In the previous post, we reviewed how the lack of decisiveness and conviction from leadership are typical causes of failure in transformation processes. In this post, we will examine how clarity and a sense of direction (focus) can influence the success of these processes…
Understanding Value and Customers:
“What is value? During a trip to a remote rural town with a very hot and humid climate, I finally found a store that sold me a bottle of water. When I asked for the price, the shopkeeper looked at me, judged me by my clothes and my obvious desperation from thirst, and told me it cost $15. After many years of books, classes, lectures, and advanced presentations on management at the world’s top think tanks, failing to understand it, I finally learned what value is: what the customer is willing to pay for.”
Sometimes, transformations fail from the start because organizations are taken over by ideas that seem logical or attractive. In these situations, where transformation is urgently needed, it is easy to mistake the cause for the solution, treating them as related elements when they are actually not.
A transformation that generates impact primarily focuses on understanding what is valued by current and potential customers. Secondarily, it considers how to offer what customers value at a product or service production cost that allows more consumers to prefer it and/or makes it difficult for competitors to imitate it.
When the focus of transformation is solely on costs, the process often risks eliminating or eroding attributes valued by customers, affecting their preference and, consequently, the organization’s ability to generate revenue.
Overextended Scope That Creates Confusion:
The change process should begin with an analysis of where the greatest gaps and opportunities lie, rather than an exhaustive or overly complex analysis of where “all” opportunities exist. This initial step requires careful selection; otherwise, complexity creates confusion and, in many cases, disbelief.
Complex, exhaustive, and simultaneous projects hinder teams from progressing, understanding the cause-effect relationships of their actions, learning, and moving forward. As a result, they end up drowning opportunities in confusion and lack of commitment.
Lack of Focus:
Sometimes, when leaders face the option of change, which requires making choices, they decide to “choose everything.” For example, they might attempt to “focus on improving all underperforming businesses at the same time” within the transformation process. This is one of the biggest fallacies of transformation processes—choosing everything gives the leader the illusion of making a decision when, in reality, they have not.
The fear of “losing revenue” from a unit that does not contribute to the company’s results—because the new options may not be able to replace revenue generation—can reduce the company’s size and asset base. When a leader decides to “choose everything,” the team understands that nothing has actually been chosen, and as a result, no real change will happen (or at least not a guided and measurable one).
When an organization has defined the need for change, sometimes what is missing is a narrative that articulates the sense and direction of that change. No, don’t imagine something complex, exotic, or overly elaborate—simple is good, clear and reasonable is better.
Communication Process:
A change process must also consider managing the risks faced by different people, teams, departments, and ultimately, the entire organization. When the leader and their team have defined the need for change and the objective but fail to develop “downward” communication processes to convey these ideas, anxiety and fear often paralyze transformation progress.
Without a clear guide on why and for what purpose the change is happening, or a reflection on the risks that each “part” perceives, the change process becomes less successful. Sometimes, simply having teams meet with their leaders—who explain the why and for what purpose, and create spaces to hear doubts, risks, ideas, and fears—generates insights that improve the impact and activate necessary work streams to ensure transformation success.
What begins as a process to express these fears and anxieties often becomes a key moment of empowerment for teams and a shift in organizational inertia, allowing progress in the transformation process.
For some leaders, opening these spaces may seem like it could create misalignment, confusion, or even questioning of the need for transformation, leading them to limit communication. In some cases, the main issue is that communication is simply not seen as necessary, and leaders remain unaware of its importance.