Process for Transformation

Peter Strempel

All relationships begin with people finding out about each other. A transformation project is no different, and probably more reliant on building trust quickly that many other kinds of business relationships. Organisational transformation is a big commitment, and the principal change agents need to be sure of each other.

In business the foundation of trust has to be transparency and open communication. There are advantages to formal reporting and written communication, including an underlying theme of creating a modularised plan of documented and re-usable components. But there must also be regular and personal communication to ensure priorities and progress remain aligned. So the first steps are about establishing our communication plan, including the timing and format of reporting, feedback, and instructions.

My next steps will be to listen to your requirements carefully, to ask you enough questions to be certain I have understood you correctly, and then to develop with you an initial short-term set of deliverables. This beginning gives us both certainty that if we discover there is not a good fit between us, we can reconsider before going to any great effort or expense.

One of the initial deliverables will be a plan quite similar to the generic one I describe below, but tailored to your specific needs, and, most likely, a recommendation that we begin with an audit.

The Audit


Embarking on any major project requires a baseline that sets the benchmarks against which all progress will be measured. To be a useful guide, that baseline has to be accurate and honest, even if that means restating the obvious, just to ensure that no unpalatable realities have been overlooked, and all assumptions have been double-checked.

To create such a benchmark for a transformation I would examine existing processes by talking to your people in formal and informal interviews, observing what they do and how they do it, and then creating an architectural schema by producing a set of annotated Archimate and BPMN diagrams, tracing these back to their value streams and source organisational capabilities. This schema creates a blueprint that can be marked up to indicate potential problem areas and opportunities for ‘quick wins’ – changes that can be made relatively quickly and easily to improve performance.

Arising from this audit ought to be an agreement between us about how my generic transformation process will be tailored to your needs, and how the transformation process will be communicated to staff. Your preference might be to communicate personally with your teams, but if I will carry out that task, the next step is to deliver one or more team briefings, depending on staff numbers, that outline the process and preview some of the things that we will do together as a group.

The Briefing


If there is already a pre-determined agenda of transformational features, these should headline the briefing. particularly if there is bad news, like staff reductions.

The other key components will be an explanation of the business reasons driving the transformation, a preview of each of the steps in the facilitation process, and an initial explanation of change management principles.

The briefing offers the first of many opportunities I will use to emphasise the focus on business drivers for change to defuse a common fear reaction to change that translates into hostility or obstructionism.

Change management principles and practices will be repeated throughout the transformation project, emphasising those elements we judge to be appropriate to the developing team reactions and mood as the project progresses.

Critical Analysis and Problem-Solving


Every transformation is different, with unique organisational and individual capabilities, business drivers, personalities, and priorities. But one of the first jobs of a facilitator must be gauging the capacity for teams to problem solve independently across the full range of organisational business activities.

It used to be that critical thinking skills could be taken for granted as products of our education system, but increasing focus on skills-based specialisation in high school and higher education institutions can leave many people unable to apply critical thinking, analysis, and judgement when faced with new or unexpected circumstances. In my experience this applies even to many university-trained professionals.

My approach will be to expose the group to ideas drawn from knowledge management and politics to explain critical thinking in terms of ‘double loop learning’, and analysis in terms of dialectical synthesis.

Figure 1 illustrates the concept of double loop learning, which is a close analogue of critical thinking. It shows a conventional process of learning and the knowledge maturity that comes with specialisation, progressing by the route shown with green arrows to high level expertise, sometimes bordering on genius or eccentricity, which are often the same.

A knowledge management model of double loop learning
FIGURE 1: A knowledge management model of double loop learning. Click the image for a larger view.

The conventional increments in knowledge maturity are by sequential steps. But the sequential chain can and must be broken to transcend conventional analysis, indicated by the dotted pale yellow lines which bypass the sequential order. These jumps forward and backwards are the double loops after which the model is known. They occur when a conventional problem-solving exercise is abandoned in favour of re-examining some root cause or assumption, either by re-inventing an approach from its beginnings, or by identifying a faulty assumption some steps downstream from an assumed sophistication or specialisation being applied unsuccessfully. Analysis by this route then jumps ahead again in the sequence to incorporate the changed underlying assumption in problem-resolution.

