Embarking on a transformation program is an important step for a company seeking to better compete in today’s environment of disruptors and accelerated change. A successful transformation can reposition a struggling organisation as a major market competitor; it can also ensure that a top performing company remains at the top. However, successful delivery of transformation programs remains elusive; a Bain & Company survey last year revealed that only 12% of transformation programs had achieved their intended results.
Why is creating change so hard?
Whether the transformation program is defined by digital, cultural, or operational parameters, a few common themes emerge explaining the gap between programs started and successfully completed:
- Strategy Alignment. A sound transformation strategy may align with what the organisation needs but not fully address the organisation’s culture and/or daily activities.
- Speed to Benefits Realisation. Business environments are shifting faster than programs can be delivered. A JP Morgan report ‘Disrupt, or be disrupted’ (September 2017) compares corporate strategies with investment outlays to propose that business strategy is moving so quickly that investment outlays are not able to keep pace.
- Size of Initiatives. The focus of most transformation programs is on delivery of large objectives via dedicated project teams. These do not always have the most transformative impact; according to a 2017 McKinsey study, 50% of the total value of the value delivered during successful transformations came from smaller bite-sized initiatives. These smaller initiatives are easier and quicker to execute as they carry fewer layers of approval and require less coordination.
How can a company that recognises a need for transformation ensure a successful, sustainable program?
A successful transformation program focuses on three areas: Measuring the right things, delivering the right projects, and creating a culture of continuous improvement to build momentum and deliver millions of small wins.
The Lean Six Sigma methodology represents a means through which an organisation can ensure transformation is successful. When introduced with a culture of Continuous Improvement, the results can be sustained and used for further development.
Lean Six Sigma (LSS) is a business improvement methodology traditionally known for its ability to reduce process variation and removes waste in order to improve organisational performance. It is underpinned by a systematic method for understanding and resolving problems of any size, using the DMAIC approach (Define, Measure, Analyse, Improve, Control). Continuous Improvement (CI) is the ongoing effort of every employee to improve an organisation’s product and service offerings and processes. This can be done with small incremental improvements over a prolonged period of time. The LSS approach can successfully pinpoint the problems plaguing an organisation and identify solutions to begin a transformation. A good CI culture includes the implementation of appropriate habits which continue to help drive the organisation forward and create sustainability.
Define & Measure Your Transformation Program
The first stage of LSS is the Define phase. Change moves more quickly when the organisation starts from this first step: to define exactly what needs to be changed. Key stakeholders may discover that the company is falling behind in certain areas, or there is a new piece of innovation to be exploited. By starting from an understanding of the current state of the organisation, then deciding the right changes to make and how success will be measured, and finally choosing the best way to implement these changes, efforts can be focused on the changes that delivery the best combination of impact and speed.
Organisational transformation usually begins from a top-down approach, addressing strategic needs or opportunities and filtering across the entire organisation. Communication, therefore, becomes the most important aspect of successfully defining what success will look like when the transformation program is completed. Proper communication also aids in deciding which metrics need to be measured, so that the solution implementers know where their energy needs to be focused to achieve this vision.
Many organisations will try to begin this process on their own, discovering quickly that an experienced program manager can improve the speed and ease of this phase by leveraging and applying learnings from programs of change from other companies and often industries.
A successful transformation requires the effort of everyone within the organisation; by keeping the focus on the key success factors of leadership, people, measures and investment, problems can be averted and successes start to accumulate early in the program.
Analyse & Improve Your Transformation Program
Once an organisation has successfully defined the focus and identified the key measures of success and understands the point from which it is starting, the next step is to analyse these metrics and bring about the needed transformation. The transformation team may find that the output from certain processes is no longer sufficient for the requirements of the organisation. In addition, the current systems (both technology systems and process) in place may not be allowing employees to meet the requirements necessary for change to occur.
Understanding the root cause of these issues – not only that they exist, but why – and applying innovative solutions to maximise return on investment and employee satisfaction is the key to successfully transitioning this phase. Sometimes a system needs to be completely replaced (see this article from a Blue Crane advisor as an example of this); often advances in automation and robotics can address system problems while iterative solutions are applied remove constraints from processes. New skills are often introduced during this phase, enabling employees to adapt and be empowered to contribute to the process change through incremental improvements and appropriate measures of success.
The output from these changes to technology, process and skills can then be compared to the output before the transformation was started. This is the point at which continuous and iterative improvement begin to be introduced, allowing the improvements to be sustained and improved over time.
Control and Continuous Improvement
After improvements have been successfully implemented into an organisation then the next step is to maintain those new standards. This is achieved by create ‘controls’ which allow the organisation to understand what the new ways of working are, in terms of measures, process control, people development and customer experience.
Sustainability becomes a key concern here; continuous improvement is how sustainability is established. A continuous improvement culture allows transformation momentum to continue so that change is not lost (or goes off-course) and the gains of the transformation continue to grow. Continuous improvement focuses on incremental changes over a prolonged period of time, done at the individual or team level within the scope of their control. Once a continuous improvement culture is embedded, an organisation never stops looking for ways to better itself. In doing so, the radical changes implemented during the LSS process are tweaked on a regular basis to ensure their effectiveness; radical change becomes less necessary and innovation and growth become the focus for future major initiatives.
Our experience with organisations considering a transformation has been that this lean six sigma approach, combined with development and embedding of a continuous improvement culture, guarantees results.
Blue Crane Consulting Group are experts in combining Lean Six Sigma and Continuous Improvement Culture into successful transformation programs. Contact us to learn more about how we can build a sustainable operational excellence program for you.