6 Key Drivers of Organizational Transformation Success (2023)

There was a time when disruption was an extraordinary event that hit only an unlucky few companies—think Kodak, Polaroid, and Blackberry. But in today's complex and dynamic world, with challenges ranging from climate change to digital, from geopolitics to DEI, organizations must view transformation as a core capability to be mastered, not a one-time event.

At the same time, leaders must recognize that transformation comes with risks. In 1995, John Kotter discovered this70% of organizational transformations fail, nearly 30 years later, not much has changed. In our own research, we talked to more than 900 C-level executives and more than 1,100 employees who experienced organizational transformation and found similar results: 67% of executives said they had experienced at least the last 5 years of performance poor transformation.

A 70% failure rate equates to a significant loss of value when you consider that companies will spend billions of dollars on transformation initiatives in the coming year. So what can leaders do to improve the odds of success in their favor? To find out, we interviewed 30 transformational leaders and surveyed more than 2,000 leaders and employees in 23 countries and 16 industries. Half of the respondents were involved in a successful transformation, while the other half experienced an unsuccessful transformation.

So, what strategies are successful transformational leaders employing to navigate the emotional journey? To find out, we built a model that predicts the likelihood an organization will achieve a transformation KPI based on the extent to which it exhibits 50 behaviors across 11 transformation domains. The model found that behavior in six of these domains consistently improves the chances of transformational success. Organizations that perform above average in these areas have a 73% chance of meeting or exceeding their Transformation KPIs, compared with only a 28% chance of below average performers. Our research shows that any organization that can effectively execute these six levers maximizes its chances of success.

Our research also found that this is a key differentiator for successful transformationThe Emotional Journey of Leaders Embracing Employees. 52% of respondents who participated in successful transitions said their organization "substantially" provided them with the emotional support they needed during the transformation process (compared to One proportion is 27%).

Transformation on a personal level has been extremely difficult for everyone involved. In the success stories we reviewed, leaders not only ensured that their teams had the processes, resources, and technology they needed, but also created the right emotional conditions. These leaders provide a compelling case for transition and ensure employees have the emotional support they need to perform their jobs. This means that when things inevitably get tough, employees feel appropriately challenged and ultimately gain strength from the stress.

In contrast, leaders who failed to transform did not make the same emotional investment. As their teams faced inevitable challenges, negativity mounted and the team fell into a vicious cycle. Management loses confidence and tries to distance itself from the project, prompting employees to do the same.

Six key drivers of transformation

So, what strategies are successful transformational leaders employing to navigate the emotional journey? Our research found that the six levers that maximize your chances of success are:

1.Management's willingness to change

Many people think that the job of a leader is to look out and provide guidance to others. However, our research shows that to help their people navigate transformation, leaders must first look inward and examine their own relationships to effect change. "If you're not ready to change yourself, forget about changing your team and your organization," says Dr. Patrick Liew, CEO of GEX Ventures;

In our interviews, leaders talked about their own growth, including becoming more comfortable with their emotions and becoming familiar with the discomfort that comes with personal growth. As one told us, leaders need to "look in the mirror" and realize that they are part of the problem before they can move on to positive development. They must overcome their fears before they can help employees navigate this change.

“As someone charged with leading this [transition], honestly, I was worried at first because I think most of us are inherently curious about where we are going,” one chief operating officer in the automotive industry told us. . A senior vice president in the global business services industry described the need to be more vulnerable and honest on the journey of self-discovery: "I think I've become more aware of who I am."

2. Shared vision of success

Building a unified vision for future success is another important cornerstone of transformation. In our research, 50% of respondents who participated in successful transformations said their vision strongly moved them and motivated them to go further (compared to 29% said so).

Workers must understand the urgent need to disrupt the status quo. A compelling "why" can help them navigate the inevitable challenges of transformation initiatives. Many employees who participated in our survey said they "want" and "need" to communicate their vision clearly. When a leader has a clear vision, employees are more likely to follow it. But it's hard to be successful if people don't understand the vision or the need for transformation.

