It is very likely that a CEO will be confronted with a transformation at least once in their career. It is not a question of whether this challenge will arise, but of when. How can a CEO prepare for that? Which lessons can less experienced CEOs learn from veteran transformation leaders?
There are three elements that the top managers we surveyed all considered absolutely vital to mastering a transformation process:
These aspects are ranked far ahead of business-oriented topics like strategy development (5%), project management (4%) or examining one’s own business model (2%). In times of uncertainty and change, inner orientation and energy among employees is particularly crucial for the company’s further development. Shared company values (11%), which ranked number-four on the list, allow for important guiding guardrails to be put in place (along with the company vision), which offer stability as well as a certain amount of predictability. Other relevant aspects mentioned in the survey were personal responsibility of all involved (8%) and strategy implementation (8%). Some less important factors were an internal feedback culture (4%), relationship building (4%), team development (4%) and self-discovery (3%). The final items on the list were diversity (2%) and intercultural competencies (1%). In general, it is not technically plannable and quantifiable topics (21%) that primarily decide whether a transformation succeeds or not, but much more the interpersonal and visionary factors (79%) which are far less tangible and more difficult to specifically measure.
As such, it may be surprising that relationship building ranked so low on the list. This can possibly be explained by the tendency to (mistakenly) de-link communication from relationship building. People often labor under the illusion that successful communication particularly depends on intelligent content. This overlooks the crucially important effect of trust-based relationships. If there is a lack of trust, then even the most precise and effective argument can still fall on deaf ears or be accepted only with hesitation. Communication is always a social process. Its effectiveness reflects the quality of the trust that exists between the people involved. The same applies (particularly) for transformation processes, during which great uncertainty and possible mistrust exist within the system. “What is said” is only accepted when the “who said it” and “how was it said” are accepted. As Theodore Roosevelt so succinctly put it: “People don’t care how much you know, until they know how much you care.”
Other relevant aspects mentioned in the open comments included reflections and peer reviews, as well as awareness of the problem in the first place and openness to engage with the topic of change. Transformation is not the same thing as polishing the company’s image. It is a profound opportunity that gets to the substance and essence of the company. Looking regularly in the mirror is indispensable, not only for the company’s upper ranks. Ultimately, it takes genuine commitment, which carries everyone involved past their doubts, resistances and the “valley of tears.” The transformation must be heartfelt.
How did the CEOs we surveyed acquire their competencies in the field of transformation? More than one quarter of those we asked agreed that their own experiences with transformation projects (29%) and exchanging experiences with colleagues (27%) are the most meaningful. These were followed by seeking external consultancy (15%) and personal coaching (12%) during the process. At the bottom of the list, the CEOs ranked professional support through training activities (10%), mentoring (5%) and specific external training activities (2%). Notably, an open-ended exchange and personal guidance for top management during the process are considered far more meaningful than the amount of knowledge available or the technical expertise.
Which lessons have the CEOs taken away from their experience with transformation processes in the past? By far, their most important insights were:
Both of these takeaways once again emphasize the relevance of stable relationships. Successful transformation depends largely on the quality of teamwork and trust-based relationships. This ambitious undertaking can only succeed when everyone involved holds together and stands up for one another during times of business-related uncertainties. Michael Rohner, CEO of Apleona HSG AG put it this way:
You must offer people a home. That means investing in their workplaces and in the culture.
CEO Apleona HSG AG
Other insights that the surveyed CEOs considered highly relevant in retrospective were a focused, appealing image of the goal (22 mentions), the underestimated length of the process due to the slow pace of the system (17 mentions) as well as the strong impact of the role model function (“walking the walk”) and the unconditional, unshakable unity of the upper levels of management (17 mentions). These were followed closely by courage and persistence during the implementation, especially when faced with resistance (15 mentions). The final items on the list of lessoned learned (although trailing from a significant distance) are the need for transparent managing of expectations (5 mentions), flexibility (2 mentions) and a clear sense of urgency (2 mentions).