Leading Companywide Transformations

Whether you are reducing costs, integrating a merger, doing a turnaround, or moving from good to great, transforming your organization is a significant challenge.  Having helped lead significant transformations in a variety of organizations, here are important tactics I've learned that will increase your likelihood of success.

1.  Set clear goals for the transformation.  This is the most important difference between being successful and somewhat successful, or even failure.  One client we worked with, a utility, was implementing SAP throughout the organization in order to have an integrated IT platform, but also, and more importantly, to make process improvements throughout the organization.  The distinction was important.  

I talked to one CEO who wanted to go "from good to great."  Fair enough as an aspiration, but what specifically will be different when that is accomplished?  His top team had all read the book, but none of them really understood what he wanted to accomplish, and he wasn't willing to be more specific.  

2.  Establish strong sponsorship of the change.  The organization leaders must be visible, strongly involved, and supportive - both publicly and privately.  One of the first issues we look at is the level of sponsorship among the top team.  

In one client company, employees were told that the transformation effort should take a lower priority to departmental projects.  It didn't make sense to the employees, and it would have created significant problems for the transformation. More than once I've had to tell the top executives of a company that unless they were willing to demonstrate strong sponsorship behaviors, they should prepare to fail.

Sponsor skills are very important - don't think that a significant change program can simply be delegated to lower levels.

3.  Involve the entire company in the process.  If you involve people, the change becomes something that they are doing, rather than something that is being done to them.  

Another client, a consumer goods manufacturing company needed to increase quality, reduce costs, and improve processes in order to compete against increasingly tough overseas competition.  They formed dozens of cross-functional teams to learn process improvement, develop measures, and make recommended changes throughout the organization.  The involvement created strong momentum so that eventually even the most cynical employees came around to support the effort.  The result led to company recognition as a quality standout and being named a Wal~Mart vendor of the year.

Engaging front line workers in the change is very important - they must feel ownership of the change.  Companies that fail will often point to this, or weak sponsorship, as the key thing they would do differently if they had it to do over again.

4.  Provide effective and regular communications.  Don't assume a monthly update will keep people interested and feeling informed.  Weekly communications, especially as you get into the heart of the project when employees will be widely involved is crucial.  Typically, employees will be involved in a small part of the transformation, but won't be able to see the whole picture without communication.  When I was helping to lead Adelphia through its bankruptcy, I traveled throughout the country to talk to employees about the overall situation - they already knew what was happening at their local system.