The word transformation seems to scare people off.

Many people associate the word with traditional, linear, multi-year programs that don’t take into account the speed of change, rarely test before deploying at scale, and expect significant investment of resources before any measurable business outcome is achieved. And I agree; those efforts scare me too!

You know the type of programs I am talking about — they cost millions of dollars, they are run by a vast team of consultants huddled in a war room somewhere, with very little visibility or transparency to the rest of the organization. They are rarely aligned to strategy. Even less frequently are there any KPIs in place that can tell the team whether they are going in the right direction.

When asked about what the goals of those efforts are the standard answer is “We will know when we get there”, my favourite type of response. And to make matters worse, the majority (over 70% according to McKinsey survey) of those efforts fail due to: lack of alignment, lack of holistic approach with multiple and often competing efforts happening at the same time, lack of interest from the leadership team to maintain or invest in the effort over a period of time; lack of employee engagement. There is not much we should be surprised about in the data.

Let’s face it: when you hear the word transformation you immediately think “Am I going to lose my job?” or “Here is another effort I need to support, what’s in it for me?”

So isn’t it time we do things differently?

The organizations we work with may have different burning platforms, but they all understand that the days of status quo are over. Change is not easy, it’s not comfortable, the concept of “self-disruption” may not sit well with all executives, especially when it’s their businesses (and their bonuses) that are being disrupted. But I don’t think any of them are under illusion they really have a choice (and if you are reading this thinking “My manager or my CEO thinks we are going to be fine — we are too big, we are not going to be disrupted, this is just a temporary set-back” etc..just remind them of Kodak, Blockbusters and ToysRUs).

So if we accept change is inevitable, we also need to accept that the change this time around is not about replacing one operating model with another (because by the time you make that change, the new model is going to be outdated too).

The new approach and the key skills we all need to develop are focused on getting comfortable with continuous change, continuous learning and rapid adaptability. A friend recently said “The only continuity I accept is one of permanent change: It’s not always a comfortable position, but it’s a necessary one.”

And this is where the concept of Lean Enterprise comes into play. At Spinnaker we define it as: “Enterprises operating their core businesses at scale while simultaneously adapting to change through continuous learning, self disruption, focus on customers, and innovating to drive long term growth.”

So if that’s the ultimate goal — enterprises that are so adaptable that they can change direction and adapt quickly to new market conditions, new competitors and generation z entering workforce, than it should be obvious that in order to achieve that goal the way we are running transformation efforts needs to change too.

Can you imagine a transformation effort that’s built on the same set of principles as the Lean Enterprise (continuous learning, small bets, transparency, embracing uncertainty, business agility, customer centricity etc)? Can you imagine a transformation effort that’s iterative and learning led, where you are expected to fail early on, run experiments, prove that something works in the organization before it’s rolled out at scale?

An effort where we know over the 3–5 years of the transformation program, everything in and around the organization will change (strategy, competitors, employees) and so building that adaptability into our transformation efforts and modeling and testing behaviours that we ultimately need in the organization is really the only way forward. In this new world, there is no straight line!


Sonja Kresojevic - The Case for Change as presented during Innov8rs Atlanta

Here's what it looks like if we apply the same principles used to manage our approach to building products, to manage our approach to driving enterprise-wide transformation.

Mindset

To be successful, companies need to establish a culture that recognizes that change is inevitable; that it is simply part of the fabric of every company. That inevitability is already clear when it relates to consumer expectations of technology, but it applies as much if not more to a multi-year program of change. The landscape companies will have to accommodate in 3–5 years, the typical length of a large scale transformation program, is going to be substantially different than it is today. If we go in with this mindset we can avoid the trap of our transformation approach being almost immediately out of date.

Measure everything

Just as we define our metrics of success for Lean Startup experiments or Agile sprints we need to do the same with transformations. We have to avoid transformation for transformation sake. Let’s stop moving the deck chairs on the Titanic and calling it a new operating model. Instead, let’s be clear about what business goals we are trying to achieve and use clear and simple metrics to tell us if any specific component of the transformation initiative is actually having an impact or not.

Early adopters

Rolling out a transformation program across the entire company simultaneously is a recipe for disaster. Roger’s adoption curve approach to finding early customers ready to embrace and support change is crucial here. We look for parts of the company that are experiencing the target problem, that know they are suffering and have started to take action to resolve it. If we can’t find a part of the company that fits this category then this likely isn’t a problem that needs to be fixed.

Run small-scale pilots

Once we have an early adopter identified we are self-conscious about rolling out the change approach as an experiment. Our goal is to get the maximum amount of learnings while doing the least amount of transformation work. Any of you familiar with the MVP concept will recognize this approach. We are using pilot programs to experiment with Minimum Viable Transformations.

Embrace failures and apply learnings

Very few plans in a corporate setting go smoothly. For wide-scale transformations involving thousands of people and many many months of work, it is almost inevitable there will be bumps in the road. Just as the disciples at the church of Lean Startup (guilty as charged) will preach the value of embracing failures for product experiments as long as they happen quickly and we apply their learnings, the same applies to transformations.

We don’t need to wait until the full program is delivered and rolled out to analyze what is working and what isn’t. We don’t need to be seen as personal or corporate failures if we are reviewing a small experiment that didn’t work well. If we wait 36 months after investing millions of dollars on a new program until we find out that the entire program was a failure, then heads should indeed roll.

Scale when you have traction

Lastly, let’s again follow the rollout approach for successful products. We have run pilots for a specific component of the transformation with early adopters and learned valuable lessons along the way about what works and doesn’t work in the context of the transformation initiative.

Only once we have evidence of traction and the capacity to deliver value that aligns with our broader business goals, only then do we roll it out formally as a wide scale initiative.

This is a guest post by Sonja Kresojevic and Jonathan Bertfield, partners at Spinnaker. Sonja will be facilitating 3-hour masterclasses on Lean Enterprise Transformation during our upcoming Innov8rs Summits in Madrid and LA. Find out more about their upcoming book Case for Change — Demystifying Lean Enterprise transformation via https://www.senseandrespondpress.com/the-case-for-change and via www.myspinnaker.co