Another Major Risk to Transformational Efforts
In the prior blogs located here See Beyond the Horizon
, I commented on how data shows that 98%
of all institutions stop their transformational efforts in their entirety after
eighteen months. History has taught me the following lessons as
to why this is the case. As discussed in previous blogs in much more detail,
the four common reasons why organizations abandon transformation are as follows:
1) Organizations waste the first six
months of their improvement efforts
2) Organizations fail to monitor the
breadth and depth of change
3) Organizations failure to get
everyone involved
4) Organizations operate in two
systems
One of things I frequently ask
organizations is if they do not want to use process improvement as a structured
approach to improving operational performance, reducing product development cycles,
and strategically growing their business, what is their plan B? Since everyone is trying to perform better and grow
their business. If your organization stays the same, you are actually falling
behind.
There is another common failure point in
transformations that can occur at any point in the improvement journey. That is
the turnover of the President / CEO. I did not include this in the four-part
series, because this occurrence is not common inside the first 18 months. I
frequent see leaders near retirement avoid large scale change. More often I see
a big push toward status quo at the end of the leader’s career. And intuitively
this makes sense. Why would one want to incur risk and the pain of change when
you are a few months or a year from retirement?
However, I have seen extraordinarily
successful organizations have a great improvement program in place only to see
it entirely abandoned within a few months of a new leader coming on board. Even if the entire leadership team was on
board and driving real change with tremendous results, I have observed repeatedly where a new leader
changes direction and the entire leadership team follows suit without any push
back.
In fairness, some CEOs leave for
better opportunity. Great CEOs are in high demand. Hitching their wagon to the
process improvement train can be a reason for their success. Other times they simply
retire. What we are concerned about is how we can ensure our culture of
improvement continues beyond a leadership change.
This is tricky and has constraints,
but I have a couple of thoughts on how to whether a leadership change. First, if your culture is strong enough you can make
process improvement part of your search criteria. This can ensure that you
bring in a champion of organizational excellence. Second, if possible, you can have a succession plan
with a process improvement champion next in line. I have seen both of these
approaches succeed in ensuring continuity of transformational efforts. The
tricky part is frequently these discussions happen at the board level, so it is
difficult to influence the hiring criteria and decision making. Having a
succession plan can influence future change and ensuring the next in line
people have process improvement skills, understanding, and experience can go a long
way in ensuring the transformation effort continues.
A final effort is to have improvement deeply
aligned and embedded with everyone that stays following a CEO departure. If an
entire leadership team is driving change, it is a bit more difficult for a new
CEO to change direction dramatically with respect to improvement efforts. If
you recall in part three of the four-part series on why transformations fail, failing
to get everyone involved is a common source of organizational failure. If
senior leaders are not involved in meaningful way, lack of engagement will show
up again as a significant risk when you have turnover at the top.
Hopefully, your organization is thriving
and has made it past the first few years of transformation where the risk is
the highest. Your next long-term risk is to whether change or turnover at the top.
Plan accordingly.
Lean Blessings,
Ron
Ron Bercaw, President, and Sensei
Breakthrough Horizons
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