Implementing Transformational Change through a Line of Sight.
By Kevin Dwyer
Saturday, 19th May 2012
Implementing a strategic vision does not have a high success rate, surveys by McKinsey have revealed over many years that the success rate rarely exceeds forty percent.1

Kotter published his findings in 1995 showing transformation success rates at only 30%. Other studies confirm that over twenty years, transformational change enjoys success rates of approximately 30-40%.

And yet, this is a period where transformational change as a topic has received much attention, with many new models for change postulated, with seemingly little difference made to the actual success rate over that time. The question that goes begging therefore is: why? Why has the high level of thinking by some of the better thinkers available not translated to an improvement in the results of transformational change?

Without wanting to postulate yet another theory of managing change, it is evident to us through experience that there is many a slip twixt cup and lip, as the proverb goes, in executing transformational change. We are clear advocates for creating the right environment for change rather than slavishly following a model. One of the ‘environmental factors' we often find missing at an executive level is a clear line of sight between the top-down vision of what the changed organisation looks and feels like, and the personal responsibility of the employee.

A line of sight

Figure One demonstrates what I mean. We start with a corporate view of the world and create a line of sight from the corporate view to the personal view needed to drive personal adoption. Whilst we have applied labels to each of these sections of the line of sight, the labels themselves are unimportant; it is their attributed value or meaning which is important. So when reading this article concentrate on the meaning we attach to the words rather than any values you attribute to them.

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Figure 1 - Line of Sight from Vision to Individual Adoption.

Where we are going?

The starting point of understanding the line of sight between what you want to achieve out of a transformational change is what we call a Vision. When we say ‘Vision', we mean some words that can describe in present tense what this organisation is like after the transformational change. We do not mean an endless paragraph word-smithed until it becomes devoid of meaning. To learn more about what we mean by the term ‘Vision', click here.

Often we find this is the first hurdle that organisations fall at: they cannot clearly express their vision. One potential client wanted to "Make people more proactive to government changes impacting the vocational education sector." When asked for examples in behaviour that would change when going from reactive to proactive he struggled to articulate what the changes were.

Another client had a vision "to be the leading provider of customer focused credit solutions". This had obviously been word-smithed over a long period of time to get the maximum combination of objectives into as few words as possible, which is the end result I see from most "Vision workshops". When challenged to state who "a credit customer" was, the senior management team could not agree on a definition. When asked what a credit solution was they similarly could not agree. Asking how they measured the word ‘leading' brought a similar outcome.

One can have the most formidable coalition of the willing behind a transformational change but when you cannot define the end result, failure beckons.

We define Mission as the ‘how' of getting to the Vision. It is the high-level view of where we will focus our attention to achieve our vision. It is a precursor to Strategy.

One client has a Vision which, in part, sees them as the largest supplier of their goods and services in their geographical region, and having expanded geographically and vertically, and to have returned profits in excess of that necessary to fund operations and their strategy to their customers by way of lower prices.

The company is small and as such started their Mission Statement with a commitment to ‘train our people to be the best at what they do in the region'. Also, in part, their Mission Statement committed them on their planning windows, their attention to Health, Safety and Environment and, because of their dispersed operations, a commitment to use technology to reduce operating costs and reduce risk. They were also clear that "We will research any market we enter into and our preferred mode of entry into markets for which there is a gap in our capability is by partnership".

By the time they had completed their Vision and Mission Statements they were clear on what the organisation looked like after their transformational change and the major levers they were going to use to get there.

In instances where an organisation's Vision and Mission Statement are little more than a collection of meaningless platitudes and motherhood statements about excellence and teamwork, it is very difficult to manage risk and frame a strategy that is coherent and congruent with the Vision. The boundaries of what we will and will not do to achieve our vision need to be set.

Corporate Governance
Corporate Governance is 'the system by which companies are directed and controlled'2. Of importance to us when it comes to creating the line of sight between the Vision and personal adoption are three elements of Corporate Governance:

1. The division of responsibilities between the board and the management team in the implementation of the transformational change.
2. Policies which must be reviewed or developed to frame the boundaries of the transformational change and its implementation.
3. The risk management system and its parameters, which are necessary to manage the boundaries of the transformational change and its implementation.

