5 Tips to Reduce the Risk of Failure in Your

Transformational Efforts

Modern industry is a fast moving environment, constantly updating and changing. Businesses need to embrace sustainable transformation in order to ensure competitive advantages, modernize company culture, and be able to meet the needs of their growing customer base.

By Rigo FriasFarmin Zaman

AbstractThe purpose of business transformation is to create a strategy that modifies the people, processes, and technology initiatives of a company into alignment with their vision. With-out transformation, companies risk becoming irrelevant in the fast-changing industry. Successful transformations result in more engaged employees, stable and predictable pro-cesses, improving operational decisions as they are becoming more complicated and am-biguous, enhance collaboration between skilled individual leaders, and promote working together to understand difficult challenges to solve them. Companies want to transform their organizations so that they are not constrained, operating in silos and defaulting to traditional boundaries. Transforming organizations help drive leadership behaviors needed to align with the evolving operational business strategy.

Tips to Reducing the Risk of Failure in Your Transformational Efforts

IntroductionObsolescence Risk is defined as the risk that a process, product or technology used or produced by a company for profit will become obsolete, and therefore no longer competitive in the marketplace. The fear of becoming obsolete effects all companies to some extent and is an inherent side effect of our growing economy. Consider Kodak for example. Until the 1990s, it was regularly rated one of the world’s five most valuable brands (Economist, 2012). Kodak’s revenues peaked at nearly $16 billion in 1996 and dropped to $6.2 billion in 2011. Kodak recognized that their traditional business was rendered obsolete. Kodak failed to adapt adequately, while its competitor Fujifilm transformed into a profitable business under the same constraints. In order for Kodak to stay competitive, they had to minimize investments in the old methods and maximize investments in new technologies and methods once they realized that digital photography alone would not be very profitable. Kodak was slow to change due to their culture of complacency that existed, despite their strengths in investment in research and manufacturing. While Kodak lacked the high-tech mindset, Fujifilm was quick to diversify successfully.

Established companies are aware of what a good business plan looks like, but do they have the same understanding of what constitutes a good transformational plan? In a fast-moving environment, businesses need to embrace change to maintain their competitive edge and continue to meet the needs of their growing base of customers. Companies that are mindful in reducing the risk of failure in transforma-tion efforts can create the structure needed to effectively manage processes and carry through project ideas efficiently.

This white paper will help companies understand why failures in transformation efforts exist, behind the vision and how to reduce the risk of failure in these efforts.

Tip #1: Avoid a One-Dimensional Focused ApproachFor adequate transformation change, multiple simultaneous initiatives must be set in motion because there is no one type of change initiative that will bring forth exceptional levels of process improvement. Failure around transformation initiatives results in frustration, exhaustive efforts, and deteriorating competitive position. Successful efforts are a byproduct of understanding the risks of how to reduce failure, and really focusing on sustainability of our transformation efforts.

Reducing the risk of failure in transformation efforts comes from three core pillars:

1. Process: how the work is performed

2. Management Systems: how the process is managed, and the tools and mechanisms to drive the right behavior

3. People: those who execute processes and management systems

Within each of these pillars, effective management of obsolescence requires proactive, reactive, and strategic management. The focus of these three pillars should not be in isolation, and success is realized through focusing on all three dimensions rather than in singularity.

Tips to Reducing the Risk of Failure in Your Transformational Efforts

Tip #2: Have a Plan to Support the VisionA clear path toward achieving the transformation is vital to reducing potential failures in the transformation journey. Development of a set of milestones and blueprints with clear assignments is needed to drive ownership. This consists of understanding how long transfor-mation efforts will take, holding people within the company accountable to execute the vision, and provide a good sense of resources required. A plan to support the transformational concept may also include an assessment framework that defines the risk as a function of the impact and likelihood of obsolescence. Creating and analyzing a framework will help the company understand the risk across the organization and allow companies to develop improvement plans for continuous risk mitigation. Many efforts fail because there is no plan behind their transformation efforts.

Tip #3: Involve and Empower EmployeesChange often requires fundamentally new ways of doing business in order to stay competitive with a fast-changing environment and industry. Driving success in changing the core of the business requires significantly more input than simply a top-down approach. The focus should be placed on changing the behavior of a large population of people in a short time frame. This means that truly successful transformation efforts include aligning the skills of the people, improving systems, and changing habitual behaviors of people with newly defined requirements. The risk of failure is reduced in transformation efforts by including the people who execute processes, as well as management going beyond simple performance metrics. Develop talent, culture, and cultivate the growth of leadership collective in-stead of through individual capabilities. At the core, success is driven through a greater speed and flexibility of adapting and responding to changes and challenges by strengthening the capabilities of the people who are executing the processes and management.

