Today, the effect of digital technologies on markets and customer behaviors makes transformational change an imperative, not a choice. Worldwide, companies will spend an estimated $7.4 trillion on change initiatives in the next three years. When making such huge bets on reengineering how work gets done across the organization, how do you ensure you’re heading in the right direction?
Experience shows that such large-scale projects often flounder in the face of organizational inertia — internal resistance to changes to working cultures, workflows, and movement away from practices that had always worked in the past. For many, the end result was incremental change and piecemeal implementation of different digital systems rather than an organization-wide transformation.
It’s no surprise, then, that addressing friction between top-level strategy and everyday execution has become a priority for business leaders, according to industry analyst Chris Marsh of 451 Research.
In a recent webinar, Marsh was joined by Dr Ryan Herson of the international chemicals business, BASF, to discuss how companies have successfully addressed these drags on progress.
Herson, BASF’s regional lead for the company’s Project Simplify and who has a PhD in Applied Organizational Psychology, believes the lessons to learn from these organizations can be summed up in 3 A’s — agility, autonomy, and alignment. This framework of interdependent attributes is the key to overcoming operational friction that slows growth and hinders transformation initiatives.
Here’s how the 3A framework helps to maximize operational performance, efficiency, and deliver EBIT improvement.
The 3A Framework
1 — Agility
Taking its cue from the Agile Methodology in software development, wider operational agility demands the ability to ensure the right activities are prioritized at the right time and delivered at a sustainable velocity. Speed, yes, but not burn-out.
And what takes priority? Actions that deliver the most customer value — whether that is the end customer of the business or an internal stakeholder. Marsh comments:
The digital age requires companies to be more operationally agile. Agility is the first ‘A’ in our framework. There’s more change in markets than ever before, there’s more disruption, and companies need to respond quickly.
One of the founding principles of the Agile methodology is that work is done best by self-organizing teams — the right combination of talents to overcome each problem and succeed in each challenge. That means leadership working across departmental seams and individuals and teams from across the business being encouraged to collaborate to drive new market opportunities. Trying to get things done via traditional, org chart-based hierarchical management is too slow, less productive, and less likely to find the right solution. So, as the Agile methodology prescribes:
Build projects around motivated individuals. Give them the environment and support they need, and trust them to get the job done.
2 — Autonomy
Another lesson of Agile is to encourage people closest to decisions to take them — empower expert practitioners within a review and oversight process to ensure organizational risk is considered. Quick decisions within a framework are good; maverick ones outside them are not.
Marsh explains that in a 451 survey, employees identified autonomy — more ownership of how they do their job — as their first preference if they could have control over any aspect of work to be more productive and engaged. He explains:
Operational agility can only be achieved if you give more autonomy to more people. Autonomy is the second ‘A’. To give people autonomy, technology needs to be designed in a way that allows non-technical people to get more value out of it.
3 — Alignment
451 also surveyed business leaders about how to become more operationally effective. The consensus was aligning goals and actions. But it’s not just a question of everyone being on the same page — everyone wants to see the whole page.
Employees and managers alike want visibility into work happening around them at the seams of their responsibilities — seamwork as well as teamwork. There’s a new dynamic of visibility throughout the org; not just top-down, but throughout. Marsh says:
In giving people more autonomy, you also need to ensure there is alignment with the company strategy, departmental goals, compliance requirements.
One major point of friction to overcome is the legacy of earlier piecemeal digital deployments. As Marsh explains:
The biggest pain point for many people is the number of apps they have to use. It’s overwhelming, confusing, and creates even more silos within the workplace. Enterprise work management solutions help companies overcome this through integrating disparate applications and providing a single platform to connect all work, the result of which is better collaboration and productivity.
The pay-off of transformational change
Despite the multi-trillion dollar investment globally, only a minority of companies will succeed in delivering the transformation they hope for — but the rewards for success will be significant.
According to research by McKinsey, the 30% of companies that succeed in their transformation efforts are likely to be in the top quartile of corporate financial performance. What’s more, there is the prospect of both top line and bottom line impact. McKinsey says:
Our data show that 41% of transformation value is generated from growth initiatives. That’s a reminder that ‘transformations’ are not just about cost cutting.
How should you apply the 3A stress test?
One way forward is to approach the 3A Framework as a stress test when evaluating a proposed transformation project. Instead of simply looking at the cost of implementation, business leaders should challenge themselves with questions that assess the outcomes:
- Will this change in workflows help our teams be more productive and also more strategic? In other words, are the three A’s all accounted for in our plan?
- Will the velocity of decision-making and execution increase at a sustainable rate?
- Will teams feel more ownership of tasks and how they do their job — and more engaged in their enterprise as a result?
If the answer is no to any of these questions, it’s time to think again.