The transformation cycle: From insight to impact

Transformation. It’s a word that gets thrown around a lot – in boardrooms, strategy meetings and executive keynotes. Beyond the buzzwords, what does it actually look like?

For most organizations, transformation isn’t a single, monolithic event with clear start and stop. In real life, transformations occur in many places concurrently and often without any conscious reconciliation of the input and effects of each. Real transformation is a continuous cycle – a process that seamlessly integrates people, process and technology to create lasting impact.

Big monolithic transformations also often carry the stigma of mega-program success and failure statistics. After seeing lots of organizations struggle to get their arms around these programs, we’ve developed an approach that can be used to help bring clarity to what’s happening and what needs to happen to make these programs successful.

Step 1: The case for change

No matter where we get engaged helping a client with transformation (from start, mid-stream, rescue), the first thing we do is swim upstream to understand the case for change and the subsequent business case.

Sometimes, perhaps even often, organizations don’t really state the case for change, but in a conversation, this becomes immediately apparent. “We had a cost issue so big we were not competitive” or “our systems were so old that we couldn’t implement new technologies that are key to our customers” or “we were so dysfunctional that our internal businesses couldn’t even talk to each other let alone collaborate to solve the problems of our global customers.”

Inside each of these statements is the case for change.

Step 2: The business case

No matter what change is being driven in an organization, someone is eventually going to ask “where’s the business case for this?!” No matter how noble or important the case for change is, there has to be a set of outcomes that materially address the challenges expressed in the case for change. These are almost always found in one of the Big Five:

1. Revenue/growth
2. Cost/productivity
3. Quality
4. Customer satisfaction
5. Employee satisfaction

There are very few things business will spend time and money on that don’t move the needle on one or more of these Big Five. We take the case for change and chunk it out into each of these buckets and start to get specific about which indicators are being moved.

Some of them are easier than others. Some of them have to be turned into a “lack” statement. For example, a business might not be able to characterize exactly what the benefits of customer satisfaction are. Turn that around and ask “what is the lack of customer satisfaction?” Now a conversation about customer acquisition costs, and customer turnover or churn costs can occur. Perhaps there is literally a stock price delta between companies growing at X versus those growing at Y. 

This is not to say that there must be a huge existential level objective behind every transformation. HR might be looking to transform employee services to reduce turnover. Turnover is expensive! It costs real green dollars, but it can also damage culture and damage a company’s marketability (like really poor Glass Door ratings) and reduce its ability to attract and retain top talent.

Regardless of the basis for the case for change, a business case must be built that justifies time, organizational focus and limited resources.

Step 3: Program strategy

Now the case for change and a business case clearly outline the reasons to transform. The next challenge is figuring out how to get there. There are options.

Is it big enough to be a stand-alone program? Who should the sponsor be? Do you have an enterprise project management office (EPMO) or a transformation office? Is the change mostly in one part of the business? Does it have a big technology component? These questions and quite a few more help drive clarity around the program strategy. Who is leading it and from where.

Register for the webinar The transformation cycle: Ensuring comprehensive planning & execution from the case for change through change management

Step 4: People, process and technology (PPT)

The next step is to decompose the big change into elements. In today’s world, it is almost impossible to make any sort of substantial change without it impacting PPT. In this step, a method borrowed from statistical process control is used called the SIPOC. For those not familiar, it’s an acronym for:

• Suppliers – who has to contribute
• Inputs – what are they contributing
• Processes – what is actually happening and who is doing it
• Outputs – what is the net effect
• Customers – who is receiving that output

This is a super helpful way to begin to identify all of the people involved, which processes are impacted and what is the underlying technology that supports the people and process.

A (more) coherent picture will emerge about people and labor strategy, operating models and process models and technology that must all be galvanized to come together to make this transformation successful.

Step 5: Understanding the ripple effect

New systems, new teams, new workflows – change doesn’t happen in isolation. The real magic is in taking a 360-degree view of everything in the SIPOC. One shift inevitably affects another. Change a process and now skills and costs and systems come into play. Change a technology and now you must look at organizational structure, labor contribution and process resilience. The examples are endless.

If these ripple effects aren’t managed, companies end up dealing with a disaster made up of some combination of unhappy people, ineffective systems and broken processes.

That’s why this 360-degree impact assessment is so critical. Before diving in, organizations need to ask:

• How will new processes change daily workflows and systems?
• Will employees need additional training? Do we need different people?
• How do we improve/replace the systems in concert with the rest of the change?

Ignoring these questions can derail even the best-planned transformations.

Step 6: Making it stick – implementation and change management

Now that everything is more clear, implementation can begin and with a healthy dose of change management, that change will stick.

At the end of the day, transformation isn’t a one-time project. There are many transformations occurring in large companies. The quality of those transformation can be vastly improved if they don’t see change as a single event, but just a new reality. 

Integrating the many transformations and managing the ripples they each inevitably cast on the others results in far better and more predictable results. The transformation lifecycle unlocks that potential.