We too often find in transformational change that even if the board and the management team are on the same page when it comes to the Vision and Mission, that confusion exists about who is responsible for what. Overreaching by the management team and interference by the board are, in our experience, common elements of a derailed transformational change.

Sometimes we see this confusion over roles pushed down all through the line of management. The resultant internal discussions focus on individual positions with regard to actions being taken rather than the interest of the organisation in actually promulgating the change, and end up becoming bunfights instead of meaningful discussions.

Major changes in the culture, organisation structure, strategy and key performance measures which often accompany transformational change will almost always push against existing policies and high level processes. Those policies and high level processes must, therefore, be reviewed to determine if they are congruent with the stated Vision and Mission associated with the change. Policy areas which usually need revision include but are not limited to:

  • Recruitment
  • Performance management
  • Succession planning
  • Authorities and delegation
  • Customer interaction
  • Risk management
The existing risk management system will face major challenges to its capacity to constrain risk in organisations facing transformational change. The challenges come from two areas:

1.The acceptance of and reaction to external and internal pressures which may change the vision and mission of the organisation thereby changing the context in which risk is measured and the level of risk considered acceptable. To learn more about the context of risk, click here.
2.The introduction of one-off project-based risk events that originate from activities required to implement the transformational change. For example, communication activities during transformational change create a large range of risk events.

How are we going to get there?

If we create Vision, Mission and Governance structures for our transformational change, we have by then at least constructed a platform for where we are going, with a high level view of what we need to construct to get there. What is needed next to continue the line of sight is the development of Strategy. The formulation of a Strategy, for us, must involve a choice between two or more good things; choosing between ‘what we're doing now' and some nebulous ‘other' option is not formulating strategy. Neither is a choice between one good idea and a lot of bad ones.

What we often see at this stage of implementing transformational change is insufficient thinking about the alternative ways to reach the vision within the boundaries set by the mission and the governance structures. Too much energy is focused on a favoured way of a business unit or an individual, or a pre-existing way of doing business, instead of developing real alternatives which have pros and cons to be analysed and evaluated against the risk context agreed for the change. This lack of innovative thinking often leaves organisations with no alternatives when the expectations of the favoured way are not met due to unforeseen circumstances or unintended consequences.

A further issue in developing Strategy that breaks the link between vision and personal adoption is the failure to get engagement in the development and implementation of the Strategy. To learn more about getting engagement in implementing Strategy, click here.

Key Result Areas
Breaking down Strategy into the Key Result Areas (KRAs) is where the crossover from corporate view to individual view is made. KRAs can be set at a high level and cascaded down to the level of individual roles. At the high level, KRAs reflect both the Strategy and Mission and embody the boundaries imposed by the risk management system.

For example, one client included the following in their Mission Statement:
  • We will train our people to be the best at what they do in the region.
  • Employees proactively use technology and their personal skills and knowledge to reduce supply and operating unit costs for customers.
  • Employees want to work for us because of the development opportunities it provides.
  • Customers buying from us always receive polite, friendly service.
It is self-evident that a high level KRA for this business is about Managing People.

We often see transformational change break down at this juncture. There is no link provided between Strategy and what people should be concerned about. When that occurs what tends to happen is that the drive for change meets the inertia of the existing focus of the organisation. Little change occurs as informal and formal views of what is presently important conflict with what is important for the change to occur.

When I was in a role as Marketing Manager for Shell, we wanted to improve profitability dramatically and had several good strategies to do so. What was necessary, though, was to change the focus from sales volume and gross margin to profit. The KRA had to change from sales to profit. Without that change, we would not have been successful, despite the good strategies.

At the role level, KRAs are cascaded down from the high level KRAs to enable people in specific roles to understand how they contribute to delivering the vision. To learn more about Key Result Areas at the level of organisational roles, click here.

Process and Procedure
KRAs may be cascaded down to roles informally in one-on-one sessions with individuals or may be put on a formal footing by spelling out clearly the processes and procedures to be followed with the KRA. The advantage of cascading the KRAs formally is threefold:

1. Consistency of the intent and method to be followed within a KRA is easier to achieve between different people undertaking the same role.
2. Key Performance Indicators are easier to define and set when a process and/or procedure is formally documented, so measurement of what works and does not work can drive continuous improvement and manage personal performance.
3. Training of people is much easier and more effective when there is a consistent base from which to build learning outcomes.