This double loop process is often the facilitator of innovation, and recognised by many larger organisations as the source of knowledge creation, as distinct from knowledge manipulation. To put this another way, where conventional problem-solving may give you incremental improvements on a known process, double-loop or innovative problem-solving can create an entirely new process.

A very simple example to think about the next time you are in your favourite self-serve Sushi bar is to consider the thinking behind the food conveyor belt. Instead of the conventional approach, using service staff to tend to individual patrons, fewer staff can prepare more food for larger numbers of patrons by automating the food service component, using an idea already in common use in manufacturing assembly production lines.

Japanese restauranteur Yoshiaki Shiraishi invented the process to cope with the problem of not being able to cram enough service staff into his cramped restaurant, and not being able to provide all that service by himself. He re-examined the fundamental assumption that restaurant service must be provided by people and innovated by borrowing a solution from an entirely different area of knowledge specialisation, namely manufacturing and process automation.

The idea of double loop learning and its application for innovation and knowledge creation may seem awkward and counterintuitive at first to many people habituated into sequential mathematical logics, but a little practice makes it an invaluable component of business analysis and problem solving.

A method borrowed from politics is dialectical synthesis. That’s a fancy way of talking about combining the best of two apparently mutually exclusive courses of action to create a synthesis between them, turning these best points into a single workable solution to an original problem.

Dialectical synthesis
FIGURE 2: Creating solutions from opposing ideas with dialectical synthesis. Click on the image for a larger view.

Figure 2 shows that for every problem within its specific context there is a domain of potential solutions. Picking among these options becomes a process of eliminating options based on the given business criteria such as cost, complexity, timeliness, and so on. When only the two strongest options remain, it comes down to weighing up the merits and disadvantages of each – the dialectic – and then discarding all the cons while creating a fusion or synthesis of the strongest aspects of the pros.

Dialectical synthesis comes from the work of German philosopher Georg Hegel, but has been embraced by politicians everywhere to address political conflict with compromise or consensus solutions. Unfortunately in politics this often means a fusion of all the worst aspects of conflicting positions, and that can be a problem in business synthesis too if it is based on personalities, selfishness, or agenda other than business priorities.

However, the principle of creative friction implies that generating a strong debate based on opposing points of view generates the best possible arguments for each case. In dialectical synthesis it is important to find the strongest points for every feasible option to progressively narrow down the choices on merit.

If the debate becomes heated, it is the rôle of managers or supervisors to re-focus the proponents on the underlying business objective. In this way dialectical synthesis can also be used effectively in organisational conflict resolution.

It might take some time to get used to the adversarial dimension of dialectical synthesis, but can be very useful in resolving uncertainty, dithering, and rivalry in business decision-making.

I recall an example of this process centred on a furious argument between two IT teams about replacement middleware software, with one side picking one major brand, and the other team picking another major brand. Both teams mounted impressive arguments to back their claims, and the strongest of these arguments were then adopted by a tiger team, of which I was a member, as the criteria for what we would need. In that fashion we opted for three open source products that met 80 per cent of the criteria, and almost all of them after we spent the money saved by not buying shrink-wrapped software to customise the open source components. The two competing teams were a little deflated about not ‘winning’, but we explained to them that their vigorous support of their preferred options had been necessary to highlight the strongest possible selection criteria to match our business requirements.

Armed with the ideas of double-loop learning and dialectical synthesis, it is time for participants to put them into immediate practice by applying them to basic business analysis tools.

Introduction to Business Analytics


Providing some basic business planning models is best done in a workshop environment where participants can immediately apply the models to their business environment, or even to prepared scenarios for guided input into the transformational change planning process itself.

Figure 3 illustrates a variant of the traditional PEST environmental analysis framework. The acronym stands for the political, economic, social and technological environment in which the organisation operates. In the diagram a separate category has been added for a legal dimension. The model begins by highlighting the general market conditions in which an organisation and its competitors operate before setting a scope of environmental factors that may influence these conditions.

Business environment analytical model
FIGURE 3: Business environment analytical model.

Planners using the model must consider how each of these dynamics affects their business, both positively and negatively. Each of the separate domains can also be considered as crossing over with others, as in the socio-political mix that might create a distinct political dimension to social norms. An example of this could be societal opposition to inefficient fuels based on political activisim favouring renewable energy sources, or an obverse political activism derived from societal trends. Planners might therefore consider how their organisation uses energy or promotes itself as environmentally sustainable or friendly to its customers.