Complacency is built through trying to find micro solutions to complex issues. Businesses tend to become complacent based on past success which causes the businesses to be reluctant to transformative efforts, and therefore remain inflexible toward adapting strategies. Lack of visible crises and low performance standards also cause complacency in businesses, which puts them at risk of failing in their transformational efforts. Creating a sense of urgency at the beginning of a business transformation process will help drive people out of their comfort zones. People need to understand how their actions can reinforce the status quo so that they do not become defensive at the thought of a changing environment. Another reason complacency exists in the industry is due to insufficient feedback, which limits people from delivering effort and reengineering new strategies for success.

One method for keeping complacency low is to produce short term wins and encourage detailed analytical thinking to help build sustain-able transformation strategies through continuous revision of the overall organizational vision.

Tips to Reducing the Risk of Failure in Your Transformational Efforts

Tip #4: Avoid ComplacencyAnother point of failure in the process is confined to the organization’s behavior of complacency. Companies often work on improve-ments without effectively transforming their respective organizations. Transformation is turning a state of complacency into a state of employment engagement hat will drive bottom line results. Embracing change in the processes is crucial to reducing the risk of failure in transformation efforts.

Complacency is often built through finding micro solutions to complex issues. Organizations tend to become complacent based on past successes, which creates a reluctancy toward transformation efforts, and therefore remain inflexible in adopting new strategies. Lack of visible crises and low performance standards also cause complacency in business, which puts them at risk of failing. Creating a sense of urgency at the beginning of a transformation process will help drive people out of their comfort zones, helping them to understand how typical actions reinforce the status quo so that they do not become defensive at the thought of a changing environment. Another reason complacency exists is due to insufficient feedback, thereby limiting people from making an effort to engineer new strategies for success.

One method for keeping complacency low is to produce short term wins and encourage detailed analytical thinking to generate sustain-able transformation strategies through continuous revision and in the light of the overall organizational vision.

Tip #5: Have the Right Core Competencies with the Right MindsetTransformative change efforts require specific skillsets and traits such as: leadership, willing to challenge the status quo, and have knowl-edge on several manufacturing techniques. Many organizations misinterpret this to validate their strategy based on having only a few people with the necessary skillsets and techniques. Change requires new mindsets, not just new skills. Executives should consider the need to advance both individual and collective leadership mindsets. For transformative change, businesses need to start growing their minds beyond just the textbook. Improving core competencies reduces the risk of failure in transformative efforts by developing a clear view of the current culture through feasibility studies, as well as identifying and understanding the drivers and core capabilities that are required for the business strategy. Crafting core competencies also includes recognizing the available capabilities and creating the quali-ties and skills required to have a fair distribution of roles and responsibilities in the organization. The success rate of our transformational efforts can be increased by allocating time for learning and taking a deeper look at how to think about the situation. Learning how to learn will help the business understand problems more clearly, reflect on assumptions, and integrate varying perspectives. If there is a lack of a core competency, hire talent for the business you want to become rather than for maintaining your current status quo. This per-spective allows the company to align the talent with the changes in the organization process. The results of enhancing core competency is a process-centered organization within a collaborative culture.

Tips to Reducing the Risk of Failure in Your Transformational Efforts

ConclusionThe fear of becoming obsolete effects all companies to some extent and is an inherent side effect of our growing economy. The success of transformation efforts is vital to staying competitive in your industry, which is heavily dependent on reducing the risks of failure in the implemented efforts.

A successful transformation effort requires having a clear, consistent and sustainable initiative from the start. Companies often fail to realize that transformations are not the conversations that take place in meeting room. Instead, it is changing the behavior from the production floor up through the entire organization, and only happens with engaging front-line employees which require more than merely training employees or simply stating that the company is on a transformational journey.

About Farmin Zaman - Farmin has a wide range of industry experience including working with the provincial and federal government, transportation authorities, project management and consulting experience, specializing in operations and strategic management, as well as transportation design and planning. She has over three years of transportation engineering experience as well as logistics and supply chain management.

About Rigo Frias - A seasoned operations professional, Rigo Frias has more than 18 years of experience in manufacturing and operations. He has led a wide range of assignments and has delivered results in companies worldwide by implementing lean manu-facturing programs, business process reengineering, management systems and maintenance processes and systems. He has worked in a broad range of industries including financial services, pharmaceutical, call centers, insurance, electronics, chemicals, mining, defense industries, energy sectors, beverage and food processing.