When even McKinsey admits that most organizations fail to deliver significant value enhancement from their transformations, and yet most businesses today speak of their transformation need and activity, the question many of the leaders we coach ask themselves is: Is the benefit of transformation worth the effort?
It’s crucial to differentiate between performance optimization and transformation. Performance optimization is about doing things better: the incremental improvements, the efficiency gains, the level of productivity exhibited by employees, teams, departments, or the organization as a whole in achieving its goals and objectives. While important, it doesn’t fundamentally change the nature of a business. Transformation, on the other hand, is about doing things differently. It involves a fundamental shift in the organization’s identity, culture, and strategic direction. Transformation often involves a complete overhaul of the organization’s business model, structure, and processes, as well as its values, beliefs, and behaviors. It’s about becoming something entirely new.
The question many of the leaders we coach ask themselves is: Is our business strategy designed to achieve performance enhancement or does it also include truly transformational initiatives which ensure we are future relevant?
The business world is obsessed with speed and efficiency. From agile methodologies to digital transformation, from quarterly earnings to product launches, the emphasis is on rapid results. Companies are under constant pressure to innovate faster and disrupt more aggressively. But as many organizations have discovered, true transformation is about slowing down in order to ramp up later. It’s a marathon, not a sprint.
It takes time to change culture, build new capabilities, and create new markets. Traditional performance metrics are often inadequate for measuring progress. New metrics are needed, such as customer satisfaction, employee engagement, and innovation output. And even these will only measure progress rather than success!
André – Executive Board Member, Global Asset Management Firm, leading their transformation says “Achieving and celebrating the wins from performance optimization, creates the belief and energy to transform – this applies to all stakeholders: shareholders, customers, business partners and employees. Everyone wants to know and feel they are contributing to future relevance”
Future Readiness: The True North Star
Let’s be provocative here: contrary from what academic research and/or your strategy consultants tell you, a grand vision isn’t always necessary to start a transformation. Often, it emerges from the process itself. Transformation is about experimentation, learning, and adaptation. It’s about asking yourself what is your right to play for the next phase in your company’s life and finding your way in the dark, one step at a time.
The true test of a successful transformation is future readiness. It’s about building an organization that can thrive in an uncertain, rapidly changing world. This requires a deep understanding of emerging trends, a culture of experimentation, autonomy and creativity, and a relentless focus on talent development.
While there’s a temptation to chase the next big thing, sustainable success comes from building a foundation that can adapt to whatever the future holds. Creating an organization that is agile, resilient, and customer-centric.
Foresight and tactical adaptability are the magic capabilities that are needed to succeed for the future – while curiosity, courage and willingness to take risks are the attitudes that fuel transformations. Recent research describes curiosity as the only competitive advantage global companies can facilitate and foster to outperform their peers.
Adne – Strategy & Transformation Director, FMCG Northern Europe says: “Transformation is required as external landscape and customer/consumer needs are evolving in a fast and faster pace; however, performance optimization is the foundation for fueling investments and capacity into transformation. Organizations needs dedicated resources to think strategically and challenge status quo, as most of the organization naturally evolves around operations and short-term goals. Solid feedback loops from the frontline of the company will provide executives with the underlaying issues to solve, and hence the priority areas of transformation.”
Often the leaders we coach ask themselves whether they have what it takes to truly transform their business.
The Leader as Transformer: a demanding personal journey
The commitment and enthusiasm for transformation starts at the top. Leaders must be willing to undergo their own personal transformation before they can lead others. This requires a deep alignment of body, heart, and mind. Physically, it means having the energy and stamina to sustain the long journey. Emotionally, it means developing empathy, resilience, and courage. Mentally, it means cultivating a growth mindset, embracing uncertainty, and challenging the status quo. The most important aspect however, is to be comfortable with ‘the not-knowing’. This is contrary to how leaders are taught to behave. Only in contact with ‘not knowing’ can curiosity be one’s main compass, and can new ideas, thoughts and wonder materialize. Leaders need to accept the moments of chaos and fertile void.