In using this model it is not as important to address each illustrated dimension as it is to consider the factors that most obviously present themselves to the individuals participating in the planning exercise. Taken together, the ideas of all participants ought to offer a comprehensive and useful picture of the business environment as it is perceived from the bottom of the organisational hierarchy up. When compared and contrasted with any analysis already conducted by the leadership team, the results ought to provide a more complete and useful analytical perspective for further consideration.

Environmental analysis should be followed up almost immediately by introducing a simple tool to permit analysis of how an organisation can respond to environmental factors.

The SWOT matrix
Figure 4: The SWOT matrix. Click on the image for a larger view.

Figure 4 illustrates the widely used SWOT matrix for business analysis, in which planners try to list all the strengths, weaknesses, opportunities and threats possessed and faced by their organisation. Participants can address the environmental factors they identified in the first part of the workshop.

Other analytical tools might be appropriate if existing strategic plans have already been based on them. But the analytical frameworks are less important than explaining to the entire team how strategic planning takes shape in the context of external factors, and that the entire process is based on business priorities in the context of environmental factors that cannot be controlled.

Whether the team is involved in changing or devising any new strategy at this early stage in preparing for transformation is a matter of judgement by the leadership team, but my advice will usually be not to discard the results of this work too lightly. It serves a purpose not only in a learning curve and preparing for change, it can also build commitment and ownership of the coming changes.

Personality Inventory


Next on the agenda is an overview of the individual and collective personalities of teams, and how this aligns with the organisational structure. This is again an activity best suited to a workshop environment with access to computers for some online work.

Even for human resources professionals, gauging people’s personality, and reaching relevant conclusions about how these affect performance or team-play is difficult. Worse, drawing conclusions and acting on them too prescriptively is menacingly authoritarian and often creates resistance and hostility among employees.

Instead of looking to pigeonhole or manipulate people, the objective should be about gaining individual and collective understandings of how personality affects human interactions. One of the most important insights of an individual and group survey of personalities is to understand how all of us may wrongly assume that we are understood the way we intend to be rather than the many different ways that could be perceived through the lenses of different personality orientations. Another important lesson to highlight is how the balance of personality within a single team gives can give it a distinct collective personality as perceived by others.

Myers-Briggs personality types
Figure 5: Myers-Briggs personality types. Click the image for a larger view

As an example, consider the case of an introverted, logic-driven team member who explains a technical issue in precise but clipped language to a group of extroverted sales people who perceive the precision and absence of small talk as aloofness, or even rudeness. That the technical specialist doesn’t realise how she projects that impression doesn’t make it less real, even if her information is accurate, and she doesn’t recognise the reaction from the sales team.

Now consider an entire team of technical specialists with similar personality traits described above: matter of fact, apparently impersonal and to the point. In a group environment with the sales team, and maybe a third team of predominantly outgoing, boisterous warehouse staff, it could be easy for whole teams to pigeonhole other teams, undermining the potential for cooperation between them before the need for that cooperation ever arises. This could also lead to personal hostility based entirely on mistaken assumptions about then intentions behind personality-based behaviour patterns.

Worst of all, teams and individual team members could misread customer personality traits and create negative impressions without any intention or awareness of this effect.

Two of the more common methods for taking individual and organisational personality inventories are the Myers-Briggs personality typing method illustrated in Figure 5, and the Enneagram typology shown in Figure 6. Leaders and team members should look at taking freely available online surveys or tests to discover their own personality orientations for group discussion. Not all people will be comfortable revealing personal details about themselves, but the objective is not revealing secrets or personal details. instead it is about creating awareness of differences, and about the effects of assumptions based on personality that may not be shared by others.

The Myers-Briggs typing tool suggest 16 major personality types comprised of four major influences each, as listed in Figure 5.

Enneagram personality types arranged by major and sub-orientations
FIGURE 6: Enneagram personality types arranged by major and sub-orientations. Click the image for a larger view.

The Enneagram method works on nine major personality types with tendencies for each to vary between two other tendencies, shown by the arrows in Figure 6, and relating to instinctive stress or comfort reactions.

