Organizational transformation is a sore spot for many businesses who resist change. When evolution is desperately needed, they dig their heels in and cling to inefficient systems and outdated technology. This weakens their competitive edge, slows their go-to-market opportunities, and can wreak havoc internally. The end result is that these organizations remain stagnant, which is further fueled by a lack of internal alignment and frustration amongst employees who are not empowered to make decisions.
But how can organizations swiftly respond to change and come out on top? What are the key ingredients for business transformation success? Martin Danoesas, a partner of the BCG financial institutions practice, explains in a TED Talk how change is needed in today’s workplace. The old-school-way organizations were built meant “thinkers” were at the top of the org chart, and “doers” at the bottom. That model doesn’t hold up in the era of technological adoption and disruption.
Danoesas says teams should be fast, flexible, and autonomous. Rather than having leaders acting as micro-managers barking orders on how and when to do something, they need to empower their teams. They need to trust their leadership to make great business decisions, by focusing on alignment and championing autonomy.
This is easier said than done for many organizations. The challenge is that a change in behavior is required for organizations that want to undergo a transformation. Danoesas gave the example of working with a bank that wanted to become simpler, more intuitive, and more relevant. The problem was the culture of the bank. Internally, it was common to attend multiple meetings with 20+ people, talking about things that needed to get done, but then passing them off from department to department. Danoesas says “Great Ideas? They end up in powerpoint parking lots.”
They said they wanted to change, but as Danoesas described: “Change is not only about embracing the new. It’s about giving up some of the old as well.” So he challenges us with: What are you willing to give up?
Case in point: One day at InterimExecs, we got a call from the CEO of a fast-growing tech company. They had quickly grown from 20 people in engineering to over 60. Growing pains led to disconnects between product and engineering departments. Managers were hesitant to make big changes. This resulted in an ongoing purgatory of a status quo that just wasn’t working. There was unbelievably slow progress being made in new product development and how the company reacted to market demand. The CEO knew that it was probably time to shake up the organization
We brought in an Interim CTO who immediately began implementing an agile methodology while creating autonomy between product and engineering departments.
Danoesas makes the case that departmental alignment enables autonomy, and autonomy makes organizations fast and flexible.
“Leaders have to make sure that everyone in the organization is aligned around the overall purpose — the why — and the overall priorities — the what,” he says. “But then they have to let go and trust their teams to make the right decisions on how to get there.”
Tony Evans, an expert Interim CEO based out of the United Kingdom, shared his experience taking a capital equipment manufacturer of food production kits through a transformation to change how teams were structured. The company’s goal was to move from simple volume depositors to bespoke food production lines — manufacturing specialty items such as chocolate eclairs or sandwich cookies.
The problem was that the same pool of employees was used for every single type of project so the company would be restricted in achieving profitability on variations of the product. Ultimately, Evans helped split the operations into three units, where teams were responsible for planning and scheduling their own work, yet were closely linked to finance, sales, and customer service. Customer responsiveness, project completion times, cost of production, engineering, and installation, and accuracy of project profitability vastly improved.
“Interim executives are the catalysts necessary for transformation,” Evans explained. “They have spent many years developing their skills bank and provide the environment for cultural change necessary to allow organizational agility to be matched to 21st-century market needs,” Evans says a big element of this is establishing ways of working that build delegated authority as the norm.
Like most interim executives, Evans enters an organization with the goal of taking a company through change and transformation. The ultimate goal is to get an organization to higher ground, where an interim executive then hands off the keys to internal leaders who have been nurtured and coached by the interim, or to a new executive who comes in on a permanent basis.
“When the interim leaves, the river of skills they have built within the business closes behind them and it continues on its journey, unencumbered,” Evans describes.