Leaders who can deliver both performance optimization while transforming their business for future relevance, do it through:
1. Embracing ambiguity, insecurity and uncertainty (Entrepreneurial Thinking).
2. Connecting through vulnerability.
3. Exposing the systemic undercurrents in the organisation.
4. Fostering latent potential in the organisation, which is waiting to emerge.
5. Facilitating collaboration and co-creation, drawing on diversity and inclusion, by serving instead of being served.
6. Embracing provocative, out of the box ideas, opinions and feedback.
7. Delegating – empower performance and drive for critical KPI’s by trusting the team.
8. Appreciating and acknowledging effort, courage and results in equal ways.
9. Be sufficiently independent from opinions of others to make unpopular decisions or try the road less taken, whilst staying connected.
10. Building trusting relationships with all critical stakeholders whilst embracing diversity of thought.
Crucially, these leaders also foster a culture of psychological safety. This is a culture which allows people to take interpersonal risks. A culture which will not punish nor humiliate people for speaking up with ideas, questions, concerns, or mistakes. When people feel safe to share their thoughts and perspectives, innovation thrives.
Tony – FMCG European Head, leading their transformation says: “As a senior business leader I strongly believe it is important to continue to grow, evolve and develop personally/ professionally to enable a business to transform. Two components have unlocked this and in turn had a significant, positive impact on the transformation of our business are 1. To uncover and unlock my personal drivers for success and 2. Identify and overcome what is getting in the way – in our case this was “letting go of knowing” whilst maintaining the deep conviction of doing what is right for the entire enterprise to succeed.”
If leaders find themselves on a transformation journey, and really want to embody it, they frequently ask us how they can engage the organization.
Heavy Lifting is easier if shared on many shoulders
Transformation is a team sport. Everyone in the organization must be invested in the process. This requires open communication, employee empowerment, and a culture of collaboration.
Leaders create a sense of shared ownership and purpose. However, only by engaging employees at all levels, can organizations harness the collective intelligence of their workforce and increase the chances of success. It’s about creating a sense of shared destiny.
And yet, not everyone in the organization will be involved. It may require different types of people than those you had in the past. Leaders need to excel at picking and developing the right talents to lead the transformational initiatives. Belief, credibility, adaptability, resilience and tenacity are needed for the long journey as well as the insights that come from looking beyond the confines of one´s own company. Not everyone will have these skills. It is an art to identify the right people and empower them to succeed.
The question the leaders we coach may ask themselves is: what’s in it for me?
Experience personal growth during the journey
By viewing transformation as a journey of discovery of yourself and the people you lead, by actively seeking the uncharted path towards the unknown, embracing and connecting with the manifold ideas and viewpoints from a diverse set of stakeholders, enjoying the lessons learnt from success and failure, sharing your own concerns and apprehensions in a safe space to express them, knowing your peers and teams are as committed, engaged and vested in the company’s future and, by inference, in you personally – you will feel less transformation tired and more turbo charged to move forward.
You will feed your curiosity, build new capabilities and feel confident that your contribution will have left a legacy for the future of your company.
As Nicola – a seasoned transformation CEO in the fintech world says: “Transforming a business is one of the toughest yet most rewarding endeavours I have ever experienced. It risks becoming all-consuming, so maintaining a degree of elevation and distance is essential for your own mental health, as well as for staying the course. As a CEO, this role can be rather lonely, as you are being looked at for direction and results from all stakeholders, all the time. However, providing a new sense of purpose, clarity, dynamic and goals to a business and seeing a team successfully execute, is one of the most amazing professional experiences you can go through, a bit like raising a teenager, you sometimes think you will not survive it, but once they start “adulting”, the sense of pride and relief is well worth it.”
Tiphaine GOISBEAULT, Executive Coach
Vanessa COX, Partner & Executive Coach
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