Business Change – Paying lip service?

Leaders and sponsors need to be seen and committed to business change or transformation. If they’re not, then any transformation effort will fail.

Unfortunately, many companies get only lip service from leaders rather than long-term commitment to change. Typically businesses build strategic plans that highlights the need for a digital transformation.  Unfortunately this is not fleshed out on what this entails.  

Transformation is usually a long process and one that takes commitment and dedication.  

Pushback from managers and employees trying to maintain the status quo can be the norm.

The status quo – the existing business model or operating model and efforts to sustain it – represents the most formidable obstacle in your company’s path to digital transformation.

The status quo locks people into their current behaviours and prevents them from moving quickly and acting on change. It’s a web of constraints known as “the way things are done around here,” which reinforces behaviors. A host of factors, such as organizational philosophies and policies and individual incentives, complicate that web.

What causes leaders to just talk of change, rather than committing to change?

Usually transformation is a multi-year journey and many details are unknown at the outset.

Any transformation initiative starts with a strategic intent based on a vision of the desired performance – a sense of where the company is heading in creating new value for customers and ecosystem partners and creating new competitive positioning.

Part of the problem that leads to leaders’ lip service is that any transformation, and particularly a digital transformation is unknown at the outset. You will know the direction your company wants to head, yet not know precisely where it will land, how long it will take to get there, how much it will cost, or what resources the journey will require.

Therefore, it’s not unusual for leaders to have different reasons for “agreeing” to the change but different visions of the end state. The reality is they commit to what they think the future will be, based on their own experience.

How can you recognise leaders that are paying lip service instead of real commitment to change?

You can recognise leaders that are paying lip service instead of real commitment to change as the journey progresses. Basically, they slow down progress or are merely compliant instead of engaged. Typical lip-service behaviors include:

  • Talking about the problems the company will face or saying that taking action will be too risky or too expensive.
  • Asking, “Can’t I do it just a little differently?” or “Can we just make this adjustment?” (to something more comfortable to the individual).

Should the direction be changed?

Making small tradeoffs to placate a senior leader is a big mistake. Bowing to the individual’s demands will cause the initiative to veer off-course and likely will sub-optimize the intended outcome.

Beliefs at the heart of resistance and lip service are based on human emotions. Some of the biggest motivating beliefs are:

  • Fear. Uncertainty breeds fear, and the unknown details at the outset of a digital transformation journey cause some people to cling to the familiar instead of being willing to change.
  • Risk of loss. The “what’s in it for me” principle is at work here, as some executives may stand to benefit from the change, but others may stand to lose. Similarly, some employees will lose their jobs when the company automates processes.
  • Past orientation. Some executives do not want to commit to the necessary operating model change because they believe the company’s current model and value delivered will continue to be successful. Others may believe the change isn’t necessary because they’ve seen disruption in the past and some companies weathered it just fine. They lack a future-orientation perspective and don’t recognize the existential threat to the business today.

How to get real commitment instead of lip service

The best approach to getting leaders’ and stakeholders’ long-term commitment is to go slowly at first. Spend time at the beginning building belief and long-term commitment to the strategic intent at all levels of the organization. Before your company makes major investments in technology and starts adjusting your company’s structure and ecosystem, it’s important to ensure that managers and employees at every level in the organization:

  • Understand and buy into why the change is necessary
  • Understand the benefits of the change
  • Understand that the change is possible to achieve and how it will be achieved
  • Accept personal ownership for the change

Spending time up front to build belief in the necessary change will alter their mindset from “Here’s why we can’t do that” to “Here’s how we can do it.” It will dramatically improve the chances for success.

It’s also important to continue engaging with leaders, stakeholders, and employees throughout the journey, not just up front to gain initial buy-in. Let them know that what they do matters to the organization. Yes, it takes time to do this, but engaging them appropriately in the change – instead of imposing change on them – will cause them to want to participate in the change.

Finally, make it clear that everyone must get on board. Your company must be willing to eliminate people who refuse to act in alignment with the agreed-upon strategic intent.

Do you keep your strategic plan on track?

After months of debate, dialogue and discussion you have your new shiny strategic plan.

It’s probably a three year view of how the company is going to grow.   It will describe in detail a handful of key objectives, including revenues, profitability, investment, product or sector development and customer metrics.

It’s taken probably taken weeks to edit and publish, but more often than not, during the first year of the plan, business pressures and day to day activities start to derail some of the inital strategic initiatives.   But why does this happen so often?

