The secret recipe for organizational transformation

Today we are talking about organizational change. As innovators, creating change is what we do. You may have already learned that change is not always welcomed, such as when the new product you created also cannibalizes an existing product your organization provides.

Organizational change and transformation is challenging, and today we’ll learn how to navigate it more successfully, thanks to our guest Lisa Carlin. 

She is a strategy execution specialist, scaleup mentor, and co-founder of FutureBuilders Group, a network of Organisational Development specialists. She works with ambitious leaders to turbocharge their transformation and business planning. Having begun her career with McKinsey and Accenture, Lisa’s experience has allowed her to achieve a 96% transformation program success rate, in comparison to only around a 30% success rate as reported by most research. Not bad Lisa.

Summary of some concepts discussed for product managers
[2:31] Why do organizations need to transform and what are some examples of transformation?

What happens if you don’t transform? IBM did a fabulous job moving from mainframes to PCs, and they’re still in the market. But Kodak didn’t transform, and we know what happened to them.

Transformation is driven by the need to keep up with the competition. That might mean a new strategy, new sales approach, or a new marketing approach. It doesn’t have to be a response to something wrong. It can be in response to a need for cost reduction, competition, stakeholder pressure, or mergers. Since COVID, a huge shift is going on in transformation, especially digital transformation. Eight to ninety percent of organizations are doing some form of digital transformation at the moment. There’s a big shift around skills-based organization, and now organizations hire for skills rather than thinking about a job design unit. With the shift to online, it’s easier than every to learn new skills, and we need to pick up skills. The World Economic Forum says over 40 to 50% of jobs are going to be obsolete by 2025.

[7:16] What digital transformation are you seeing?

Digital transformation has been around as long as digital technology has. Now, digital transformation is seen as a more comprehensive change in the organization. In the late nineties, cultural transformation was a little “out there,” and now it’s become mainstream. Now people see culture as a key lever for performance improvement. Working within the culture is important, and changing the culture is important.

It’s not enough to just say we’re going to transform. It’s the difference between installation and implementation. You can’t just install transformation. You’ve got to actually implement it in the organization.

[10:54] What is your secret recipe for a 96% success rate of organization transformation?

There are three things:

1. Culture
   
2. Get out of the dark room
   
3. A multidisciplinary approach
   

Culture can be a prison or a playground for innovation. Your organizational culture can significantly hold your back from implementing new products or coming up with new product design ideas. Clayton Christensen spoke about creating a separate business unit for new product development and innovation because of the culture. In a large organization, some folks will be protective over their area and not think about the customer or business benefits as a whole.

Work within the culture you’ve got. Figure out the culture. Choose the top three words that describe it. Then play to those issues.

Get out of the dark room: Use co-design. Don’t develop products on your own and announce them to the organization. Talk to people in the organization and get them on board.

A multidisciplinary approach: I use a model called the Future Builders Transformation Framework. It’s for executives and managers working in the transformation space who want to lead implementation faster and better. The model has three simple circles:

1. Business: strategic commercial perspective that gives precision to the transformation
   
2. Change: getting people involved in co-design
   
3. Project: project management skills that build traction
   

They all sit in a sea of Culture. We’re looking for a transformational approach in the middle, where the circles overlap. To deliver a successful transformation, we must make sure we have all three perspectives. If we don’t, we have to surround ourselves with people who do. If you can do that and attune your approaches to the culture you’re in, that’s when you can get the flywheel to return on investment and innovation.

[27:28] When change is necessary, who needs to be part of it?

It is necessary to work with everybody at all levels, because if you don’t, you’re missing out on important input. In one organization, we were helping with a big cultural change. We had the sense from a culture survey that the culture was very anti-innovation. We ran focus groups starting at the bottom of the organization with blue collar workers and worked our way up. We recorded what each group said then got somebody else to do a voiceover to protect people’s identities and played the recordings to the managers. We did that for five different levels of the organization. The managers heard that they were instilling a fear-based culture and being insensitive to the illiterate blue collar workers.

After the transformation, one forklift driver said, “I used to be scared to come to work, and now I feel like my team’s got my back.” Only by talking to people at all different levels can you really unpack what’s happening.

[31:42] Do you have another example of transformation?

A large organization had a quality review program, and they weren’t getting any momentum. Their main issue was they were a large organization, over a hundred thousand people, in decentralized PNL units. They hadn’t tapped into the culture. Each part of the business was like its own mini business. Unless they could get every single business leader to champion a project, they wouldn’t get buy-in. They were trying to manage all their stakeholders separately. They tried to spray all these change management frameworks and pray it works. It doesn’t work unless you understand the culture.

Action Guide: Put the information Lisa shared into action now. Click here to download the Action Guide.
Useful links:

• Check out FutureBuildersGroup.com
  
• Subscribe to Turbocharge Weekly, a free newsletter with tips on strategy execution, transformation, projects and change with over 6,000 subscribers
  
• 17 top transformation tips, the secrets to 96% success rate
  
• Turbocharge Your Transformation membership, a community supporting business leaders (including product managers, and those aspiring) to accelerate their strategy execution, projects and change
  

Transformation Framework

Innovation Quote

“You can’t get to the Unicorn Zone by pushing harder. You must create a pull effect.” – Lisa Carlin

Thanks!

Thank you for taking the journey to product mastery and learning with me from the successes and failures of product innovators, managers, and developers. If you enjoyed the discussion, help out a fellow product manager by sharing it using the social media buttons you see below.