// . //  Insights //  Saving A Company Transformation From The Brink Of Failure

We’ve previously explored how business leaders can increase the odds of a transformation success through The Seven Truths of Transformation. But no matter how well designed or planned, business transformations can go awry in a whole host of ways. Companies’ norms and behaviors along with other adverse conditions can insidiously lead to slow momentum, missed targets, and overall fatigue.

While no two failing transformations are identical, we have identified some common patterns and dynamics. Addressing them effectively requires digging deep into the company’s DNA to identify the root causes that are preventing transformation progress and perhaps even perpetuating old ways of working. Only once these causes are properly understood can the company’s leadership team actively define a path forward to undo the thorny knot of business transformation challenges and make progress.

How to spot red flags in a company transformation

Many of the signs that a transformation is faltering are based on measurable outcomes: The transformation — and maybe even the company overall — begins to miss key milestones, while spending consistently exceeds budgets. Other signs aren’t as objective but are no less palpable, such as leaders who are at odds with each other, and worse, fail to deliver clear and consistent direction to their teams. Employees get confused about the purpose of the transformation, and disagree about priorities that need to be tackled, leading to gridlock in the working teams and significantly limiting the potential for success.  

Clients sometimes describe this phase of failure as feeling like they are stuck in quicksand — the more pressure that’s applied to make progress, the more the transformation stalls (with increasingly obvious disastrous long-term consequences). Least visible, but perhaps the most damaging to long-term company performance, is that the continual pivots, disagreements, and lack of progress put unrelenting pressure on employees, creating a high risk of burnout.

As challenges arise, the situation can quickly deteriorate to a point where internal disagreements start getting personal. Relationships fray and teams become territorial and eventually no longer assume positive intent. Such a breakdown in trust and collaboration becomes a huge hurdle to achieving common goals.

Evaluating problems in the business

We usually get called in once too many of these red flags have been raised. Our first step is to do an assessment of the situation, since leaders can have a hard time seeing clearly how deep these challenges and patterns run in the organization. Attempting to fix the problem without sufficient understanding is like applying a Band-Aid to a patient in need of surgery. Even if some actions achieve short-term improvements, the same issues will keep surfacing later. Instead, solutions should be designed based on the underlying nature of the failure.

A critical building block in our assessment is to ascertain how the company intended to run its transformation versus the reality of the operations on the ground — the difference between the two often being abysmal. Our interviews with stakeholders at all levels of the company unveil a host of revelations that help evaluate the precarity of the situation. 

Distressed employees who have long been silent often see these conversations as their unique opportunity to cry for help. They offer eye-opening quotes like, “Leadership communications lack in clarity and actionability — we get a lot of information but none of it is actually relevant for what I am being asked to deliver,” and “We don’t know how our performance is being assessed — honestly it seems like it’s just based on being able to handle whatever is thrown at us.” The mere act of asking for input on the challenges in the transformation often injects much-needed oxygen and a glimmer of hope to employees working in the boiler room.

The two types of causes for business transformation struggles

Over time a full picture begins to emerge about the company’s transformation struggles and their root causes. We see these causes falling into two categories.

The first is structural deficiencies, such as the lack of a unified vision and roadmap with clear milestones that teams are held accountable to, or the absence of risk management process. Structural problems can be quickly identified and are more easily addressable, though it might take some time and investment.

The second is cultural pitfalls. A transformation calls for different ways of working, including a level of cross-organizational collaboration that might feel unnatural for many organizations that are used to operating in silos. For example, a company might have a command-and-control environment, where there is limited tolerance for healthy debate. These unproductive behaviors are sometimes limited to certain populations (such as leadership or mid-level management), and sometimes broadly embedded in the organization’s ways of working. They can be harder to spot and take more time to properly address.

At times, an efficient and well-designed structure can mask behavioral issues. Conversely, highly productive behaviors and ways of working can go a long way toward compensating for structural deficiencies. In many cases, both types of issues cohabit and heighten one another. 

Designing solutions for transformation challenges

That’s not to say structure and culture are mutually exclusive; challenges often are rooted in a combination of the two. And while typically the structural causes are easier to fix, a solution will always be incomplete without also addressing the cultural ones.

Once causes are known and understood, typically a few well-designed and well-positioned interventions can unlock tremendous latent energy among employees and recreate momentum to accelerate transformation progress.