How to manage internal and external expectations of change for successful business transformation
We’re used to the three big questions of strategy: Where are we now? Where are we going? and How will we get there? But often too little consideration is placed on another set: What, when and how are we going to tell people about it?
The start of a business transformation is an ideal opportunity to ensure perceptions of an organisation keeps pace with the change to come. The difficult choice for a leadership team is how much to say about what the future looks like, when tangible, wholesale improvement can be years away. Promising too much too soon risks a credibility gap; whilst failing to signal what’s next can squander the reputational rewards of early mover advantage. It’s particularly relevant for businesses reliant on their people to deliver customer experience. We see these concerns manifest in C-suite nervousness about publicising innovation strategy; in wariness of further disillusioning cynical, change-fatigued employees or in uncertainty about what’s truly impressive (versus expected) in customers’ eyes.
What’s useful at this stage is to think about a ‘transformation narrative’; a clear story which stitches together the hard rationale of business strategy with more human, emotive elements such as purpose, values and positioning. Crafted with a careful eye on the deeper motivations and frustrations of your most critical audiences, a transformation narrative will help make sense of an overarching strategic direction and its implications. It should signpost and set the pace for what external stakeholders should expect from your company in the coming years – and explain to colleagues what’s expected of them to make this change happen.
So what are the key considerations in managing and communicating this very human side of business transformation?
1. Set and stay the course
True transformation takes a while to work through an organisation and impact the outside world. So think years, not months, when planning its communication. This cannot be a ‘once and done’ campaign – indeed, a big fanfare followed by silence will only widen the credibility gap. Commitment needs to come from the top, with C-suite members aware that successful realisation of transformation is likely to extend beyond their tenure (and potentially their itch to talk about ‘new news’). It means repeating the same messages through the period of change and across geography and business units, as well as linking these to more enduring constants like purpose and values. With rare constancy at the core of its corporate story, IBM has used one core idea, THINK, since 1911 as a basis to explain its strategy to colleagues and clients (‘Smarter Planet’ and ‘Cognitive Business’ being the most recent global iterations on the core theme).
2. Be clear on who you’re transforming for
Many organisations are now guided by a purpose, which sets out the value they aim to create for a wider business or social community, beyond delivering profits to investors. Purpose is a useful base ingredient to inform a transformation narrative, but its expansiveness and timelessness will need to be distilled down to clarify who will benefit (and how) in this current phase of your organisation’s evolution. You should also identify any groups who may be unintentionally alienated. I worked with a consultancy whose CEO heralded their new ‘Digital’ business strategy at a shareholder event, with the promise this would both drive profitability and attractiveness to clients. But without clear articulation of what this meant for ‘business as usual’, there was widespread confusion and even disengagement amongst a workforce who felt they were now redundant, ‘analogue’ professionals who could add little value.
3. Set expectations of what’s to come
Give a sense of where you aim to end up – so that each new step in your transformation makes sense, even when you move outside of your original core business. This might mean a significant strategic refocus as with the recent metamorphosis of Statoil into Equinor (a ‘broad energy company’ rather than a petroleum provider). Or it could be using brand strategy to demonstrate a broadening of ambition – like WeCompany, which allows the business that started out as WeWork to move into fields like housing and education, with WeLive and WeGrow. Be comfortable with a degree of ambiguity here. The evolving nature of technological possibility is such that you may not know exactly what products and services you might offer in three or five years’ time. What you can do is establish your own frame of reference and ambition, so that take up of appropriate opportunities then doesn’t then feel out of corporate character.
4. Show your work
Credible transformation starts with small steps which are visible straight away. Make sure you can point to actions you’ve already taken and investments you are making now for the future. Rio Tinto was able to assert a leadership position as the most innovative mining company, because it could point to a ‘history of firsts’ it had pioneered for the category. You may want to look at a public development plan like Monzo’s, which gives a timeline for their forthcoming product launch pipeline. Beware the twitch impulse of pushing innovation for its own sake, though. New initiatives should be ruthlessly assessed for their relevance to your audiences and, if made visible externally, clearly named and positioned to support your overall story of change. Having a ‘lab’ or investing in start ups can be help signal intent, but initiatives that exist out of the bloodstream of the main business means there’s little visible evidence of change in daily reality. This was certainly the case for one giant global law firm, where an incubator venture for legal technologies generated significant press interest, but partners never talked about it with clients as they couldn’t explain its relevance. And thus the opportunity to generate reputational ‘return on investment’ went unrealised.
5. Set the right tone
As well as delivering tangible outcomes, you’ll need to create the right environment for perceptions of your business to shift. Thinking about how you look, feel and act like a progressive organisation is particularly relevant in the service sector, where relationships are critical and clients buy into a shared mindset and style of working. We find that evolving a brand’s visual and written style can trigger clients into reappraisal – particularly if they feel a business is trying to show they’re open and ready for a different sort of conversation with the outside world. It’s worthwhile gaining a nuanced understanding of how your target audiences see progress and transformation in your category (not just the practical changes they want, but the scale and flavour of attitudinal shift they seek in a desired partner). Having articulated your culture and how it’s changing, you can then be more explicit with colleagues about the behaviours required to foster the corresponding relevant client experience.
Determining how to signal change to your key audiences is a relatively small investment of time, as part of a bigger corporate strategy programme, but it’s critical to ensuring a successful outcome. Done well, communicating your strategic intent allows everyone to suspend disbelief to some extent whilst transformation is underway. It motivates employees and focuses their efforts in the right place, whilst minimising reputational risk arising from customers’ confusion about what is happening and what it means for them. Ultimately, it’s about closing the gap between aspiration and reality: ensuring that the ‘irrational’ human perceptions and behaviours of those your strategy will most directly affect are designed into the process of transformation, rather than becoming an unexpected blockage to its credibility and your company’s growth.