Whether it is Covid, technology, the environment or work from home, there is now pressure on firms to transform the way they do business
Companies need to reinvent themselves in order to survive disruptions like flexible working, technological advances and changing market and regulatory conditions.
But business transformations are more likely to fail if firms don’t listen to and nurture their employees, wasting time and money on changes that nobody believes in.
Research from EY and the University of Oxford’s Said Business School found that 85pc of senior leaders have been involved in two or more transformations in the last five years, with 67pc experiencing at least one underperforming transformation during this time.
This represents significant wasted investment, time and energy.
The research found that a more contemporary and effective way to drive change is to pay more attention to the human factors and emotions at play.
Transformations are more than twice as likely to succeed if companies follow six guiding principles, which we identified using predictive analytics.
Leadership is the top driver for transformation success, according to both employees and leaders. Recently, we’ve seen a shift in employee expectations and relationships with leadership.
Almost half (47pc) of respondents in high-performing transformations said leaders accepted ideas from junior employees, compared to 29pc of respondents in low-performing transformations.
Leaders need to be accountable and emphasise a “we, not me” approach by fostering collaboration, driving consensus, and creating two-way communication.
Leaders need to recognise their own limitations, be honest about their fears, anxieties and self-doubt regarding the transformation, and acknowledge that they do not have all the answers.
Complex transformations need to have a clear vision and purpose which is clearly articulated, and that everyone in the organisation can support and connect with.
Most workers (71pc) believe that clearly articulating the case for change will make the transformation more successful.
For this vision to be real and tangible, leaders need to clearly communicate the ‘why’ for the change and foster true belief in the vision rather than simply understanding it
The impact of transformation can take an enormous toll on the workforce.
In underperforming transformations, employees felt unheard, unsupported, and stressed.
Organisations must listen to what their people have to say, understand the source of their concern, and harness the right emotions to keep employees engaged and motivated.
By doing this, organisations can identify early warning signs and make adjustments to keep the transformation on track.
Transformations are not linear. They have ups and downs and stops and starts.
It is necessary for leaders to create autonomy for the organisation to execute the change and ensure clear roles and responsibilities are articulated and decision-making authority is delegated.
Employees need to be empowered and involved in the transformation, and leaders should encourage experimentation by shifting from a “don’t fail” to a “fail fast” mindset, and promote the mindset that small failures can lead to big successes.
Most of us have experienced first-hand the ever-changing nature of technology so it’s important the right technology is used to fulfil the vision and to facilitate the process of transformation.
Organisations need to identify the emotional component of introducing new technology and the fear it may create.
To succeed, organisations should prioritise progress over perfection and identify competencies required for future success and develop targeted workforce, training and development plans to address capability gaps and alleviate any negative emotions.
Culture plays a fundamental role in transformations and organisations need to provide a safe space where new digital and agile ways of working can help nurture innovation and employee engagement.
Culture needs to be factored in and consciously defined and implemented as part of the programme.
For transformation to be successful, leaders and employees need to collaborate to redefine the balance of delegation, ownership and empowerment.
Successful transformation is critical for organisations to thrive.
To succeed and realise long-term value, organisations need to change the way they transform, and realise that change is not managed but experienced.
By harnessing the power of their people, and by implementing practices based on each of these six drivers, leaders can put their organisations on the path to transformation success.
Laura Flynn is partner and head of people consulting at EY Ireland