It is understandable that when it comes to transformation, many enterprises leap straight to thinking about the operating model or digital platforms that they will implement, but take less time to consider the ‘human factor’. This can be a costly oversight, as without considering how people will engage with the transformation, new processes and technology will not be fully utilised, and the transformation will not achieve the desired return on investment. The time it takes to recover from this oversight and make technology or assets productive can be lengthy – or may never happen. The result is that about 70 percent of transformations do not realise the benefits that were expected.
To overcome these risks, when architecting a deliberate and dynamic transformation, the key is to make sure you have an organisational culture that is fit for transformation. This is an environment that embraces change, has the capabilities to support change, and deeply engages staff and stakeholders before and throughout the journey.
A culture fit for transformation
Transformation can be quite challenging for people, as they have been successfully doing things in a certain way, and you are suddenly asking them to do things in a different way. Therefore, you need to build readiness for the transformation, which may in fact require a 'transformation of culture' before the actual business transformation.
Enterprises that have a culture fit for transformation recognise that transformations need to be people-led, business-centred, and technology-enabled. The rationale for this is simple – enterprises don't change, but people do. These enterprises consider whether company culture aligns with strategic intent, and encourage creativity, innovation, continuous improvement, ongoing learning and excellence. They seek to resolve any capability gaps, as transformation requires some very distinct disciplines and skills. They also have a leadership team that is in tight agreement on the transformation journey, and offer consistent, engaging communication before and during the transformation.
A culture of engagement
A culture fit for deliberate and dynamic transformation also ensures that people are engaged in defining the business problems that need to be solved, as well as the solutions. They need to be central to asking, who are we today, and who do we want to be tomorrow? They need to be engaged in building the strategy for change, forming the roadmap towards that strategy, and the business requirements. This way, the transformation is much more likely to meet business needs, and people are genuinely invested in making the transformation come to life and be successful.
Engaging people in this way can be helped with the use of digital solutions. For example, KPMG helped a government organisation to plan its transformation with the input of its staff using an online, interactive platform. We helped the organisation gather insights into its values, what those values look like in terms of everyday behaviours, and how they could be captured in the future state.
Engagement beyond the core
An enterprise with a strong transformation culture will not just engage its people, but also the surrounding ecosystem of suppliers and partners, or even the customers and community that the transformation may impact. This stakeholder engagement needs to be a methodical process, as it requires identifying all of the people that need to be engaged across complex ecosystems. It requires asking who will be affected, what are their concerns around transformation, and having a detailed program for how everyone will be engaged.
A good example of this approach was an education organisation that needed to rebuild after a fire. The organisation was integral to its local community, so rather than simply starting to rebuild, it first engaged with staff, aligned organisations, and local community members to understand any concerns or considerations before finalising the strategy. The business case was built with these inputs in mind, with the result that the rebuild was done on time and on budget.
Trust and collaboration
Another part of having a culture fit for transformation is making sure that constructive working relationships among different stakeholder groups are facilitated. Trust and collaboration don't happen by accident, they happen by conscious design.
This step involves recognising that for the people being asked to transform, it can be a confusing time. There could suddenly be numerous people involved from core staff to technology partners, transformation partners, board members, government or regulatory representatives, shareholders and more. Who are all these people, why are they here, and what are they all doing?
One way KPMG helps organisations to manage this is through training designed to bring together everyone who has a role to play in the transformation. The workshops focus on ensuring everybody has a shared understanding of the transformation’s context and purpose. Conversations also explore where everyone comes from, their role, the experience they bring, and any lessons of transformation success.
While some organisations prefer to get straight to work, our view is that you have to go slow before you can go fast. The investment of time upfront could save hundreds of thousands, or even millions of dollars in delays caused by people being unclear or working relationships that are not solid.
Ready to change
If you have a culture that is transformation ready, you will have the people factor front of mind before starting the transformation, and built into the transformation. With everyone engaged, the whole transformation can happen in a far more efficient and effective way.