Creating an Environment for Organizational Transformation

Transformational Change

Truly successful transformation requires organizational leadership to not only “talk the talk” but “walk the talk.”  This is no less true when organizations work toward embedding a culture of continuous innovation in order to adapt to their changing environment. Leaders are pivotal in successfully creating conditions that will allow people to work, act, and behave in a different way.

An organization successful in transformation, engages and inspires employees to embrace the change, while recognizing the impact that change has on them; making sure to address their concerns and objections. Employees will look to their leaders for a vision, beliefs, values, gravitas, and support as they decide to what extent they will embrace the transformation.

Creating the Conditions for Continuous Innovation – Mindset & Mechanics

1. A Growth Mindset

Fostering an environment of learning is the holy grail of driving continuous innovation and organizational transformation, thus embracing a “growth mindset” is key. Some best practices that underpin a growth mindset, and that can be reflected in the leader’s behavior, include the notions that:

1. Customers define our outcomes. They are the definitive truth
2. We create a safe learning environment: we aren’t afraid to fail
3. We change the conversation and focus on customer-validated learning
4. We stop success theatre: Scrap the vanity metrics in favour of learning metrics
5. We challenge the addiction to being right; humility is underrated
6. We get better things done, faster; we empower our teams and put accountability where it needs to be

So what do leaders think about as they embark, or indeed continue, on their transformation journey?

1. Empowering each other…stop creating unnecessary blockages
2. When blocks do occur, wielding the “golden sword” of influence swiftly and effectively
3. Starting small with razor-sharp focus on the real priorities…stop wasting time on things that don’t matter!!
4. Creating conditions that encourage trying and learning …giving teams permission to experiment…
5. Creating a learning environment for the whole organization…Humility is critical…
6. Getting stuck in… starting to live and breathe the new mindset

2. The Mechanics for Change

It is important to realize the existing processes and structures in an organization undergoing change may not be complementary to a new way of working. As organizations begin to test this new way of working with a small number of project teams, they must think about:

• Whether there is a decision-making construct in place that facilitates leaders asking a “different set of questions” and funding the team in a metered (or dedicated) fashion, based on their learnings (e.g. funnel metrics, virality metrics, customer retention metrics) and not on success theater/vanity metrics (e.g. registered users,  downloads, ROI five years from now)
• Not “punishing” teams for productive failure, but celebrating their learnings
• “Protecting” projects from things such as quarterly stretch targets, urgent prioritizations to other projects, and cost cutting activities.
  

Leaders also need to actively support the team structure required to execute on these projects.

• Ideally, teams are fully dedicated to the project. To paraphrase Ben Horowitz, it’s preferable to have five people fully dedicated than 25 people all working at 20% allocation, and only having enough information to confuse each other. Start small – optimally, no larger than a “two-pizza team,, but typically smaller than that. The team should have the requisite number of members to deliver the desired outcomes of the project.
• Where possible, you should establish an “island of freedom” (where teams are given delegation of authority to work in a sandbox, and empowered to make decisions outside the usual organizational decision-making construct) for these small, cross-functional, dedicated teams. These teams may also be granted access to empowered points of contact that can expediently evaluate the relevance of company rules and processes to the team’s endeavors, and grant exceptions.   
• Ensure the team members have a complementary skill set including commercial and technical to avoid running the risk of creating a wonderful technical solution that the market will not embrace.
• Identify other critical functions (Finance/Compliance/Legal etc.) who may need to be engaged during the process so that they can be skilled up accordingly).
• Ensure they have full delegation of authority in terms of decisions that need to be made.

So, if the organization expects leaders, project teams, and employees to behave in a different way, and gives them the tools to work in a different way — then the way in which people are held accountable also needs to be considered. So, it is important to think of:

• Ensuring the individuals on your project teams, and the managers they report to, have aligned incentives and performance objectives and an effective feedback loop.  Conflicts of interest can have catastrophic implications on project outcomes.

The importance of the mindset and mechanics involved in an organization’s transformation cannot be underestimated, and so, leaders must be aware of the influence and impact they can have on their employees with respect to transformational change. The organization depends on its leaders to drive the desired outcomes of the transformation.

Thank you to Sinéad Clarkin for contributing this piece. If you seek to bring the entrepreneurial spirit to your organization, we can help.