Stumbling blocks and obstacles test the strength of a company’s transformation skills. These situations call for plenty of perseverance, persistence, engagement, team spirit and focus on the goal. It soon becomes clear whether everyone involved is really on board with the putting the transformation into place. According to our survey, the number-one reason why transformation processes fail is a lack of understanding for the transformation on the part of employees. This happens whenever goals are unclear; communication is inadequate; and/or there aren't enough structures and role models in place. It is also a sign that there is too much concentration on management instead of leadership.
Transformation is always about lasting change. It requires for companies to modify their structures, processes, behaviors and habits. It often affects large numbers of employees at a time. Sometimes, leaders have no choice but to make complex decisions and act on them, even when faced with uncertainties. At the same time, day-to-day business must go on, even as new technologies and restructuring activities change the way things are done. It’s no wonder that this process presents so many stumbling blocks and obstacles to overcome. Especially during phases that require an extra investment of energy and time, it becomes clear whether the transformation is based on a firm foundation and backed by conviction and motivation. The CEOs we surveyed told us the main reasons why transformation processes fail, in their experience. These are listed in order of importance, as follows:
To eliminate these reasons for failure, we must first understand why they have such an impact on the change process in the first place, and how everyone can work proactively to prevent them. Many of the CEOs we interviewed told us about critical situations in which it became clear to them that the change would take longer than expected.
There were numerous factors that made this clear, such as internal resistance to change, a feeling of misunderstanding within the team, an increase in departures, and difficulties in adapting to new challenges and the changes in behavior and mentality that go along with them. As long as this resistance exists and there is a lack of understanding for the change, it is difficult to put the change into practice. It is like fighting against windmills. Transformation can only succeed if all or at least most of the people involved are prepared to adopt new skills and knowledge themselves, to proactively tackle challenges and not to always wait for a helping hand from above. Putting (transformational) knowledge into practice requires for everyone to want it. The main challenge here is that you cannot delegate “wanting.” It is up to everyone to decide for themselves what they would like to do. No matter how badly the leaders want the change to occur, their own colleagues and employees must want it for themselves. And the decision to want something is in the hands of each individual involved. However, it is possible to pave the way towards reaching that decision, and to put the necessary preconditions in place to improve everyone’s commitment. This is actually a decisive task for the leadership team, and it is crucial to success.
The psychological motivators that move us towards deciding that we want something are pain, pleasure and purpose. We justify our motivations in terms of (1) avoiding something unpleasant; (2) achieving something pleasant; or (3) contributing to something purposeful (Heckhausen & Heckhausen, 2018). Often, motivation that arises from pleasure (2) or purpose (3) has a longer-term focus than the motivation to purely avoid pain (1). This long-term motivation occurs when everyone involved has found their own clear answer to the questions “why?” and “for what purpose?” As Fabian Niedballa, Co-Founder and Managing Director of Sharpist says,
‘Normal’ means that every day is stressful, but that’s not negative. I haven’t become so big that I think that every day is a walk in the park. What’s important is that I find a place where the stress is worthwhile.
Co-Founder and Managing Director of Sharpist
It must be clear to everyone why their personal commitment and extra engagement and investment are worthwhile. Only then can we get started on the path to change and decide to put knowledge into practice. The goal must be communicated, and any lack of understanding among the team must be cleared up. That takes a strong, goal-oriented communication strategy that addresses each employee in a way that is personalized and relevant to their situation.
It’s no surprise that the top three stumbling blocks the CEOs in our survey mentioned relate to purpose, goals and internal communication. These aspects are intrinsically connected with one another and they are critical to the success of any transformation process. Without a clear view of the goal, the meaningfulness of the transformation remains vague and undefined. And without clear communication, employees will not grasp this goal or understand the purpose and benefit of the change (Johner, 2010). Ultimately, a clear “why” and “for what purpose” are the long-term motivators for employees and their engagement in the transformation process. Simona Scarpaleggia, CEO of IKEA Schweiz describes it this way:
You have to continuously repeat what is changing and show ease. As a leader you need to create a safe environment.
CEO IKEA Schweiz
Often, changes first result in a feeling of uncertainty, especially when they are imposed from the outside upon people who did not make the decision themselves. The structures that provide certainty then disappear. Conditions change. Methods and habits of the past no longer work. And there’s a higher risk of making mistakes or being unable to achieve a successful change process right away. To find the courage to put yourself in a situation like this and to fully invest in it, it is extremely helpful to have a positive vision of the target state. This provides an overarching, long-term purpose for each individual’s actions. Ideally, it is so attractive that it puts any fears or uncertainties into perspective.
Another difficulty that the CEOs often pointed out was in turning “wanting” into the ability to actually achieve. Even when there is a clear goal, they said, it often takes a long time for performance to reach the level of being able to achieve it. Sometimes, they also encountered a fallback into the comfort zone or a certain hesitance that prevented a faster implementation. It’s no surprise that people wish to return to their comfort zones during uncertain, tumultuous times. The path from wanting to being able to achieve change is associated with hard work and great personal investment. Knowing and wanting are on the first steps towards being able to achieve change. The intention (i.e. a decision based solely on will-power) to cultivate a new habit takes time and constant practice. One study on change of habits concluded that it takes 66 days on average to implement a new way of behaving to the point where it no longer requires great attentiveness and energy to perform it (Lally et al., 2009). What does this mean for the transformation process? It means that this stage of implementation is especially relevant and critical to the success of any change that you want to establish. This is because it demands a great investment, even though the reward, in the form of new, effective structures, digital processes or competitive products, is not yet in sight.
Without role models who consistently show what the transformation looks like and demonstrate their clear commitment to it, the success of the transformation process is at risk. Many of the CEOs also referred to the need for a positive culture of learning from mistakes. They perceived this as very important, especially during difficult times of the change process. Dealing openly with mistakes and using them as opportunities for learning and growing from experience helps eliminate fears and makes it easier to accept new challenges. To authentically implement this kind of culture, leaders must set the right example. Especially in challenging times, it generally takes a strong leadership team that is capable of giving employees within the company a focus based on the new vision, to lead by example with conviction and to convey trust. At times like these, it is clear that leadership is more than just day-to-day management of processes, people and resources.