< BACK TO ALL INSIGHTS

Achieving Business Outcomes through Transformation: Five Guiding Principles in Action

We’ve all read a great deal about why transformation efforts fail. However, we wanted to look at transformation initiatives from the other perspective - what makes them succeed?

 

To answer that question, it’s important to understand what transformation means.

 

What is Transformation?

Transformation is about achieving a desired business outcome through a combination of changes involving:

  • Mindsets and behaviors
  • Capabilities and competencies
  • Newly defined systems and processes
  • Strong governance and support

 

Addressing any individual component can bring about change, but not necessarily a transformation.

 

Seeking to evolve an organization and what it stands for is no easy undertaking—true transformation requires sustained commitment to a clear guiding vision that is much larger than any individual or function. Through our work with organizations that have effectively redefined themselves for the future, DuPont Sustainable Solutions (DSS) has identified five guiding principles for successful transformation, as well as real-world examples of each one in action.

 

1) Know the answers to three questions: Why? What? And when?

Genuine transformation must be based on a future-focused strategy and solid business case. Whether it’s to build a defense against potential competitive threats, adapting to shifting customer expectations, bolstering a market position or addressing business trends on the horizon, transformation should be a strategic decision that moves the whole organization toward creating greater value and outstanding performance. 

 

To that end, transformation requires leadership who can visualize the desired future state and articulate why the transformation is necessary, what it involves and the timeline over which it needs to occur. While tactics are important, how the transformation will play out is not the primary focus. Emphasizing the overarching goal and the benefits of transformation embeds a shared vision among leadership, stakeholders and the entire organization.

 

For example, one regional chemical company CEO, recognizing that continuing in the commodities space would likely hurt the company’s top and bottom lines within the next three to five years, foresaw the need to move into high-value-added products. Leadership was able to establish a strong business case by comparing the impact and risks of business as usual with the development of high-value-added products.

 

This massive shift required a new model for doing business, a change in mindset and behaviors at all levels of the organization, and enhancement of capabilities and competencies across the value chain—from marketing and sales to R&D teams—as well as a stringent governance process to ensure that the transformation was on track. A successful transformation was possible because leadership was able to clearly communicate why the transformation was important, what needed to happen and when it would all play out.

 

2. Prioritize based on scale, speed and relevance.

Successful transformation requires an intensity of focus that can be difficult to immediately achieve and sustain across a full organization. Instead, by starting with pilot areas focused on critical aspects of the business, it’s possible to concentrate efforts, identifying challenges and learning what works as the organization creates early wins. This area- transformation approach builds speed and momentum and can help turn fence-sitters, who need to see change before they believe it, into agents of change.

 

Any organization is likely to be occupied with multiple initiatives. therefore, when embarking on a transformation, it is essential to be aware of other organization-wide initiatives competing for resources. It’s critical to understand interdependencies and adjacencies between efforts, as well as whether they complement or conflict with the transformation objectives. For the greatest efficiency, one must evaluate scale, complexity, time and resources required, and business relevance prior to selecting and prioritizing pilot areas for parallel or sequenced implementation.

 

Case in point, the leadership of Tata Steel India created a vision of zero fatalities and injuries. In addition to a huge workforce, the company had more than 15,000 contractors and 80 project sites to contend with. Rather than roll out transformation efforts across the full enterprise, one pilot site was chosen as a model.

 

The ability to intensify efforts in one place ensured that this project site achieved world-class standards within a very short time. Tata Steel executive management was able to parlay this win into buy-in from every employee and contractor, including union representatives. By translating learning from the pilot site to all of their project sites, they were able to quickly achieve a remarkable improvement in safety performance.

 

3. Place a high value on engagement and empowerment.

While transformation generally starts at the top, an organization’s culture is driven by employees. If a company needs to change practices or attitudes that have been in place for years or even decades, it’s critical to involve, engage, and empower the entire organization. When people understand their role in the transformation, and what they personally have to gain, they’re more likely to get on board.

 

It’s easy for leadership to imagine that they already know what is needed or what will work, but transformation hinges on a willingness to accept input from all stakeholders and create buy-in throughout the organization. For leaders, this demands intellectual humility. People need to be seen as the solution, not a problem to be fixed, and engaged in the larger vision.

 

Some people may resist necessary change because they don’t want to fail or may fear that failure could affect their prospects. Transformation requires an environment of trust that fosters innovation and creativity, encouraging people to define their own paths and providing necessary resources to think big, start small, act fast and learn.

 

This can be exemplified by the way Saudi Arabia’s Saline Water Conversion Corporation (SWCC) leadership prepared to deliver on the country’s 2030 Vision. fte goal was to optimize the use of water resources while boosting water storage and security. SWCC aimed to safely increase production from 3.5 million m3/day to 5.5 million m3/day by 2020.

