Why People Can Make or Break a Business Transformation

Leaders often face the dilemma of driving change, such as entering a new market or pursuing an acquisition, while managing the risks involved. Transformations in business can lead to a host of challenges, including employee resistance, attrition and reduced productivity as employees get to grips with the new direction. I’ve seen it myself in making decisions for Tiger Recruitment – not everyone can visualise the long-term reward when change first comes onto the agenda, even if the CEO and senior leadership team can see the positives on the horizon.

People will always be fearful of change. PwC’s 2024 Hopes and Fears Survey found that 53% of workers globally, feel there is too much change happening all at once, and 44% are happy with the way things are at their place of employment, and there is no need for more upheaval. We can hardly blame them – the pandemic brought a sudden pivot in working practices that no one was expecting, artificial intelligence threatens to dramatically alter jobs, and economic instability means job security is not as guaranteed as it once was. PwC’s survey paints a picture of CEOs who are urgently trying to evolve their companies to remain competitive in the long term, and workers who are caught between present-day pressures and an uncertain future.

With this in mind, it helps to show your people the opportunities that a business transformation might afford them. This could be the chance to work in a new city or location, a way to build their skills to progress in their career, or ultimately a financial reward from increased profitability and new sources of revenue. Bear in mind though that people have different risk appetites and profiles – some can be comforted through better lines of communication, while others like to know that they have an input into the decisions being made on their behalf. It’s important to get a feel for the cadence of communication that will work during a big change, and how much teams will be able to process while still remaining engaged with the business.

That said, getting everyone involved from the outset takes up a lot of energy, attention and resources. Although most employees now accept that change is a new constant, ‘the more the merrier’ isn’t necessarily true for who you choose to come on board to drive the transformation process. But keeping that team too small could also backfire, according to research published in McKinsey, which found that transformations involving at least 7% of employees are twice as likely to give a positive return to shareholders than those with smaller change teams. Typically, organisations only involve just 2% on average, so this group is larger than you might think.

It’s important to build a robust team that will champion change made up of a diverse range of employees – the visionaries who are happy to take risks but also people who will challenge the decisions you make. Brave colleagues who are able to ask tough questions such as ‘how will this work?’, ‘will we lose people if we do this?’ are worth their weight in gold during a transformation, as the implications of major change are often complex and wide-ranging. Accept that you will make some mistakes or missteps along the way, too, and be prepared to change direction or at least take your foot off the accelerator. I made one decision about opening in a new market that required a pause, but once I had done that the new venture returned to profit. CEOs who push blindly through when the red flags appear can get into a lot of trouble, losing key people along the way and ending up in a worse position than when they started.

How you communicate is also crucial to the success of a transformation. Employees expect you to be transparent about what is happening, but there will be times when it’s not appropriate to share every single detail of a business transaction or product launch. On the one hand, it’s important to sell things to people internally, but on the other, it pays to have a sixth sense about what to share and when. Shareholders may need to know about certain decisions before employees, for example, but putting just enough information out there can help garner crucial feedback on improvements that can be made. If people feel like they have had input into a major decision, it can feel like they are bought into its success, rather than a sense that they are having something done ‘to’ them, which engenders disengagement.

There’s no denying that business transformation can feel scary, but with the right approach, it doesn’t have to. Building a team of change champions, taking feedback on board and communicating transparently will all feed into a successful change.

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