Over 70% of transformational programmes fail, costing organisations trillions of pounds globally every year and yet most organisations currently have a transformation programme ongoing or are thinking of starting one.
A staggering statistic whichever way you think about it. Whether in terms of the money wasted, the resources squandered, the opportunity cost, or the resulting organisational fatigue.
There are many well-documented reasons why traditional transformation programmes fail. In my experience, these fall into two main categories. Firstly, and most importantly, people-related challenges and secondly, the technical approach to planning and execution of the programme.
Most failed programmes experience a mix of issues across both categories:
People, purpose & culture
A vision that lacks deep emotional purpose will not create sufficient engagement to energise people to commit to delivering the change. A change programme feeds off the energy, skills and tenacity of teams and this commitment to the cause can quickly ebb away when the going gets tough, which undoubtedly it will at some stage. Emotional engagement to a greater cause will stand the test of a transformation in a way that the promise of more money for shareholders or lower costs never will.
A misaligned leadership team delivering mixed messages and commitment levels to the programme will struggle to create the necessary environment for change to thrive.
The alignment of a leadership team, however, is not simply a lack of active disagreement with the programme. Leadership teams need to understand fully the drivers for change, what it means for them and their teams and be prepared to stand up for the cause. Any divergence from this will breed suspicion, impact engagement levels, and cause rebellion amongst the troops.
A transformational programme leader who is not senior enough or lacks leadership skills will struggle to secure the momentum required to deliver a programme successfully. Leadership is an essential ingredient of change and must be led and be seen to be led from the most senior levels of the organisation with the full support of the top team. Equally, there is the necessity to have a respected leader rather than an experienced programme manager in this vital role. Success comes from winning hearts, engagement across all stakeholder groups and alignment of incentives. The ability to accelerate and decelerate the programme in line with the ebbs and flows of the everyday business demands and the levels of change fatigue being experienced is also fundamental to avoiding the programme imploding.
It is essential to recognise that the skills required in a business post-transformation will be different to those which exist at the start. It can be easy to underestimate the shift in skill sets, capacity and experience that will be required after the transformation. You then have a new shiny vehicle without the expertise to drive it.
A traditional transformational programme is massively energy consuming, resource heavy and continues for a protracted length of time often with little benefits seen for a long time. The jaw-dropping costs that can be estimated for such a programme upfront, often result in a chipping of a resource / chipping of resources to come to an agreed budget that stakeholders are willing to accept for the potential returns. Instead of reducing the scope of the programme in line with the reduced budget, often less resource is expected to complete the original scope of work resulting in a shortage of skills, attention to detail and ultimately fatigue and stress. Most transformation programmes also go over budget, overrun their schedules and even when they are completed, leave defects or inadequacies post-implementation. Without the necessary resources to settle the programme into a steady-state, it’s highly likely it will never get there.
Planning & execution
A traditional consulting approach to planning a transformation programme envisions a static endpoint and an intricate, intertwined path to get there. This approach demands a disproportionate amount of upfront investment well ahead of any value being created and change controls prohibit plans from flexing with the changing environment or learnings gained along the way. This approach is suited to a steady-state, hierarchical environment with a high level of certainty that the environment around them will not change! There are not too many organisations that now fall into this category!
A programme that focuses on cost reduction rather than prioritised opportunities for growth, customer engagement and value creation dumbs down the potential of the opportunity, stifling innovation, imagination, and customer-centricity.
Focusing on growth and possibility generates energy, engagement, and a desire to be part of something bigger, all essential to a successful programme of change.
Too little or too much planning is equally damaging for a programme. Businesses either plan for months in minute detail or they jump straight in to work on the sexy stuff, such as analytics or digital, without focusing on the foundational enablers.
Too much focus on programme activity rather than the outcomes to be delivered can seriously divert a programme down a blind alley. It is amazing how easily focus can shift through overzealous project management to ragging and ticking off activities on the plan rather than keeping sight of delivery of the outcomes identified as indicators of success.
If what is measured gets done, then pinpointing and tracking the right KPIs for a programme is an essential part of delivering a successful outcome. Tracking of the wrong KPI’s, way too many or way too few will all divert attention into areas that do not deliver optimal value, wasting energy and resources and causing frustrations within the team.
So, if we have such clarity on the pitfalls of transformation programmes, why are failure rates getting worse rather than better as we digest these learnings? Isn’t it time to break out of the transformation mould and try something new?
Chapter 2 – Takeaways
- Over 70% of transformational programmes fail and the reasons for this are well documented
- My experience groups these reasons into two categories, people-related, and process-related
- So, if we have such clarity on the pitfalls of transformation programmes, why are failure rates getting worse versus better with learning? Perhaps we need to break out of the transformation mould and try a different approach?
Coming up in part 3, we outline how to build an agile organisation to survive in a never normal world.
At Shape Beyond, we see a completely different approach to success. We’ve experienced change programmes in entrepreneurial, phenomenally successful businesses. They navigate change with ease and turn uncertainty into opportunity to stay ahead of the curve.
Are you thinking about transforming your organisation or currently wrestling with a more traditional transformational programme? Get in touch for a chat on how we could support you.
Building an agile organisation to survive in a never normal world
The most successful agile businesses share some key ingredients. Their DNA fuels agility and delivers success in a fast-changing business environment.
Business transformation – is it not the silver bullet to company success?
Over 70% of transformations fail. So why do businesses continue to sign off transformation programmes? It’s time we break out of the transformation mould.