Organizational Transfusion, not Transformation
Is ‘organizational transformation’ a cover, allowing companies to change as little as possible?
The idea of ‘organizational transformation’ is almost impossible to escape, although I’d like to be able to.
At a superficial level, organizational transformation is motivated by sensible — even aspirational — goals. The world of business is changing in many foundational ways (the story goes), such as the rise of the mobile consumer (and their counterpart in the enterprise), ubiquitous cloud computing, the on-demand economy, AI and algorithms, conversational UX, and a dozen or so other breaking trends. The business may not be able to slowly evolve to these new realities (the story continues), and so a wholesale revolution may be necessary (no, no, *is* necessary, the story generally concludes). That transformation is an existential imperative (we are told, time and time again).
What we often see after that hand wave is not transformation, but a transfusion of a small set of not-particularly-revolutionary ideas into the existing system, based on the implicit strategy of changing the business as little as possible.
Ok, that’s good so far as it goes, I guess. But what comes next is the prescription for change proposed by the author of Today’s Special. And those can vary widely in what they suggest as the medicine needed to effect this miraculous change, often prefaced by smooth, new age-y quotations, like ‘A butterfly is a transformation, not a better caterpillar’.
But what we often see after that hand wave is not transformation, but a transfusion of a small set of not-particularly-revolutionary ideas into the existing system, based on the implicit strategy of changing the business as little as possible.
Consider this recent piece by McKinsey, entitled The people power of transformations. It seems that despite the help of organizations like McKinsey, organizations are no better today at ‘overhauling their performance and operational health’ than ten years ago. Why? The authors explain:
Transformations have their truisms. Successful ones, for example, require visibly engaged C-suite leaders who communicate clearly about the changes at hand. A vast majority of all respondents report these characteristics at their companies, whether or not their transformations have worked. But the results suggest that while C-level support is necessary, it is not by itself sufficient. A transformation’s success also requires that people across the organization have a specific role to play and that everyone knows how to carry out his or her part.
Our survey asked about seven specific roles and the actions that employees in these roles take during a transformation. For each one, and most notably for roles at lower levels of the organization, respondents at companies with the most successful transformations report overall greater degrees of involvement. Respondents at these companies also are likelier to report other practices that set their transformations apart: consistent communication around the changes being made, especially to those on the front line; clear definitions of roles and responsibilities; and a strategic approach to talent management. In contrast, responses suggest that without employees at all levels having a stake in the outcome, the transformation might well be doomed. Among respondents whose companies’ transformations failed to engage line managers and frontline employees, only 3 percent report success, compared with success rates of 26 and 28 percent, respectively, when each of these groups is engaged.
Here we are in 2017, presumably interested in organizational transformation, but the subtext in this study and the way the business is described demonstrates we might as well be in 1950. We’re stuck with the up/down orientation of the firm: note that the involvement of ‘roles at lower levels of the organization’ are needed for success, as well as the leadership from ‘the C-Suite’.
The dense and unyielding stratigraphy of the late industrial hierarchic business is embodied in every part of this study. Look at this chart:
The chart defines a caste system, for all intents and purposes. C-level leaders, who initiate initiatives they’ve deputized next-tier managers to operate, and those in turn indoctrinate and motivate line managers to meet transformation goals by the engagement of frontline employees.
There’s little room in this worldview for those ‘at lower levels’ to own transformation in their personal work. Or even line managers.
But this Organization Transfusion mindset has little capacity for self-reflection, because its bedrock premises can’t be questioned. Even when reporting on the failure to engage ‘the front line’, the primacy of up/down thinking isn’t never questioned:
Not surprisingly, involving the front line is even more challenging at larger companies, where the rate of transformation success is also lower. Just 45 percent of respondents at larger firms, compared with 58 percent at smaller firms, say frontline employees are visibly engaged in transformations. The same is true of line managers: respondents at bigger companies are less likely than their smaller-company peers to say their line managers — who oversee frontline work and whose activities are directly affected by transformation initiatives — are engaged in the effort.
It’s not surprising, then, that these groups are the least likely to view their companies’ transformations as successful. Yet their involvement and perspective could not be more critical: among transformations that fail to engage either line managers or frontline employees, only 3 percent of respondents report success.
They go on to discuss what might make a difference — better communication, clarification of a vision, clear roles — but it’s all business as usual. Transforming the company at the DNA level is never ever broached, and all we see is transfusing the aging up/down system with an IV bag of superficially new digital, mobile, and marketing approaches.
My bet is ten years in the future McKinsey will write another article using the then-contemporary new take on Organizational Transformation, reporting that only 5% of companies surveyed have had successful transformation projects since 2017, but that better communications, involvement of the C-Suite, and engagement at lower levels of the company are likely to lead to more success. And don’t worry, you won’t have to really transform the organization for your Organizational Transformation. Here, let me slide this needle into that vein.