When savvy financial marketers ponder “What’s next?” transformation very likely comes top of mind as a path to the answer. Transformation could encompass a host of goals: to become more “customer centric,” “digitally led,” implement “agile marketing”—or take on some other equally ambitious organizational change.
But here’s the bad news: Statistics show that your business will very likely fail to realize any of these aims. Many studies on this topic—including a research study that Merkle recently completed—bear this out. The findings reveal that 70 percent of complex, large-scale transformation initiatives fall short. The reality paradigm for business change is as follows:
The failure waterfall
Too often, “success and failure” translate to “all or nothing.” In truth, nursing an idea into reality means risk at every stage, starting with ideate. This covers “big idea” initiatives that roar out the gate with fanfare but never make it past the visioning stage. Because transformation initiatives tend to be ambitious and complicated, here we see the steepest drop off as companies retreat from potential longer-term gains to pursue safer, more tactical projects that often drive smaller-but-predictable impact.
With the build phase, the worst-case scenario yields a project that’s never launched. Failure in this stage more often stems from budgets and timelines that spiral out of control and/or the original scope being radically reduced. Of course, unusual exceptions occur when a significant business crisis demands dramatic budget cuts or leadership changes reprioritize initiatives and investments.
But the most disheartening results come from initiatives that beat the odds, make it to launch and die in the sustain phase. That is, the program never takes hold and is ultimately abandoned. These initiatives serve as toxic “remember when’s”—examples of when time, resources and money returned nothing on the investment. Unfortunately, and especially with more conservative organizations such as financial institutions, these failures morph into cautionary tales against the pursuit of change.
Given the telltale signs of failure in the making, here’s what it takes to successfully lead your company through transformation.
The leadership linchpin: Transformation success translated
In our study of transformation, we have asked companies to list the most common reasons why they believe an initiative failed. The most commonly cited include: a too-ambitious scope, inability to secure funding, lack of organizational buy-in or a shortage of available resources.
However, those disparate reasons point to one common underlying malady. When we examined the root causes, one common theme emerged: a failure in leadership. An effective leader minimizes the chances of failure when:
- He or she creates a compelling vision and plan
- Sells the value of the initiative
- Drives alignment among peers and superiors, and
- Resets the organization’s priorities to support the transformation.
Authoritarian, coach, diplomat: A role for every stage
A leader’s must-have characteristics in times of change include passion, persuasiveness and dedication. However, we have also learned that different leadership styles better suit different stages of a project.
During the ideate phase, it’s about driving a unified vision while generating organizational alignment and support of the transformation initiative. Change is difficult and risky—while doing the same comfortable thing each day is not. Established organizations have a natural bias to maintain the status quo and resist change. Thus in most cases of a transformation, participation cannot be a choice. It demands a mandate.
Here, a more authoritarian style wields the most impact.
Throughout the build phase, leaders need to remove barriers and secure a top-performing team. The team members who perform best in a “business as usual” environment, however, may not prove well suited to a transformation initiative. You will need creative thinkers comfortable with working outside today’s rules and boundaries. A leader needs to stay involved yet not micromanage, help problem solve and motivate the team.
In this phase, the effective leader behaves as a coach.
During the sustain phase, it’s critical to keep the momentum going. Where l preservation of the status quo by the organization fuels the opposing force in the ideate phase, here the individual’s bias against change resists adoption of the new initiative. Beware the temptation to revert to old roles and routines. Such a quiet and gradual shift will mask the impending death of a project at this stage until it’s too late.
In this final stage, an active, visible leader who champions the change project to the end serves as a diplomat.
Putting it all together: Change projects, same blueprint
Transformation requires a skillful leader attuned to team and organization needs at every stage—and adapts his or her leadership style accordingly. The good news is that there is a finish line. You’ll know you’ve succeeded when the change initiative blossoms into the “new normal” of how you do business.
That’s when it’s time to take on the next big thing.
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Margie Chiu is senior vice president, customer strategy at Merkle and leads Merkle’s consulting practice, where she advises senior level executives in developing omnichannel business and marketing strategy.