Why do I need to “Transform” my organization?

Are strange forces at work driving change in your organization?

Why do I need to transform the organization? Wouldn’t a little tweak here or change there be good enough? I like to use the term organizational transformation because I think it more clearly portrays the shift in thinking and execution required to effect real change within an organization. The pace of change within an organization and outside of it is driving the need for more comprehensive shifts in business processes, technology, and resource allocation in order to meet changing requirements; all the while maintaining efficiency and effectiveness. It is this combination of an increasing change of pace, as well as the need to be able to respond to this change more rapidly and efficiently that is driving the need for organizations to have organizational transformation as a key capability. The logic is simple. If the pace of change is increasing, then high performing organizations should be good at managing the change that is required to execute.

As you scan your organization today you may see the results of poorly executed change. In fact, one of the biggest drivers of cost in your IT department may be the accumulation of one-off solutions needed to meet individual requirements.

One Example Driving the Need for Organizational Transformation (OT)

Over the years, one need after another has driven the piece meal assembly of policies, processes, and technology without anybody really thinking about the big picture or what the addition of that one more thing means for the organization as a whole. The proliferation of business applications in many organizations, in order to meet specific needs like customer relationship management (CRM), enterprise planning, and business unit specific applications, have created a complex mess in many organizations. The implications of this mess ripple across the organization. This starts with the business users who struggle with overly complex procedures that require the entry of information into many different applications that all have different looks and feels, etc. In addition, these silo applications each hold some portion of the critical information necessary to running the business and making decisions. More costs have probably been accrued in attempting to stich together this information from various applications. In the end you have the complex, costly to support, and poor performing mesh that is inflexible, difficult to maintain, and is ripe with opportunities for technical, security, and other risks due to the lack of planning, execution and management.

So why do I need to have a capability to support organizational transformation? The organizational transformation capability affects every aspect of your business. I’ve provided some examples below:

Setting Strategy becomes difficult because there is a lack of clarity with regard to whether or not shifts are attainable, what the costs of the shift will be, and what the scope of the change management effort will entail.

Managing External Influences becomes reactionary, as the organization is rarely able to devise holistic responses to external challenges because there is little cross-functional understanding within the organization.

Performance Management becomes problematic because the linkage between metrics and the organizational components driving those values becomes harder to discern. If the inter-relationships between processes, technology, and value aren’t clear in the beginning, they certainly don’t get clearer over time and through change.

Human resource management becomes more complex and more expensive as the need to maintain many sets of specialized skillsets drives up the cost to maintain and support myriad applications.

Vendor management becomes more complex as you are forced to maintain more individual relationships, contracts, and service level agreements as part of a piece meal approach to change.

Technology management becomes difficult, as the interwoven and intertwined mesh of technologies all require upkeep on distinct schedules, pose their own security risks, and procurement issues.

Security management is inherently more complex as technologies proliferate, business processes lack clarity; governance is hoped for but not embedded. (See embedded governance post).

Risk Management is almost impossible as the value chain that is used to deliver end stakeholder value looks more like a bucket-o-stuff than a well thought out solution. This complex mess may have numerous risks that never become apparent until it is too late.

Conclusion

You need an organizational transformation capability because it allows you to change your organization while maintaining insight from the as-is through the desired to-be. It will enable you to know whether the strategy you want to implement is possible, in what time frame, and at what cost. Without this level of insight you are managing by looking in the review mirror. You are hoping that your estimates regarding the future are correct because of experiences you’ve had in the past and gut feelings based on managerial experience. I’m not downplaying this insight. I know that I have made many decisions without perfect information because they simply had to be made, I have also spent many nights worrying about the implications of things I didn’t know on the outcomes of the decisions I’ve made. For companies that exist in highly competitive environments and with the budgets shrinking in the public sector, there simply is not room anymore for the type of seat of the pants executive navigation that was once possible. Margins for error have shrunk with smaller budgets and narrower margins. Businesses that are able to understand the components of their organization that are critical to change develop a successful organizational transformation methodology. They can then integrate that process and information into their strategies and execution, and those are the organizations that are going to be tomorrow’s high performing organizations. I’d love to hear from you regarding your thoughts on managing organizational change. I will write soon on what I believe are critical areas of insight but I’d be very curious to hear what you feel is critical.