What could stop your transformation?
These days, more companies are asking fundamental questions, such as ”How much longer can I stick to my legacy business and expect to create value? What will my company’s role be in the future (let’s say after 5-10 years), considering the rapid technology development and other major trends? Do I have to transform?”
As a result of these fundamental discussions, many companies have indeed launched their transformation journeys – some of them successfully (if you want to read about successful transformations, you will find this article interesting: https://hbr.org/2019/09/the-top-20-business-transformations-of-the-last-decade).
Of course, not all transformations are success stories. In fact, transformational failures are common. Even if you come up with a great transformational idea, you still have a long way to go. Many issues have no easy answers – yet have to be addressed even before you begin: How do I engage my organization in this transformation? How do I get current employees to go outside of their comfort zone and learn new things? Or do I have to replace a lot of people?
In a recent case we helped Finnish finance sector company revise its strategy and plan an implementation. The new strategy called for a major change in the company’s business logic and core processes, which would force current employees to learn new ways of working. The changes were substantial enough that senior executives anticipated that major cultural and mindset changes would be required. To better prepare for the transformation ahead, the management asked us to assess the organization’s current state and readiness for change. We applied our proven intellectual tools (grounded theory analysis, an advanced method used in top-tier management research, which we have discussed in previous blogs (https://august.fi/voice/what-truly-drives-organizational-behavior-and-decision-making/), and in-depth interviews, which we conducted with ~20 top and middle managers.
Through the interviews, we identified several psychological dynamics in the organization that had undermined performance in the past and threatened to impair the new strategy from the start. For example, some of the organizational groups felt threatened and intimidated by newly established organizational units; they were therefore reluctant to collaborate with them, even though that was critical for the new strategy. Fortunately, we also identified latent strengths and sources of meaning in the group which could be leveraged in the new strategy. All the positive qualities we identified enabled people to perform better and gave the company a cultural core to build on. Findings from the deep interviews were used for fine-tuning the strategy communication and for planning the implementation phase. The transformation plan was built on the organization’s strengths where possible, and avoiding the potential pitfalls we identified initially. You can read the case description here: https://august.fi/our-services/putting-focus-on-the-soft-stuff-in-strategy-implementation/.
It’s a mistake to think that strategy is only about your business model. As important as that obviously is, adding a touch of psychology to the strategy design phase can add a lot of value. After all, plans don’t deliver the results, people do.
Tomi Ere, Partner +358 40 823 3848 firstname.lastname@example.org Timo Vuori, Executive Advisor +358 50 441 9072 email@example.com Jani Ariluoto, Director +358 40 745 4920 firstname.lastname@example.org