NextGen

Study: Managing a Successful Organizational Transformation Requires Emotional Investment

In an organizational transformation, leaders must do more that ensure that their teams have the processes, resources, and technology they need—they also need to build the right emotional conditions, four researchers wrote in the Harvard Business Review.

Speaking to more than 900 C-suite managers and more than 1,100 employees who had gone through a corporate transformation, Andrew White and Adam Canwell of Oxford University, and Michael Wheelock and Michael Smets of EY found that two thirds of leaders said that they had experienced at least one underperforming transformation in the last five years.

To determine what leaders can do to manage such transformations successfully, the researchers interviewed 30 leaders of transformations and surveyed more than 2,000 senior leaders and employees in 23 countries and 16 sectors. Half of the respondents had been involved in a successful transformation, while the other half had experienced an unsuccessful transformation. Their research yielded six levers to maximize the chances of success when implemented.

Leadership’s own willingness to change led the list, as leaders need to look inward first and examine their relationship with change. “If you are not ready to change yourself, forget about changing your team and your organization,” Dr. Patrick Liew, executive chairman at GEX Ventures, told the researchers. Leaders need to engage more with their emotions and become accustomed to the discomfort that accompanies personal growth, they wrote.

Second, leaders must create a unified vision of future success, “another all-important foundation point of a transformation,” they wrote, finding that half of the respondents involved in successful transformations said the vision energized and inspired them. Employees, too, must understand the urgent need to disrupt the status quo, they wrote. “It’s not about me telling people ‘This is what’s going to happen,” a managing director in the medical device industry told them. “It’s about me creating this shared sense of ownership … and then [coaching] my team on what they need to achieve.”

Third, a culture of trust and psychological safety makes employees feel confident that they can share their honest opinions and concerns without fear of retribution, they found. “Trust and care from leaders can make a difficult transformation more emotionally manageable,” they wrote, citing an example of a company whose employees who were afraid of the transformation, so they did not speak up. The transformation did not go well.

Fourth, a process that balances execution and exploration “empowers the workforce to identify solutions or opportunities that better meet the long-term goals of the transformation,” they found. “Innovation requires the right people and processes,” one respondent told them. “Both are critical to encourage collaboration and experimentation.”

Fifth, a recognition that technology carries its own emotional journey matters, as the researchers discovered; the leaders in their study ranked technology as the biggest challenge they faced in their transformation efforts. In successful transformations, leaders ensured that technology was seen as the means to achieve the strategic vision. They focused on quick implementations of new technology rather than perfect implementation, and invested in workers’ skill development to ensure their readiness to create value using the new technology.

Sixth, a shared sense of ownership over the outcome entails collaborating closely with the workforce to create new ways of working and be much more responsive to their views, they reported. This helped build a sense of pride and shared ownership across both leadership and the workforce.

“To conclude, it’s worth reiterating that all transformations are tough,” they wrote. “What we saw throughout our research is that leaders who are truly working with their employees are much more successful. They acknowledge and manage emotions, rather than pushing them aside or ignoring them. The best leaders create vision across the organization and a safe environment to work together and listen to each other.”