Making transformation stick

Stephen Moffitt

In November of last year, I had the opportunity to participate in a conversation sponsored by Io Associates on Making Change Stick. Since then, I have been reflecting on the processes that increase the chance that the change a business wants to implement actually succeeds. This article is an elaboration of my comments in the talk, based on nearly 30 years of research and practical experience in creating and implementing change strategies. In particular, I want to make a distinction between change and transformation and briefly lay out an adaptive process for making transformation stick.

Know what problem you are solving

First, let’s start with defining “change”, particularly as it relates to “transformation”. While these are often used interchangeably, they are actually focused on two very different situations and, as result, have very different goals, activities and success criteria. This is an important distinction because one of the biggest causes of failed change or transformation I have seen over the years is when leaders try to transform using the change process. 

While it is possible, it is less likely that businesses apply the transformation process to a change situation. Most businesses are not so well versed in transformation practices that they would implement these as their default mode.

Change versus transformation

For the purpose of this article, we can differentiate change from transformation in this way:

  • Change is a linear journey from one known state to another known state where the steps are predictable.
  • Transformation is an exploration of entirely new territory where the end state is not clear and the path is unknown.

Change is based, in large part, on predictability. If we know how to acquire customers and we are confident that by scaling our marketing budget and revamping our supply chain to be able to scale our production, we can grow our revenue per customer by a given percentage, then we can implement the necessary change projects to make that happen. If we do not reach the goal, we can trace the process back and identify where the issue is, fix it and be confident that we have improved our likelihood of reaching our goal.

Transformation, on the other hand, is an organised walk into the unknown. Transformation implies that the business is moving, metaphorically, from a caterpillar to a butterfly, which is an entirely different type of creature. This radical shift takes the business out of the known, out of its “comfort zone” and into uncharted territory. If we use the butterfly metaphor, the world that a butterfly inhabits is completely different from the world of the caterpillar. One is in the air, the other is on a physical object, such as a tree or the ground. What the caterpillar knew and had learned is of little use to the butterfly. It is similar for a company that is “going digital”. They are moving from a company that has technology to a technology company that does business. The speed, resources, economics and markets of a technology company are different from those of a traditional one. As a result, transformations require learning and experimentation. They also require businesses to be not only comfortable with uncertainty and with failure but to embrace them as necessary for success.

The adaptive transformation cycle

In a transformation situation, using the tools and processes of linear change will not work. The traditional change process requires predictability of results and clarity of the end state. Learning is focused on what prevented the business from making the necessary steps to reach that state and addressing them. 

Transformations are not predictable in that sense. The end-state is not clear. What exactly does a “digitally-enabled business” look like in the context of a specific organisation? It is not something that can be defined with certainty. The leadership team will have a vision of where they want to go and some idea of the products and customers that will be part of that new business, but there is no guarantee that the initial assumptions will pan out. 

In order to succeed in the creative act of transformation, the business must follow a process that is built around a different kind of learning: formulating hypotheses, testing them and refining them. In addition, the leadership team needs to give confidence to its employees, investors, customers and stakeholders that they have a clear vision of where they want to go and have the skills, tools and resources to get there.

One of the tools that can instil this confidence is the adaptive transformation cycle. It is an iterative process that should be repeated as often as needed for the business to reach its vision. The key steps are:

  • Vision: "What do we want to be?" This is the north star we use to guide our journey and our decisions
  • Listen: "What are the conditions we are in today?" This is understanding what the environment is capable of now: how willing to change is the business, where are blockers and what are the motivators. This is where leaders have to practice humility and accept they do not know everything nor can control everything.
  • Communicate: "Where are we going (vision) and what are the first steps (do)" This builds the confidence and emotion for change. Getting people on board with the process. It requires admitting we don't know all the steps but we have the confidence in our abilities to discover them together.
  • Do: "What step are we taking now?" This is a small (90 days or less) sprint to test out a hypothesis or 'move the dial' toward the vision.
  • Listen: "How did we do?" This is checking  the results of the doing to see what we achieved and what we have learned. This is essential for both improving and adapting.
  • Improve: "What are we doing better now?" This is the next sprint of doing based on the experience of the previous one(s). It starts at the beginning: refine the vision if needed, communicate the success of the last sprint and the plan for the next one based on the learnings from the previous one.

How to make transformations stick

In summary, transformations are different from change. They, therefore, require different approaches to reach success. While there are many reasons why a transformation can fail, a common reason is that businesses treat their transformations as if they were change programs. Taking an iterative, learning-based approach, like the adaptive transformation cycle above, can increase the probability that the business will buck the odds and turn itself into a “butterfly”.

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