A Tangible Approach to Transformation Execution

We’ll be coming back to this picture later in the post.

Most transformations fail. We at Tangible Growth have seen it happen multiple times. Research shows the failure rate is somewhere between 70–90%. We’re excited to share with you what we’ve learned so far and productized into a transformation model that helps to deliver results.

We at Tangible Growth are an experienced bunch of transformation executives; we’ve had the privilege to work with various sized companies from some of the biggest in the world to smallest in the world in tackling various leadership and transformation topics.

One thing we’ve learned is that it’s never about the lack of passion, goodwill, or aspiration and ideas worth striving for that have been the issue. It’s always boiled down to execution — especially scaling the execution and innovation when the company grows above a hundred people and the complexity increases.

Nowadays the increasing speed of change in the business environment means that also established companies need to be able to run multiple internal transformations in parallel to be able to even retain their position.

Our model distills a lot of wisdom from various sources into what practically and simply WORKS in leading large-scale transformations and increasing an organization’s change adaptability. In other words, making change management work.

Set the scene — most transformations fail

“Many companies create a PowerPoint deck detailing their strategy, send it out via email, and then call it a day” — Paul Donaldson, Global vice president of strategy at AB InBev.

How was the last transformation you were a part of? Do you think that it met its original goals?

A few examples we have encountered lately:

• A new bold strategy of transitioning to a new market segment — big investment in the launch, new end of year targets — only to learn that after the first year targets were missed as no emphasis was put on understanding new buyer persona and what changes need to be made in the offering
• A strategy where only the year in its slide deck is updated — nothing has progressed in the chosen direction. Owners and executive team are on board with the direction, but cannot break the change down into concrete actions and drive it forward in a structured fashion
• A brand refresh that only changed the company website visuals. A massive brand and values renewal that seems to not affect anything internally — no changes in behaviors, marketing messages only change because more control is being imposed in the gates to ensure consistency of message
• The most important project kicked off only to be replaced a month later by another most important project — to the extent where the people are so busy working on everything so important that nothing seems important anymore
• Transitioning internal services to become more business-driven — sounds nice on PowerPoint, but the behaviors and competencies do not seem to build up after all
• Post-merger integration that had all the chances to succeed but failed due to failed culture integration, lack of transparency and conflicting personal incentives

Because of some of the challenges listed above, most changes take 18–24 months before they start bearing fruit — by then organizations already need to be on top of the next change to remain competitive. The gap between market need and the transformation outcome is always there; to solve this, we need to increase the clock speed of aligning better and faster with an ever-moving target.

Most common problems with transformation execution

One of the key challenges that we see with transformations is that people try to take a shotgun approach of centralized messaging and then repeat the message over and over again — not taking into account that change typically needs to happen on team and individual level. For large scale transformations to succeed and to enhance the transformation capability, or change adaptability, tooling and a structured process is needed. When these tools and processes are lacking, people send generic abstract emails and wish for the best.

Looking at the change from an individual’s perspective, they need to be able to tick all the boxes above for a change to happen — the model is from Lippitt, 1987, and has since been updated several times. We will delve deeper into this model later in this blog series.

In addition to Lippitt’s model, many of the typical pitfalls include

• Lack of agility, sticking to rigid plans
• Focus on numbers at the cost of neglecting the importance of ensuring shared understanding and focus on the change on a team and individual level — this understanding always needs to be built, but unless it’s a focused effort, often it means at least one or two failures to meet goals before the understanding is erratically built.
• Middle management is not engaged, nor are they driving the implementation (either because lack of buy-in, being too busy or lacking understanding or support)
• Lack of discipline and focus in choosing well the battles in daily life, and driving those things to completion
• Culture transformation is typically on a very abstract level. Individuals and teams don’t properly think it should be reflected in their behaviors — it also doesn’t gain as much emphasis as the direct business KPIs do
• Lack of data to show and measure progress on topics that are abstract or difficult to quantify

“The Tangible Growth way”

We have taken all the above into account with our model that is described in the picture below. The model has shown tremendously good results so far. We have seen organizations that adopted this model alongside digital tooling to be able to, for instance,

• Increase execution speed by 50% to reach the benefits of the transformation whilst increasing employee engagement
• Reduce the cost of internal services by 20% as share of revenue whilst increasing employee engagement
• After two workshops, succeed in clarifying the strategy implementation plans and following 3-month execution plan — and then subsequently delivering on those plans. Previously strategy had not progressed for a year and confidence in execution was low.

When done well, strategy becomes a verb –daily actions and decisions the employees take to reach the purpose of the company.