After everyone in the group has taken one or both types of surveys, and read a little bit about the personality types, discussion should focus on how types align with existing authority and team structures. Are people who prefer rules and order being asked to act autonomously in chaotic environments? Are artistic, creative people doing highly structured, rule-bound jobs? Are there people scared of flexibility and change?

The hardest edge of this discussion is to raise awareness that organisational needs for change and flexibility cannot cater to all personality types and preferences. If some of the people in an organisation cannot adapt to its needs, maybe they have no future in it.

Before jumping to conclusions about such outcomes, however, the insights and ideas generated by equipping teams with analytical models and personality perspectives ought to be turned to some practical use in considering organisational structure and management styles.

Team Structures and Management Styles


Of all the things that can hold back an organisation from greater success, people and processes tend to crowd out consideration of dynamics that are much harder to see because they are too obvious.

One of those is the organisational structure, and the other is the prevalent leadership or management style.

Figure 6 illustrates two opposite points in a team structure continuum, being the rigid silo structure, and the fluid matrix structure.

The silo top-down, command and control structure is based on strict descending hierarchies that gets its name from grain storage silos which resemble an organisational structure separated out into divisions with long columns of names listed in descending order of seniority.

A silo structure may be well suited to organisations in which following precise rules and a strong emphasis on governance are more important than innovation or flexibility. Examples of organisations for which silo structures can work well are military units and some public sector bodies with statutory functions.

However, if such a structure persists only as a legacy of a dated mode of operation, it can be a serious impediment to more effective team-play and flexibility in adapting to changing business priorities.

Participants in this workshop should ask themselves whether their own working arrangements resemble the silo structure. Does this work to segregate the leadership from front-line realities? Are staff segregated from each other by function? Does this limit collaboration, cross-skilling, and career development? Conversely, does it provide guidance and certainty? Does it reinforce focus on specific tasks?

Features of Silo and Matrix organisational structures
FIGURE 6: Features of Silo and Matrix organisational structures. Click on the image for a larger view.

The matrix structure is fundamentally different. Instead of sitting above and aloof from teams segregated by function and seniority, the CEO becomes a mentoring leader of a pool of talent formed into temporary teams as needed by specific product ort service-oriented goals. These teams are guided by product owners, equivalent to former line managers, and each of the products might be subject to governance supervision by executives who might formerly have been the managers of support services and functions like accounting or HR.

In this model the environment is potentially collegial and consultative, with less emphasis on authority than on collectively identifying and attending to priority tasks. Leaders act to guide and facilitate effort by an increasingly professional, specialist staff who need a minimum of supervision to go about their work.

Matrix structures support a fluid team structure in which people coalesce around work that needs to be done rather than around fixed functions, like project teams assigned to specific work packages.

Most businesses will still have fixed rôles, such as accounting, IT support, or HR, but the people providing these functions might act more as consultants to temporary teams than specialists sitting outside operational team structures.

One of the advantages to staff of matrix structures could be the ability to develop multiple specialisations as they move between teams carrying out varied tasks.

Participants in the workshop should ask themselves to what extent their current working arrangements resemble matrix structures, and whether this works well. If not, what could be some of the business benefits of more flexible team organisation?

Situational leadership styles matched to team maturity
FIGURE 7: Situational leadership styles matched to team maturity. Click on the image for a larger view.

Following on from that discussion, the group should now consider their existing authority structure in light of the situational leadership model shown in Figure 7. The objective is to establish whether present management styles match the team maturity levels in the illustration, or whether there is a misalignment in organisational structure, team maturity and management styles.

The situational leadership model proposes four leadership styles varying from an authoritarian, controlling approach matched to teams lacking motivation and confidence, to an increasingly more collegial one matching teams with increasingly professional and self-directed cultures.

The model implies a progression, and negative connotations for more authoritarian management styles, but that may not need to be true. Nor is it likely that only one style of management and one kind of team culture exists in a single organisation.

Participants should focus on barriers they may be creating for themselves in demanding time from managers and supervisors by not acting more professionally to motivate and direct their own workflows. Conversely, do participants think their supervisors or managers are too intrusive and directive to let them get on with their work?