 

Comprehensive assessments at four of the company’s critical desalination plants and water transmission systems identified ways to optimize operations and reduce production costs. Over 100 improvement initiatives were identified, and many were implemented. High-potential future leaders were identified to help drive change within the organization, and more than 400 employees across various levels were coached on new tools and best practices, enhancing engagement and enabling the organization to achieve operational excellence and safe operations mindset.

 

Within 13 months, the cost of water was reduced between 10% and 30% across the four facilities while increasing availability from 84% to 96%. What’s more, production increased by 1.4 million m3/day without CAPEX investment.

 

4) Maintain ownership and momentum through governance

Any transformation will be subject to challenges. The organization’s attitude toward meeting challenges and overcoming obstacles will determine how well it can sustain focus on the transformation. Every challenge that arises is not equal, so each one needs to be managed differentially at the proper levels in order to ensure that time and resources are appropriately invested. Looking at the transformation through multiple lenses can aid in identifying and overcoming barriers more readily.

 

Leadership’s mindfulness that a transformation is a series of changes over an extended period, and their ability to measure and promote outcomes, can help teams stay focused for the duration of the initiatives. Clearly identifying KPIs and milestones for monitoring progress can help prevent frustration and foster a spirit of collaboration among teams and stakeholders.

 

Within the organization, an ownership mindset will make a big impact on the pace of implementation, the organization’s ability to sustain engagement and the overall benefits of the transformation. Strong governance processes involving the right stakeholders, prioritizing focus on key issues, anticipating risks, celebrating milestones and holding individuals accountable are key to keeping the transformation on track. This can aid the critical task of maintaining organizational engagement regarding why the transformation is important as the process unfolds.

 

Saudi International Petrochemical Company (SIPCHEM) embarked on a transformation program with the specific objective of establishing a defect-elimination culture to avoid recurrence of unplanned outages. Significant, sustainable improvement opportunities were outlined, followed by identification of two implementation pilot sites with fully engaged resources.

 

SIPCHEM named the program with the acronym, SMARTO, for SIPCHEM Maintenance and Reliability Transformation for Operations. Ten KPIs were identified for regularly tracking, reporting and monitoring performance, and governance processes were set up to enable fact-based decisions through daily, weekly and monthly reviews. Daily metric tracking put SIPCHEM in a better position to monitor overall performance, and dashboards displayed around the sites showed everyone the benefits they were achieving. In addition, leadership engaged regularly with the shop floor to champion the continuous improvements being made. Within a year, the program began to show a 20% reduction in year-on-year maintenance expenditures, without compromising output.

 

5.  Communicate. Communicate. Communicate.

The workforce must be educated about why, when and how the transformation is progressing, and then hear it again. And again. Using every opportunity and every channel available, it must be reinforced that this isn’t a short-term fix that will no longer apply when a worker moves to a new role, or a fleeting idea being put in place by the leadership team or a new executive, but a crucial evolution that will assure continued growth and improvement. One proven way to generate excitement and keep people tuned in and engaged is by creating an ongoing internal brand campaign. For example, Norfolk Southern operates the most extensive intermodal network in the United States and is a major transporter of coal, automotive and industrial products. As part of their safety transformation, leadership saw the need for a compelling personal message to motivate the entire company to make safer decisions. fte theme, I Am Coming Home™ was developed to connect with their diverse, dispersed employee population on an emotional level, and was delivered through a multichannel communication strategy that included music, videos, handwritten notes and leadership coaching in how to deliver their own internal I Am Coming Home messaging effectively. fte phrase resonated with workers who were able to imagine who they would be coming home to at the end of a safe workday.

 

Even though transformation is driven from the top, a combination of bottom-up and top-down communication is necessary for transformation to be successful and sustainable. Empowering the shop floor and middle management to share achievements, benefits, needs and concerns will instill a sense of pride and ownership that can propel them to step out of their comfort zones and to reach further. Knowing what’s next on the horizon and how what they’re doing today links to the overall vision will help keep the entire organization engaged and focused on the transformation. At the same time, open listening and soliciting feedback fosters an environment of trust that paves the way to continuous improvement and operational excellence.

 

Why these five guiding principles matter.

While new systems, tools and processes are critical to the transformation, people will be the key that allows the new vision to thrive. Helping individuals at all levels understand how the transformation will benefit them, acknowledging their contributions and keeping them engaged throughout what may be an extended period of time is fundamental to success. A holistic, integrated approach that values people and how they connect to systems and processes is essential for bringing an organization’s transformation to life.