Seth Goldstrom: “Transformation” has really become an overused word that means different things to different people. Our group has always defined it as being a holistic, rigorous effort that helps an entire company achieve its full potential. Oftentimes, that potential is a multiple of what people thought was possible. To me, that’s part of what makes something a transformation as opposed to a tactical, performance improvement effort.
One of the things that really has changed in transformation is the notion of being holistic. Ten years ago, a lot of the focus was on financial levers. Transformation was built around what an organization was doing to drive improvements on the income statement or the balance sheet. Today, the aperture of impact has really widened. In the transformation context, “holistic” now means looking at a much more varied set of improvements. That can include addressing how a company is run and the organization’s culture. It can be addressing capabilities or improving functions and processes. It can also mean taking a look at customer satisfaction or the impact the organization is having on society more broadly.
Regardless of how you define transformation, some of the prerequisites for driving successful transformational change remain the same. Some of these core elements are just as important as classic financial levers.
The first is having a quantifiable goal that’s grounded in the full potential. That goal could be financial. It could be trying to get to a certain level of diversity. It could be around inclusiveness or carbon reduction. The critical piece here is being able to say, “This is what we want to get to by this date.” This means having the ability to look back and ask, “Did we reach the goal or not?”
The second core element is ensuring that the broader organization is truly activated. People must be fully committed and bought in to reaching the goal. They need to want to get there as opposed to just being told to do it. There must be a genuine level of discomfort with where they are today and a desire to be better.
Finally, there needs to be a concrete plan that you can look back on and hold yourself—and hold the team—accountable to. In other words, for a transformation to be successful, there needs to be a trackable plan. You must have the ability each week or each month to ask, “To get to that goal, what are the milestones we said we’d accomplish in this time frame? Did we do what we said we were going to do? If not, why not? And what did we learn from it?”