"I'm not trying to tell people, 'This is going to happen,'" one medical device industry executive told us. "It's about creating a shared sense of ownership...and then [directing] my team to do the work that they need to get done. We really want our team to really engage in the way we want to work collectively. "

3.A Culture of Trust and Psychological Safety

Trusting and caring leaders can make difficult transitions more emotionally manageable. At the most basic human level, we all know what it's like to be seen, heard and heard by others. It validates our efforts, motivates us to work harder, and helps ease emotions like doubt, fear, anger, and sadness. Employees in our study said they wanted leaders who were patient and, in the words of one employee, “quiet and teachable minds.”

in a high standard workplacepsychological safetyEmployees have the confidence to express their honest opinions and concerns without fear of reprisal. In the absence of trust and psychological safety, it can be difficult to motivate your employees to make necessary changes. For example, one executive told us that people in her company were too scared of transition to feel like they could talk about the problems they saw. Unsurprisingly, the transition has not been smooth.

4. Balance the process of execution and exploration

Transformation naturally requires disciplined project management to move the project forward. However, our research shows that successful transformational leaders have created processes that balance the demands of execution while ensuring that employees are free to explore, express their creativity, and generate new ideas. This enables employees to identify solutions or opportunities that will best serve the long-term goals of transformation.

“Innovation requires the right people and processes,” said one of our anonymous survey respondents. "Both are critical to fostering collaboration and experimentation."

We also found that allowing room for small mistakes can ultimately lead to big successes, while fear of failure can lead to missed opportunities. Forty-eight percent of respondents who participated in a successful transformation said the process was designed to ensure that failed experiments did not have a material negative impact on their career or compensation. In contrast, only 29 percent of transformation failure respondents said the same thing.

5. Realize technology brings its own emotional journey

Leaders in our study ranked technology as the number one challenge they face in their transformation efforts. When introducing a new system or technology, there are many emotions to manage, from worries about how it will work to worries that it will mean job losses or a system slowdown.

For the low-performing transformations we observed, we saw a shift in narrative from vision to focus on the technology itself. In successful transformations, by contrast, leaders ensure that technology is viewed as a means to achieve the strategic vision. Additionally, they value the rapid implementation of new technologies and focus on the least viable products rather than the perfect fit. Finally, they invest resources in skills development to ensure employees are ready to use new technologies to create value.

“We had a kickoff meeting with our executives to get them involved in the process early on,” explained a media/ad agency VP. "The purpose of these meetings is to show them that what's being built is something they've helped shape, not something that's been presented to them as a fait accompli ... which minimizes the number of active critics."

6. A sense of belonging for sharing results

In the successful transformations we studied, leaders and employees worked together to create an environment in which everyone shared a sense of ownership of the transformation vision and outcomes.

A prime example is the rapid shift to virtual and remote work at many companies during the pandemic. Because of the speed and urgency of change, leaders must work closely with employees to create new ways of working and be more responsive to their perceptions of what is working well and what is not. This large-scale collaboration helps create a sense of pride and shared responsibility between leadership and employees.

“Things emerge in transformation,” Christiane Wijsen, Head of Corporate Strategy at Boehringer Ingelheim, told us. "If you have traffic around you, the promoters are going to tweak and tweak it every time. If you don't have that movement, you're alone."

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Finally, it must be emphasized again that all transitions are difficult. Even with successful projects, people have stressful moments. The trick during these difficult times is to motivate your employees and turn increased stress into something productive, rather than turning change into pessimism and underperformance.

In our research, we found that leaders who actually work with their people are far more successful. They identify and manage emotions instead of pushing them aside or ignoring them. The best leaders establish a vision throughout the organization and create a safe environment to collaborate and listen to each other.

“You have to have very, very respect for the people you work with,” Thomas Sebastian, CEO of DXC Technology’s London-market joint venture, told us. "You have to understand the emotional side and look at it from a completely different perspective, like how this transition is going to make their lives easier."

Success breeds success. Once the workforce has successfully transformed, it can be transformed again. With the pace of change in the world, businesses must be ready to start over.