By this stage, a large majority of organisations undergoing a transformational change have broken the link between Vision and Individual Adoption. They break it either by ignoring the need to reframe the Vision, Mission and Strategy into Policy, Process and Procedure, or by writing such turgid processes and procedures that no one can understand them, let alone follow them.

Processes and procedures should be considered as part of a collection of learning collateral more than as a part of a Governance structure. It is our experience that processes and procedures written with Governance as the prime aim generally have a low success rate at transferring the learning necessary to implement the process or procedure back to the workplace.

Who is going to help us?

If you're reading this and thinking it feels like a really big effort is required to implement transformational change, then I'm sorry, but the job just got bigger. We now have to enlist the help of our people to actually implement the changes. People will only implement change at the individual level3 if they:
  • believe the change will be good for them and better than other options they consider good for them at the time; and
  • believe that the change is the subjective norm—that is, there is perceived social pressure to engage in the changed behaviours required to implement the change; and
  • perceive they have the ability to perform a given behaviour; and
  • have the actual level of control required—authority and availability of data to make decisions all form part of the actual level of control
Building learning, performance management and communication strategies that reinforce each other maximising the transference of learning back to the workplace is what is needed here. Training and change management plans and tools must be integrated into a whole congruent programme. Our observations are that this is often beyond most organisations as the Learning and Development and Project Management—or in some cases, Change Management—departments do not share the same perspective on what is required to make the change happen. When that difference remains unchallenged and unresolved, the impact on people's behaviours is lessened dramatically.

For example, one client undertaking an Electronic Document and Records Management system rollout had a change in project manager when the project was about seventy percent complete. This change resulted indirectly in a change in the way the concept of a Business Classification System (BCS) was taught: the training experience went from experiential learning to a lecture, making it difficult for learners to perceive they could work with the BCS, as they no longer had the same level of comfort in understanding what a BCS actually was. The subsequent training on how to use the BCS then had to make up for the shortfall in understanding the concept.

Training individuals in new processes and procedures, or in new skills, is adequate to provide them with the perception that they have the ability to complete the processes and procedures required to help implement the transformational change, but it does not, in and of itself, provide the organisation (or the individuals being trained) with any confidence that the learning from the training is being transferred to the workplace.

The training itself should use formative assessments to enhance the learning. Formative assessments are those that are conducted during the learning to enable the teacher to see how well students understand and remember the information being imparted, and are primarily useful in assisting teachers with adapting the training material to suit the learners.

Summative assessments—those conducted at the end of the training process to assess the transfer of learning—should also be used to ensure that people have learned what the training set out to teach them. Transformational change is not a short journey and training design needs to continuously improve to ensure that the design is effective.

Making changes to processes and procedures without checking whether the training is effectively embedding the changes in the way people work is a recipe for something we see often with processes and procedures which are three years or more old. That is the formal process written down has no resemblance to the informal processes and procedure workarounds that actually occur in the business.

In our view, summative assessments should test for:
  • knowledge of the process or procedure by means of a quiz; and
  • application of the process or procedure at the workplace by way of a checklist of observed actions and behaviours repeated a set number of times.
Quiz-style summative assessments allow us to establish a degree of certainty at Kirkpatrick's Second Level of Training Evaluation: the increase in knowledge or capability of the student that occurs as a result of the training. Observational checklists go a long way to establishing certainty at the Third Level: the extent to which that transferred knowledge is then implemented in terms of improved behaviours or capability improvements on the job.

Many organisations do not use formative assessments in their training and even more refrain from using summative assessments to their detriment in day-to-day business operations and to their peril during transformational change.

