dozens of collaborative workshops on all topics every month, and it was true externally by ensuring that clients, partners and the broader communities were also invited to those conversations.
- A shift in the strategic mindset. It was clear from the get-go that the end goal was to go beyond inventing and implementing new disruptive business models (that was only horizon 2) but rather to build and sustain the ability to do so as standard practice. The executive team recognised that all business models are on a trajectory towards obsolescence and it’s only a matter of time before what we invent today becomes obsolete. Progressively, this thinking led us to embed resilience as a core design principle for any key decision around… organisational structure, governance, delivery model, etc. Every aspect of the new model had to be conceived to facilitate the unexpected emergence of new business models. From a strategic planning perspective, it implied shifting from developing and regularly updating a strategic roadmap (usually based on unverifiable assumptions) to building the ability for weak signals detection, sense-making, agile testing of strategic options, and swift decision making to eliminate or scale them.
Reflecting on other transformation stories from various industries and regions, I have consistently found that these five factors always define success. Unsurprisingly, those points are equally relevant to the Airline industry. In his most recent book, ‘Airlines in a post-pandemic World’, industry expert Nawal Taneja reaches similar conclusions.
From the perspective of an executive today, that leaves two questions: How do I embrace my unexpected disruptions? And Do I have to wait until I hit the wall before transforming my organisation to make it persistently innovative and resilient?