The top five things you need to know to implement successful organisational transformation

Successful transformation requires a resilient organisation, constantly responding to the VUCA world while simultaneously driving change and innovation, says Lynda Folan. We must build resilient organisational cultures that enable businesses to flourish and transform sustainably

The organisational transformation context

Researchers have been telling us for a long time that we live in a VUCA world that, at its core, is volatile, uncertain, complex and ambiguous ( for example Bennis & Nanus, 1985). However, many organisations have simply ignored this and continued to attempt organisational transformation as they have always done. For businesses to thrive in this VUCA world, it is imperative that they have the capacity to evolve successfully and transform on an ongoing basis, not as a once-off business activity. We live in unprecedented times, and the business environment is more volatile and uncertain than ever. Businesses that aren’t constantly evolving will simply not survive in the unrelenting VUCA world.

In the past, organisations have invested significant time, money and resources into large-scale overengineered transformation programs that take years to implement. It has been the norm to build independent transformation teams that deliver complex and convoluted programs that take years to action and seldom deliver the outcomes promised. We no longer have the time or the resources for this in the volatile VUCA world. Nor do most organisations have the capacity for this way of doing business. In 2022 and beyond, organisations will need to change their focus and build resilient organisational cultures supporting agile and ongoing evolution. When changes are required, the organisation will incorporate this into business as usual and continue to move forward without significant interruption. The days of building large change teams that deliver transformation projects and promise unrealistic outcomes are behind us. John P Kotter (1995) says 80% of change programs fail to deliver on their promises. It is time to refocus our attention on building resilient organisations and stop wasting resources on transformation projects that fail to deliver results.  

Organisations that want to flourish in a VUCA world must systemically build resilience into every aspect of the organisation’s functioning so that they have the capacity to transform, evolve and stay ahead of the curve. For organisations to thrive in today’s dynamic, changing, and uncertain business context, it is essential that they invest in developing a resilient organisational culture that is agile, creative and constantly challenging the status quo.

Five critical requirements to build a resilient organisational culture and deliver transformation

Building a resilient organisational culture that enables agility and flexibility in every aspect of business functionality has five critical requirements.

1. A  clear vision that defines the organisation’s ‘Why’.
2. Leaders that are resilient and focused on building an agile and innovative organisational culture.
3. External networks that enable environmental responsiveness.
4. Ongoing development of resilience and innovation (continuous improvement).
5. Demarcated Innovation and Experimentation.

 

1A  clear vision that defines the organisation’s ‘Why’

Simon Sinek (2011) makes it clear that for organisations to transform, they must start by defining the ‘Why’. The ‘why’ inspires people to take action towards and deliver transformation and change. A clear vision that defines the organisation’s ‘Why’ is imperative in the VUCA world. A lot has been written about the importance of a clear vision and strategy, and research supports the need for clarity of focus with a clear vision and strategy (for example Kantabutra & Avery, 2010; Taylor, Cornelius & Colvin, 2014). In the VUCA world, the issue is not whether there is a document that defines the vision. The problem is whether the vision is fully understood and the driving force of everything done in the organisation. In a genuinely resilient culture that is transforming on an ongoing basis, everyone knows the vision, and everyone is living and breathing the ‘why’.

 

2Leaders that are resilient and focused on building an agile and innovative organisational culture

 After spending many years working with organisations across the globe to bring about transformation, there is a straightforward rule that applies – ‘if the leadership are not 100% committed, the transformation will not be achieved.’ Successful organisational transformation requires that leaders are personally resilient and passionate about building an agile and innovative culture. Edgar Schein (2010) says, “The only thing of importance that leaders do is create and manage culture.” The starting point of business transformation is the leadership, the leader’s resilience and their capacity to deliver change. If you are going to transform an organisation successfully, the leaders are critical.

3External networks that enable environmental responsiveness

Organisations must keep a watchful eye on the external environment to realign their strategy and maintain responsiveness.It is no longer acceptable to wait for strategic planning sessions once a year or to be pushed by external factors. Organisations must have external networks that allow them to stay attuned to the external environment and respond to the requirements for evolution. Charles Handy (1995) suggests that the best time to make changes is not after you have reached the peak of success but before achieving it. If organisations do not continuously assess their environment and align with these changing dynamics, they will eventually decline or become irrelevant to their clients, customers, or community. To constantly transform and stay ahead of the curve, the organisation’s external networks must be well developed to stay ahead of the environmental changes and respond when there is a need to make adjustments. Now, more than ever, organisations must remain attuned to the external environment and have the agility to meet the demands of the VUCA world.

4Ongoing development of resilience and innovation (continuous improvement)

Well-designed development strategies are crucial to unlocking the organisation’s potential. Strategies designed to enhance personal resilience are essential for building resilient organisational cultures. It is even more critical that the leadership are developing their resilience, as, without resilience, they will not be able to deliver a transformational leadership style (Folan, 2021). The other key development focus for effective organisational transformation is innovation and continuous improvement. It is essential to build this capability at all levels of the organisation.

5Demarcated Innovation and Experimentation.

Innovation is one of the buzzwords that few organisations fully understand, and most organisations fail to deliver it. For an organisation to successfully transform, it must have demarcated time allocated to the process of innovation and creative thinking. Tacking innovation on a meeting agenda is not enough. Innovation occurs when there is time to explore and experiment without restraints and timelines. This is most effective if it occurs outside the standard linear frameworks of the business and outside the everyday context of the organisation. If companies want to deliver transformation, there needs to be time dedicated to innovation with the right people in the room.

In summary, successful transformation requires a resilient organisation, constantly responding to the VUCA world while simultaneously driving change and innovation. The VUCA world is unrelenting and will not allow us to rely on past strategies. We must build resilient organisational cultures that enable businesses to flourish and transform sustainably.