What kind of mix of team culture and management style would best match the features of business environment, capabilities, and personalities discovered by participants so far?

This kind of discussion, which must have some documented outcomes to be useful, is a delicate undertaking. care must be taken to ensure that participants will not fear retribution from their supervisors for honestly discussing their team environments. But supervisors, including the highest level executives, must participate in this kind of analysis if it is to lead to positive outcomes.

All the previous steps in analysing present circumstances and contemplating how they might work for the better must now be tied back to performance, how it is measured, and how it is rewarded.

KPIs and Rewards

KPIs and rewards

Precisely how that will work depends in part on the personality inventory: personality will have some impact on how much scope there is to reward people by means other than money. Flexible working hours for working parents, career development opportunities for professionals, recognition for achievements, or more comfortable office fit-out are just some methods used by some organisations as part of the rewards mix.

No matter what that mix might be, however, it has to be aligned with goals that create or add value. A common and flexible method is the development of key performance indicators (KPIs) that are specific, measurable, achievable, relevant, and time-bound, as shown in Figure 8.

Developing KPIs is not easy. A hard lesson learnt in many organisations is that people will do only those things for which they are rewarded, and if that cannot be measured in meaningful ways, reward will not match objectives. Therefore it becomes critically important to be very sure what to measure, and how to measure it.

Consider, for example, a customer relations function. If the metric is solely the number of contacts made and ‘resolved’, it could be possible to reward someone who cares nothing about customer satisfaction as an outcome. But how do you measure customer satisfaction? The metrics must be about sampling customer feedback somehow. But what if really excellent feedback requires customer service that becomes more expensive than the value it adds? The point is to recognise that there are no easy answers and developing KPIs is not a task to be taken lightly.

Some of the features of well-designed KPIs
FIGURE 8: Some of the features of well-designed KPIs.

It will not be easy to make substantial departures from present salary structures if it cannot be demonstrated that individuals and teams are increasing the value they add to the organisation.

Setting rewards must remain realistically focused on industry standards for particular specialisations, but could move towards a split model of remuneration in which a base salary is set at lower than standard rates, with a bonus component tied to the achievement of KPIs. Travel services group Flight Centre uses this system throughout the organisation, with some teams being incentivised to reach for several levels of KPIs for part of their remuneration, including ‘stretch’ and ‘super stretch’ goals for bonus components that could offer substantially above average salaries if achieved regularly. In this scenario, though, stretch and super stretch really mean what the terms imply, requiring exemplary effort to achieve.

The challenge is to make sure such a rewards scheme is always aligned with profitability and budget targets embedded in KPIs while still attracting and retaining top talent.

Developing the Plan and Beyond

Project plan development and normalisation

All the group work has now arrived at the point where teams are ready to consolidate what they have learnt and how they think they can improve how they work by developing a plan for transformational change.

If the leadership team is ready to defer a significant part of the planning work to their teams, this is again best done in a workshop environment, but also away from the workplace, possibly as one or two weekend retreats, depending on numbers and availability.

An effort like this can resembles a series of brainstorming sessions interrupted by team bonding activities to create the space for ideas to ‘breathe’ while fostering productive collaboration. In that environment I would function to package the brainstorming ideas into project product descriptions, work packages, and dependency relationships, using standard project management techniques.

The deliverable will be an outline project plan for further refinement by the leadership team, perhaps using a similar brainstorming format, but with particular attention to the business case, resourcing, and risk management.

When these tasks have been accomplished, the organisation will possess a complete project plan, ready to be implemented.

At this stage I could take on the rôle of project manager to turn the transformation into a reality, or the leadership team could choose another way forward.

In either case, implementation of the plan must be followed by normalising the changes into sustainable operational routines. That means an almost immediate focus on analysis of the new processes and systems for fine tuning and adjustments as the precursor for a continuous improvement regime, based on the Deming model embedded in standard business process management practice.

This is where my involvement would come to a logical conclusion. I can help establish the continuous improvement methods and practices, but these must be embedded in the teams themselves to function as they should.

If you have made it this far into the narrative, I hope I have demonstrated my capacity to facilitate and guide your transformational journey successfully. If you would like to discuss your particular circumstances, contact me to arrange for an initial meeting. Talking about how we might work together is always free of charge.