Competence Development
Training, assessments and actions back in the workplace to further develop skills and knowledge should form part of a competence development framework where the following items are clearly identified for each role within the organisation:
  • The KRAs, processes and procedures that apply to the role.
  • The accompanying cascaded Key Performance Indicators for the role.
  • The competencies required to execute the role.
This is the last leg in drilling down from the Vision to what is required in terms of human resources to achieve the Vision. It provides people with:
  • an indication that the change will be good for them by identifying where they can improve;
  • a platform from which social pressure to be competent can grow; and
  • a perception that they have the capability to change their behaviours and an indication that it is important to actually have the capability.
Personal Rewards

The issue of personal rewards is the subject of much discourse in the literature. In our experience, monetary rewards are short-lived as an incentive unless they are tied to increasing competence and career opportunities. It is our view that increasing competence that is essential to reach the Vision—if it is to be rewarded monetarily—should be rewarded by increased gross pay. We have seen this work in roles as diverse as research scientists and truck drivers.

The use of bonuses for performance—unless strictly tied to the individual's impact within a team on a few key performance indicators—can have a negative impact over time. This is difficult to do even in the world of Sales. Bonuses linked generally to organisational performance become a ritual and routine and when the general performance does not live up to expectation because of a negative change in the external environment, people are disappointed, and those who have adjusted their living patterns to rely on receiving a bonus suffer real pain.

Non-monetary rewards, in general, have better long lasting outcomes. Rewards which target career and personal development go beyond the hygiene factors as described by Herzberg and impact the motivational factors.

Most organisations have a rewards and recognition scheme. It is necessary when undergoing transformational change to link that rewards and recognition scheme to the Vision and Mission in a granular way to individuals.

Individual Adoption

Aside from the training aspects already mentioned it is important to create the performance management environment that reinforces the precursors to individual adoption. That includes both the formal processes and development of KPIs, and the informal processes which supervisors and managers carry out in their day-to-day management and coaching of people.

It is advisable in most instances of transformational change to include a learning pathway for supervisors and managers to improve their coaching skills. In most organisations we observe that these skills are poor. The problem is that the informal processes adopted by managers and supervisors are often at odds with the intent of the change.

Given that one-up managers have closer relationships with people than two-up and three-up managers, they have much greater influence over the authority people perceive they have to make the changes in behaviour that are required to implement the Vision. Managers and supervisors also have a great influence over who goes to training when and the level of effort put into transferring the learning back to the workplace.

Personal Leadership

Lastly but by no means least, individuals need to show personal leadership to make the changes necessary in their behaviour to implement a transformational change Vision.

Creating a learning environment where people are able to evaluate their capability to actually change their behaviour in a non-threatening environment, and develop personal development plans supported by their business unit and the wider organisation, in our observation, takes some pressure off managers and supervisors up the line who themselves are having to change their behaviours.

The learning environment may consist of but not be limited to:
  • An organisation-wide workshop where all people are given equal training to help them develop a personal development plan that will help ensure the strategies are implemented to reach the vision in line with the mission and within the boundaries set by corporate governance structures.
  • Frequent mini-training opportunities e.g. toolbox meetings to emphasise a particular policy, process or procedure.
  • Skill development programs to improve assertiveness skills, problem definition skills, communication channel selection and use skills team work skills etc..
  • Performance management training for managers and supervisors.
  • Coaching skills.
  • Feedback sessions on progress of the transformational change.
  • Training on the use of Key Performance Indicators.
  • Training on how to map processes and write procedures.

Implementing change is difficult; the statistics tell us so. There are many good models about that show the environment required for creating a desire to change across a broad enough spectrum of the organisation to have critical mass.

We argue that in addition to having that environment, a line of sight between the vision of the transformed organisation and personal adoption is necessary to drive change that lasts through the organisation.

Unfortunately it is not a simple task and requires skill and knowledge to carry out effectively. We can help to ensure that you are making the right connections at each juncture and create the documentation, performance and learning environments necessary. Change Factory can help you create your line of sight in detail, making change easy.


1 - For example, see "Organizing for successful change management: A McKinsey Global Survey," July 2006; and "Creating organizational transformations: McKinsey Global Survey Results," mckinseyquarterly.com, August 2008
2 - Cadbury Committee report on Corporate Governance viewed 05/08/2012 www.ecgi.org/codes/documents/hampel23.pdf
3 - Viewed 05/08/2012 Theory of planned behaviour http://people.umass.edu/aizen/tpb.html

Contact Kevin by email at kevin.dwyer@changefactory.com.au or via phone on +61 (0)408 508 490

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