Normally sales and revenues metrics remain at forefront of all staff and management minds. This is usually because it’s communicated on a regular basis and the staff and management have a vested interest in its success

Spring forward a few months.  Are other key objectives become fuzzy and difficult to remember by your staff?    Has the strategic business plan become only relevant to the creators and key management owners in the organisation?

The longer term strategic plan is usually translated into departmental operational tasks.  But have these become so numerous that the key objectives become totally diluted?

Translating strategy into operational excellence is a difficult task even for the largest of companies.  Keeping key objectives on track and ensuring the longer terms goals are a challenge.

Transformational goals can be even more challenging for businesses, particularly when the strategic plan is buffeted by so many day to day issues.  Moving Sales to account management, transforming a product company to services led company or innovating new services all a strategic goals but challenge the most dedicated company.

How do keep these goals on track?   Management dashboards help, but ensuring that neutral reviews (possibly non- aligned external reviewers) keep an eye on whether the operational elements of the plan are actually delivering the key strategic objectives are essential.

Otherwise come January 1st of the following year, you’ll be thinking up another strategic plan wondering why the last one didn’t deliver.

Creating Professional Services in a Product company?

Professional Service transformation is not a quick win

Transforming a predominately Product based sales culture into a Professional Services sales culture is not a quick win. Professional Services takes a combination of approaches, both subtle and explicit. Changing the sales approach and get PS embedded into the culture of selling, takes time.

The keys to creating a Professional Service culture

In my experience, some of the big ticket items to creating a Professional Services culture are:

  •  Get senior manager ‘Buy-in’ is essential.  Ensuring continued senior management, including (senior sales managers) support the strategy of professional services – this is particularly relevant when PS sales /revenues are much lower than traditional product sale figures.

• ‘Incentives’ – Purposely loading incentives for Professional Service sales or even part PS sales

• ‘Productising Professional Services’ – Early development of Professional Services needs some structure and in most cases the sales team needs to understand how it will help their traditional product sales.

• ‘Evangelizing’ – You need champion(s) in your organization that will internally sell Professional Services and win over salesperson by salesperson. The best advocates are the sales teams themselves.  If you can get a sales member onside, you have a winner. Particularly if a Professional Service sale can show it led to a much larger deal.

• ‘Communication’ – Each and every PS win needs to be communicated, describing not just its own monetary value, but what it did long term for the traditional product range. (e.g. pull- through)

Will these tactics deliver a Professional Service revenues?

Even with all these tactics in place not all sales teams will get the value of PS. Selling PS tends to require a different level of selling into your client, on average only 10 percent of the sales team got the initial PS concept. Sometimes it is not possible to convince a product based sales person to persist with professional services.  In my experience it takes an intake of dedicated PS sales professionals to set the train in motion.

Can IT really give you a competitive advantage?

Over the years suppliers and vendors have promised many things from IT, including cost reduction, increased efficiency, improved effectiveness and many other benefits.   But how many new communication and IT systems actually give you real competitive advantage?   And how long is it before your competitor also has the same IT system?

I hear you say,  “what about the Internet”?   “What about the PC”, ” What about the ink jet printer”.     It’s a bit like the Life of Brian – “What did the Romans ever do for us”?     To me these inventions add productivity rather than real competitive advantage, but we keep telling ourselves the give us individual competitive advantages – well do they?

Increasingly clients are asking for modifications and alterations to the standard IT – off the shelf systems, extending implementation times and potentially injecting project delays. But is all this effort worth it?    Will requesting a specialized, and probably high cost IT feature actually deliver the business benefits you as an organisation believe it should?

Simpler, low cost applications with high degrees of functionality are being developed everyday.  These come from small and very agile companies, but don’t have much of a brand in the market.   However most if not all of us are reluctant to take a chance with these applications.  We fall back on the traditional main stream recognized vendors. Typically we will ask for new features to be added, as the product doesn’t fit our exact needs.   Could we do without these new features?  Possibly – but we’ve convinced ourselves that it is essential for our business.

But what about the impact on the vendor themselves.   New features requested by clients are happily sold by the eager sales department, but never properly communicated to the product or operations departments.  With new features being requested by many clients, the operational support costs rise and operational complexity also increases.  This in turn leads to individual specialisation by operational teams, potentially leading to challenging support problems when they occur.

Is all this complexity really improving or simplifying your business or are you buying the ‘badge’ because we fail to grasp what’s really needed?