Organizational Transformation

Organizational Transformation

Organizational transformation initiatives are complex processes that require significant efforts and attention from the entire organization. Statistics show that no more than 30% of transformations achieve the expected objectives, so understanding their dynamics and characteristics are essential to overcome these challenges successfully.

Alejandro Hill, Manager of Organizational Transformation of Axity Chile, and Carlos Acosta, Senior Manager of Strategic Consulting, invite us to reflect on the keys to success of Organizational Transformation.

What is causing the current wave of organizational transformation?

The world changed abruptly after the financial crisis of 2008, where we are faced with a new world and economic scenario characterized by volatility, uncertainty, complexity and ambiguity (known as the VUCA environment for its acronym in English). This has led to the need for organizations to generate significant improvements in their forecasting and adaptation capabilities.

On the other hand, technological development in areas such as artificial intelligence, IoT, cloud and mobility are transforming traditional businesses and allowing the generation of new disruptive models. In this scenario, where almost any problem or business opportunity can be solved with technology, the greatest challenge is to transform organizations, from their people, processes, leadership and even their organizational culture, to make them evolve and achieve competitive advantages.

The 4 keys to a successful organizational transformation.

Define the purpose

With so much pressure on the need to change, it is a priority to understand that transformation is not an end in itself, but a means to achieve clearly defined and measurable organizational goals. Why do we have to change? What awaits us if we do not transform ourselves? Where do we want to go? and How are we going to measure the success of the initiative? These are fundamental questions that must be answered when starting any transformation process. These responses will allow us to have a purpose, which is the main mobilizer of change.

Manage organizational capabilities

The gap that separates the current state of the organization from the desired state will determine the magnitude of the efforts to be undertaken, whether internal or external. These efforts are often underestimated, disregarding the normal workload and peaks of the business, other projects running in parallel, the competencies and skills required, and the time required to achieve the transformation goals.

Leadership

Another extremely important dimension is leadership: organizational transformations are Top Down, so they must be guided and managed. This implies that we cannot expect real change if the leaders are not really committed, and that it is they who must permeate the organization. In this context, what should we understand by transformational leadership? Leadership is not only explicitly communicating and supporting a transformation initiative, but also implies taking actions that show that said initiative is important; and, on the other hand, it involves facilitating and avoiding the frictions of transformation in people. This means empowering employees to shift their focus from day to day to one aimed at transformation, changing priorities and dispelling any obstacles they have to direct efforts that contribute to transformation. In short, the leader must always be in tune with the purpose, communicate and act effectively and consistently, and be an organizational facilitator.

Metrics

Finally, it is essential to manage through metrics. Organizational transformations are long processes, which makes it necessary to generate intermediate milestones throughout the change, to be able to identify possible deviations early and manage them. On what variables should we measure a certain transformation process?: The understanding of the purpose and the objectives to be met, the participation and commitment of the leaders, the capacities of the organization and the teams that participate directly in the transformation initiatives, the adoption of new technologies, practices and processes. In the context of milestones and metrics, beware of the Quick Win “trap”: quick or short-term victory can be the enemy of quality, and can distract us from purpose. In that sense, you have to wonder if we are achieving Quality Wins as well. In a transformation process, it is not only useful to go fast, especially if the organizational culture is changing, it is necessary to ensure that real and sustainable progress is being made in the long term.