Authentic Transformation

Authentic Transformation

We see businesses repeat the same, easily avoidable transformation problems. When this is the norm, it’s no wonder that 70% of all transformation initiatives fail, but it is cause to pause that people haven’t stopped, thought about it, and decided to do things differently. If you want your company to break out of the cycle, here are the three most common, fatal errors to be aware of when it comes to business transformation.


Fatal Error #1: Failure to Change When Change is Needed

Back in 1965, the average time spent by companies in the S&P 500 was 33 years. This dropped to 20 years by 1990 and is predicted to fall to 14 years by 2026 (per Innosight). Some of you might remember the Encyclopaedia Britannica… but those of you below a certain age won’t. Others might have fond memories of Kodak’s cameras – but you’ll be hard pressed to find one nowadays, given their not-so-recent bankruptcy woes.

Both companies had great products, and dominated their respective markets for years as a result, but neither could see that it was time for change. Neither was ready for change. Kodak couldn’t cope with the trend towards digital cameras, and the rise of the internet (and Wikipedia in particular) meant Brittanica’s days at the top were numbered. It is no longer enough for companies to be good at what they do – they now need to be adaptive, responsive, and even pre-emptive when it comes to the changes in their markets. Is your company adaptive? Is it ready for the challenges of the future, as well as for those of today?


Fatal Error #2: Change Where None is Needed

While some companies get stuck in stagnant patterns of thinking and rigid ways of doing, others seem to value change for its own sake, or, worse, are forced into it by trigger-happy investors. This can often result in disastrous, unintended consequences. This is especially true when stakeholders enact change just because competitors in the market have themselves changed, and rushed, copycat change is pushed through in response. The result is that companies are increasingly following fads rather than facts, and seeking short-term results rather than long-term sustainability.

A recent study by PwC highlights this mindset: the average tenure of CEOs in the UK has dropped to 4.8 years, down from a high of 8.3 years in 2010. New CEOs, aware of the pressure to deliver ever elusive “shareholder value” often go about enforcing wholesale changes in order to meet these unreasonable expectations. When these changes fail to produce the outcome desired, they are fired, and the cycle is left to repeat itself. Is your company constantly chasing the ‘next big thing’?


Fatal Error #3: The Wrong Kind of Change

We mentioned above that 70% of transformation initiatives fail. The sad fact that accompanies this is that billions and billions of dollars have been spent on these initiatives, only to see them crash and burn. ‘Solutions’ sought after and implemented include everything from rolling out new software across the firm, to setting up new incentive schemes for employees, to hiring specialist consultants to solve business problems. All of these are expensive, but few are likely to yield significant, lasting results.

Why? Simply put, because most businesses purchase solutions without understanding the problem they face (even where they believe they do). Of the 70% of transformation initiatives that fail, 70% fail because of mindset issues surrounding the proposed change (per McKinsey). To paraphrase Ron Heifetz, a professor at Harvard’s Kennedy School, most companies seek technical solutions to what are actually adaptive problems. A technical solution would be the right solution where the both problem and the solution were known, but an adaptive solution is needed when the problems you face and the solutions you need are unknown and undefined.

The only way to tackle an unknown problem and to define a solution where one does not yet exist is to shift consciousness – to raise levels of awareness. That’s how you tackle an adaptive problem. Is your company planning on implementing a change initiative, and are you sure your company is going about it the right way?


So what can Authentic Business do?

If there’s one thing we specialise in, it’s mindset change – raising consciousness and awareness. If you’re interested in finding out a little more about what that could mean for your company, why not contact us here?