The components of the model are (we will delve deeper into each of these in coming blog posts):

• Purpose as a means of looking at what kind of impact the company aspires to have on their customers’ and stakeholders’ life.
• Strategy and scenario work to make well-informed choices to maximize the impact of the purpose in the long term, as well as drive shareholder value
• Transformations as the means for the organization to move from where they currently are towards where they want to be. Examples of transformations are typically the bigger shifts in operating model, capabilities, must-win battles, turnaround projects.
• Communication and context sharing as a means to share and combine all the transformations under one umbrella and tell: why the changes are necessary, how they affect our customers and employees, what are the other things that were considered, what are the most important focus areas, etc. Here storytelling works wonders.
• Common Understanding to ensure that people have a similar idea of what the chosen direction means in daily life and immediate focus on unit and team level — what are the learning objectives, changes in behavior, things to learn and do differently. Making the often-abstract change understood in a similar tangible fashion by everyone.
• Individual Insights as a means to collect feedback, thoughts, and sentiment from employees on how they are adapted to the direction, what concerns and clarifications they have, or to seek guidance in rapid decision making to let people influence and give their views before a decision is made
• Objectives and Key Results as a means to keep the engine running with a short-term execution focus — with the amplified understanding of what needs to change — defining the winning outcomes for the coming 12 and 3 months. This part of the model has been covered in detail also elsewhere and has been made famous by companies such as Intel, Google, and many more.

To increase the success rate and efficiency of transformations, all of the above need to be done — repeatedly, iteratively, in a 2-way communication manner The desire to simplify transformations into a row on a project portfolio sheet is understandable, but that’s often the root cause of the issue. Transformations should be seen as a journey addressing multiple different areas at once at different parts of the organization — and no two teams need to change the same things for things to succeed.

To quote Alan Jope, Unilever’s CEO: “Our company is guided by three deeply held beliefs: that brands with purpose grow, companies with purpose last, and people with purpose thrive.”

This belief topped with a culture that thrives on execution focus is a great combination. We’ll be digging a lot deeper into the high execution culture in later posts as well.

So in short –

1. be clear on why the company exists, why the strategic choices are the best ones for ensuring lasting impact to customers in the long run,
2. how the chosen transformations are linked to both customer value and strategic choices, what those transformations look like in the eyes of the customer and employee,
3. make sure that people build common understanding of what needs to change in the short term for transformation to succeed and become tangible in their daily life, and what are the possible long-term learning objectives to get there,
4. listen to employees in a structured manner to gauge their adaptation to the chosen direction as well as ideas for decision making,
5. and tie in all of the transformations and learning objectives into specific Objectives and Key Results that measure and forecast the progress on a 12- and 3-month execution windows.

Rinse and repeat until you’ve reached the desired level of maturity, or until a change in the market presents a new opportunity worth going for — which is likely already within the first 3 months anyway.

Culture-wise continually drive for higher engagement, autonomy, and agility, and teach the leadership models and appreciated behaviors across the organization that support grass-root level decision making. Give everyone a chance to adapt to the culture, support them, and gradually show the door to the ones that choose not to go in the same direction in terms of behaviors and ways of working— everyone is entitled to great co-workers.

The above is simple — but not always easy. That’s why we built a tool around this to help ramp up the execution focus and change management capabilities of a company.

We have built an Enterprise SaaS tool that helps you ensure you turn your purpose or winning aspiration into tangible impact for your customers.

The tooling is needed when you consider that the company is typically not undergoing one transformation but several at a time– meaning we need overall visibility and the teams need clarity in what to focus on and prioritize in the daily life across all transformations.

It helps to direct management attention to areas where execution confidence or maturity is low and increases the transparency and business-driven collaboration radically, as well as reduces a lot of overhead from replanning and goal setting in general.

What’s coming next

If you’d like to hear more about transformation leadership, change management, strategy execution, high execution culture, autonomy and agility at scale, do follow our publication here on Medium.

If you’d like to learn about the tool, check out our website here or contact us through the website — we’d be happy to arrange a demo and discuss your needs further.

We’ve also built a Transformation Canvas that makes it easy to make sure you’ve covered your bases with the necessary human factors of the transformation. It’ll be made available starting with participants of Nordic Business Forum’s Rethinking Business Online Event. If you’re not attending, worry not — follow our publication and we’ll publish a post as soon as it’s available. We’ve had extremely good feedback and experiences with our current customers on it, and it has reduced the effort it takes to succeed in transformation even without our digital tool.