I have lost count of the number of senior executives I’ve met who simply don’t accept the commonly-quoted 70-80% transformation failure rate. Even if they do, they often treat this as an excuse not to transform.
Some still cling to the belief that transformation is optional. However, it’s not just me that’s pushing them to do something. In fact the message is frighteningly consistent across pretty well all notable experts.
The experts agree
The vast amount of work that McKinsey have done in this area explains why they are considered a leading authority. Deloitte also conducted a review of transformations in Australia, which represents a fair proxy for most Western markets. There simply isn’t any doubt. Every business has to transform and right now, as time is running out for those who haven’t brought their transformation over the line, their efforts are failing in more than 70% of cases. This is very real and extremely serious.
Understanding the scope of transformation
To make things worse, there’s also a general failure to understand the scope of a typical transformation project. This isn’t about adding technology to your existing structure, transformation is about re-inventing your business from scratch, with a new purpose, new structures and practices and often completely different products or services.
It takes years for most businesses even to get to the starting line, it costs loads of money and it can be very painful, but every business HAS to do it, so you should stop procrastinating and get on with it while you still have time, because one thing IS for sure … time is running out.
Yes, I know, it’s scary. The high failure rate means the chances of your business still being around five years from now aren’t great anyway, but if you don’t face the challenge and transform they are zero! On the flip-side, though, the future for your organisation could be pretty rosy, if you tackle the challenge the right way.
There’s no doubt among experts regarding the incidence of failure and there are almost as many reasons for failure as there have been failed projects. We should be taking note too, because every business I have ever encountered has many of the threats bound into their culture, structure and practices.
In 2015 McKinsey published their view on the state of transformation failure which still holds good today. No … we haven’t learned much on the past four years!
Pin-pointing the reasons for transformation failure
McKinsey’s objective was to isolate the most critical failure points. They weren’t the first to try this and they haven’t been the last, but they started with 24 commonly-quoted reasons for failure among which they highlighted communications as the most critical. That’s communication of all kinds in all areas of the business. While McKinsey list their 24 reasons saying “all are not equal” I’d go further by suggesting that all their quoted factors are actually second-level. I’ve done this exercise myself, before I was aware of McKinsey’s initiative and determined the primary reason for failure – which is reinforced by McKinsey – is absence of focus. This is why communications are so important.
We need a simple transformation solution
Throughout McKinsey’s report and the analyses of others the need to get all stakeholders of one mind continually re-emerges, but while the instinct is to treat each example of communications failure individually, it’s my belief that the whole thing could be far simpler if tackled at it’s root.
Simple means efficient and as well all know, efficiency is what defines success and failure in the digital economy. In fact, it could be argued handling this any other way isn’t going to fix the problem, because different examples of communication failure will keep emerging.
Meanwhile, in a recent article Bernie Gracy offers us “Ten steps to leading successful culture change’. I have a fundamental issue with Bernie’s position insomuch as he is thinking of transformation as an IT project, which it isn’t – but that’s maybe because he’s a tech guy. However, on the subject of gaining the commitment of stakeholders in the cause for change, his premise is sound. His “ten steps” like McKinsey’s reasons for failure are all correct, but second tier.
Again, there’s a far more fundamental factor in play here. Bernie talks of “culture” which, in part, is correct, but even this isn’t the core of the matter. Culture is a component of brand and, as such, is represented in a number of the coordinates of my Full Effect Brand Model.
Switching your attention to “brand”
It’s brand that establishes consensus. This is so because every brand has a “promise” at its core and that promise becomes the focus of the entire brand community. Brands are communities of people with shared values and beliefs and, in this context, a shared objective.
Transformations fail fundamentally because of an absence of focus. Yes communications are essential to addressing this and culture is a brand component, but unless the organisation has the focus that only a brand can provide all the other “reasons for transformation failure” will continue emerge.
So, what can you do about it?
If what’s needed to successfully transform is the focus that only brand can provide, it makes sense to start with that.
Every organisation, regardless of whether they have purposefully created it or even pay it any attention, has a brand. If you don’t manage yours you are ignoring the greatest asset any business can have in the digital economy. Worse still, by abandoning your brand you will dissolve into a state of inefficiency that is impossible to sustain, with third parties left to interpret your words and actions and thereby defining it for you. Not a good situation!
Defining your brand is essential. It takes time and understanding. It’s definitely not something you tackle over coffee or even resolve during an away day – although such get-togethers can be useful as part of the process.
I’ve devised a simple tool I call a “Brand Model” that I introduce my clients to. This uses twelve co-ordinates to define the brand, each of which are arrived at through workshops, internal and external research and a lot of conversation.
Defining your brand
The process of modelling itself is a big step forward for most businesses. It can reveal the lack of cohesion that exists in many businesses, highlight how out-of-step a business is with today’s marketplace and demonstrate how poor communications, in many cases, are preventing success.
Most of all Brand Modelling aligns the thinking of those who participate. They emerge from the process with a clearer and, more importantly, consistent understanding of what the business is really all about. The next stage is to extend that understanding to all your other stakeholders. That’s where I launch into the remaining parts of my Brand-Led Business Transformation programme.
Every business has to transform, but if your transformation isn’t already underway you might at least buy yourself some time and you’ll certainly facilitate performance improvement if you start managing your brand correctly. It doesn’t take up loads of resource or require the investment of transformation and you could see improvement in a matter of months if you know what you are doing. If you are still unsure, I’m happy to help.
July 16, 2019