The word “transformation” is fast becoming one of the most clichéd terms in the business world. It’s a word used to signal to a company that there’s an intent to make a change. Often predicated on a new executive hire or a poor performance year, it’s the war cry for “we have to do something different, and fast”. The next step is usually to call in your favorite premium consultancy and then sit back as they roll out the kit-bag of recommendations that inevitably never get completed or don't fit with the culture of the company. All strategy, no execution.
The problem is that change doesn't come solely from a strategy, a method, a process adjustment or change-management propaganda. Truly impactful and sustainable change comes from the passion of people at all levels. Passion for what they do and how they work. Passion for what your business does and stands for; passion to achieve the outcome to drive the business forward successfully.
Truly sustainable change comes from the passion of people.
What Gets in The Way?
Unfortunately, the anchor may just be your inability to get out of the way of passionate people trying to work effectively to achieve a better result.
So how do you clear the road for passion to take hold? The reality is, it isn’t easy—well, knowing what to do is—but actually doing it is not. Having an external “narrator” come in can help unpack the constraints that build up in an organization over time. Constraints that can often be difficult to see when you’re in the middle of it. This article is intended to offer a view into my personal experiences for enabling sustainable change.
Begin with understanding and aligning to the purpose: the reason customers come to you in the first place. For a banking customer, that reason might be to help customers succeed financially. Next, be directive in the outcomes needed to achieve this purpose. For example, don't ask your people to “sell more mortgages”, rather ask them to “put more people into a home”. Lastly, unleash the talent of your people to go and work out how to achieve the outcome.
Create an “exemplar” experience for staff that’s aligned to how you want to work in the future. In partnership with one of our clients, a major financial services firm, we discovered that when teams experienced a new way of working —rather than only being told the theory and expected to implement it—they were more likely to immerse in it.
There were two aspects to this. Firstly, we used a visual anchor which is a representation or illustration that communicates what good looks like for how we want to work. This anchor typically generates lots of conversation and interest amongst the team to allow you to start to explore what will work. Secondly, we assembled the exemplar working group, an end-to-end “slice” of the company, to operate in the new way. This group would be able to experience, contribute to and ultimately, advocate for the new way of working. This also gives you the opportunity to learn about constraints or accelerators in the new way of working.
Set up an environment that nurtures and supports scaling the new way of working. For many, this is a courageous step, as many of the things that create change actually challenge our beliefs about how we think things should happen (and is a whole topic unto itself). The main aspects of environment will include:
Measures: Change the current philosophy on measurement. New measures must promote working differently: work out the leading indicator that is most likely to demonstrate progress toward the outcome, and cascade it to the people who do the work. They can then make their own decisions based on what will move this indicator the most. Hint: it isn't revenue, profit or cost. Yes, changing measures at the enterprise level can be challenging, but it’s not impossible. An exemplar working group is just one way to help learn about the right measures.
Key Performance Indicators: KPI's must support achieving outcomes. Ensure the performance measures are reflective of what you are trying to do as a group versus individuals. Make sure they’re not adversarial or contradict outcome success. They should be tied to value being delivered to customers, that is, we should know if we gave customers the value they expected—rather than just meeting some internal achievement of completion. For example, customers want a home not a mortgage, they want to listen to music not buy an album: losing sight of customers when determining measures only leads to inwardly-focused decisions.
Organizational Structures: Structures must not determine the work. The worst enemy of change and culture is the obsession companies have with tightly defined roles and functions. Making decisions based on a job title is antiquated and illogical. People’s talents are not limited to their current role or past experience. Oftentimes, staff are viewed by their title and given work to match. Budgets are set by structures, work is delegated based on structures, and success is constrained by structures. A job title is irrelevant quite frankly; what is important, is how an individual can contribute to the team. Placing less emphasis on job titles and descriptions pushes people outside of rigid structures, and allows to unleash their talents to move the whole team forward.
Making decisions based on job title is antiquated and illogical.
Cycles: Financial cycles should not influence behavior and decisions. Of course, performance needs to be reported and it’s okay to have a cycle, but the annual panic that occurs each fiscal-year end is the cause of so much poor behavior—it needs to change. Start by creating visibility and transparency of the work so everyone knows exactly what’s important and decisions start to become obvious at all times and not personal. This way, by year end, it’s just a snapshot of the point in time and everything continues on as normal. Work patterns are more constant and more predictable. The biggest problems we see—incorrectly and illogically—ties performance measures, budgets and funding cycles together. This creates an adversarial, self-preservation mentality in middle management that makes it near impossible for change to happen.
Leaders need to function in the new way. Middle managers can get lost in how to lead a ground swell of people looking to change. Combined with the vision of leaders looking for change, they often get stuck in the middle trying to balance old expectations of functional responsibility with the new outcome based design. But all leaders need to recognize how critical their participation is in order to support sustained change.
Having a 'coalition of the willing', a combination of all levels of leaders from executive to luminaries and mentors who can create an echo through the company for change and the support to enable it, stops the change becoming the pipe dream of management or the realm of a 'change team'. Change belongs to everyone. The new leadership talents should include:
Being able to deal with ambiguity through transparency
Strong community builders who form great teams
Able to listen, steward, mentor and ask different questions. Not 'completion or budget' but 'learning and engagement'
Remove barriers, clear the path for pace and adaptability
Think co-creation and collaboration, not adversarial competition
Provide outcomes with a minimum set of constraints
Return problems unsolved
Change belongs to everyone.
Transformation isn't easy, it takes courageous leaders and a steely resolve to resist the traditional mindset of the industrial age that no longer applies in the knowledge economy. To stay the course make sure you don't get stuck in transition by cutting corners and convincing yourself it’s 'a step in the right direction'. Like technical debt, you will likely forget to go back and fix it. Avoid convincing yourself that bulk standardization will lead to simplification and make it easy. If you are only doing it for yourself and not the customer, you will likely make yourself harder to do business with.
STOP investing in monolithic platforms. Yes, platforms. Organizations seem to be replacing monolithic architectures with monolithic platforms, reducing the ability of teams to do the best thing for the customer.
NO EXEMPTIONS. You know what I mean, that overbearing leader that won’t get out of your hair so we won't exempt them from having to change like everyone else, saying things like 'this won’t work in infrastructure' or 'digital will do their own thing'. Transformation means everyone.
Get rid of budgets and job titles, work small, learn often, gather people around a clear outcome, measure success as something your customers get and watch what happens. Or at the very least, head in that direction!
Disclaimer: The statements and opinions expressed in this article are those of the author(s) and do not necessarily reflect the positions of Thoughtworks.