By Contributor,Roger Trapp

Copyright forbes

Employee engagement is essential for the success of transformation programs

Thanks in large part to the rush to digitize accelerated by the pandemic and now the dash to get on board with AI, organizations across the world seem doomed to be in a permanent state of flux. No wonder employees are — depending on which report you read this week — stressed or burnt out, “quietly quitting,” looking for another job or simply fearful that agents will wipe out all the jobs. Just as the geopolitical scene has become all topsy-turvy, so the business environment is constantly shifting. So much so that those charged with trying to make sense of it talk, not of change but of transformation.

According to a recently published report from Arthur D. Little, the management consultancy, “volatility has become the new norm.” In an acknowledgement that there really is no hiding place, it adds that “it is no longer sufficient to simply endure or adapt passively.” The companies that will thrive rather just survive will be those that “commit to continuous, purposeful and iterative transformation.” So convinced is the firm that transformation is replacing the old management consulting standby of implementing large projects, it has taken its own medicine and created a transformation practice. Embracing Transformation in a Disrupted World is the first in what is intended to be an annual series of surveys.

This initial study discovered that 65% of companies are undergoing wide-reaching or expanding initiatives that amounted to transformation where it is defined as “a holistic process that involves redefining an organisation’s strategy, operating model, capabilities and culture to sustainably improve performance, adapt to disruption and unlock new sources of value.” Although this implies a scale of project greater than the many other business change programs that have often proved challenging, these organizations cannot be faulted for their optimism. Fully 95% of respondents are highly confident that their efforts will deliver success.

Francesco Marsella, managing partner and global leader of the new practice, interprets this as a positive sign providing “a sense of urgency,” but is still concerned that the level of confidence does not reflect the size of the challenge. There is a paradox, he said in an interview shortly after the report’s publication, whereby technology was “promising improvement but creates fears in the workforce.” For this reason, it was imperative that leaders had a clear communications strategy with particular emphasis on explaining why the transformation was needed.

Indeed, the report spells out the dangers of companies seeking to embark on far-reaching changes without gaining the commitment of their employees. “Technologies such as AI will radically shift both business models and how every employee works, making it even more challenging (and vital) to mobilise people.” It adds: “Success will require organizations to focus much more on their people, going beyond structural change to embed cultures that support transformation and agility. They must also encourage employees to move forward and engage with the re-skilling and upskilling programs required to ensure they have the right capabilities for the future.”

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The wide-ranging survey identifies certain key differences between regions and sectors. For example, Europe, North America and Latin America are putting more emphasis on re-skilling than Asia-Pacific, while the high-tech and consumer goods/retail sectors are aiming for the fastest transformations at around four years, with manufacturing and automotive closer to five years. Another key difference highlighted by Marsella was in leadership approaches. In the U.S., the CEO typically led the transformation, he said. He or she was also more likely to split the program into short assignments, “delivering success and momentum,” rather than opting for “big, monolithic programs.” In Europe, on the other hand, there was more likely to be a chief transformation officer. Although he did not say one approach was better than the other, the report suggests that the effectiveness of a chief transformation officer depended on whether they reported directly to the CEO or to somebody lower in the hierarchy.

While the study recommends best practices for each element of companies’ transformations, it does identify three overall lessons that leaders should heed.

Companies must be able to anticipate, rather than simply react to, strategic gaps in their capabilities and skills through scenario-based workforce planning.

They must take steps to fill these gaps through an intense capability-building program that educates and trains employees for the future.

They must find new ways to mobilise individuals to embrace challenges and transform themselves as the world changes.

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