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Change management and organizational transformation

News
Governance et Management
Organizational Transformation
October 10, 2019

A short exercise in basic semantics to help you make an informed choice

A short exercise in basic semantics to help you make an informed choiceIn 1995, John P. Kotter published an article in the Harvard Business Review that was to become a source of inspiration for an entire generation of managers and consultants: Leading Change: Why Transformation Efforts Fail. In 1996, his book Leading Change, which describes how to transform a business in 8 steps, became an international bestseller.

More than 20 years later, despite the efforts and investments organizations have made in change management, 70% of change programs (still) fail to meet their objectives.

There are a number of reasons why Kotter’s change model doesn’t work. Here are a few:

Another reason for the model’s poor performance may be that stakeholders (senior management, managers, employees and consultants) confuse “change” with “transformation.”

Despite what managers may say around the water cooler, most organizations manage change well, although there’s always room for improvement. As the Business Development Bank of Canada points out, “whether you are changing how you manage your inventory, implementing an enterprise resource planning system or launching a product, your business is always in “project management mode.””

If an organization consistently applies standard principles and management tools, such as using a business case, planning the project stages, defining deliverables and performance indicators and tracking the budget and deadlines, implementation of the change will generally produce the desired results.

This is because “change management” requires implementing well-defined initiatives with a clearly determined scope. Although a change can (but doesn’t have to) affect how the organization operates, the idea is not to question its business model or strategic orientations.

Implementing an enterprise solution, such as an enterprise resource planning (ERP) system to optimize a supply chain, doesn’t mean that your organization is changing its core mission to market a new product or service. The change is aimed at improving the execution of specific tasks through tighter cost control and improved performance. This exercise is no picnic, but it works, and the ERP market is faring very well. This is clearly demonstrated by the skyrocketing sales and near-total adoption of cloud-based software-as-a-service (SaaS) solutions.

A “transformation” program is another thing entirely.

  • As its name indicates, an “organizational transformation” involves the entire organization.
  • Firmly established, interdependent and interconnected departments, business functions, individuals, processes, approaches and habits all come into play.
  • The goal of a transformation is to redefine the organization and its business model based on a renewed mission and vision in response to market developments: “Yesterday’s home runs don’t win today’s games.” (Babe Ruth)
  • A transformation is much less predictable than a change.
  • Its implementation is iterative, not sequential.
  • The trial-and-error method must guide initiatives, as a transformation is a creative process of discovery and experimentation during its execution.
  • A transformation has more risk factors than a change.
  • Its conditions for success are more difficult to bring together and orchestrate.
  • A transformation may fail.

Too many organizations embark on risky transformation projects when a well-organized change management program would adequately meet their needs. Conversely, too many organizations imagine that an organizational transformation project can occur simply through the adoption of new technology. In reality, missed deadlines, a poorly defined project scope, insufficient resources and badly orchestrated leadership are responsible for the failure of most programs, whether they entail a “change” or a “transformation.”

A fair amount of astuteness, experience and pragmatism are necessary to determine the type of program and game plan that are best suited to the results you’re looking for. Talk to one of our experts about it! They have experience in the area and can help you safeguard your organization against a living nightmare.

Please don't hesitate to contact us for additional information.