Service Transformation: More an Art than Process

The mistake many leaders in industry make, is to believe that defining a clear vision and strategy with ruthless follow up is the only recipe for success. This may indeed initiate change, but rarely do the results last. Often 3-4 years later, the business will be addressing the very same issues, but under a new management team. For companies making the strategic shift from product to service thinking, the scope of change is no different in that this type of transformation touches all aspects of the business. In their urgency to achieve results, many leaders breeze over the communication, incentives and cultural engagement necessary to to achieve the required emotional buy-in from employees. In their minds, treating change as a rational process makes it easier to determine key priorities, identify pitfalls and plot a roadmap with a beginning and end. But many initiatives fail, because people do not act as rationally as leaders assume. In fact people have been shown to be very unpredictable, making this part of change management more art than science.

The question is how can leaders better apply this art? A good place to start is to be able to clearly articulate a vision of how an organisation makes money and grows. Although a very basic business question, it is the key to managing our way through the complex web of organisational change.

One way of looking at this is to see a profitable businesses as being created by loyal
customers who place a value on the product and service they are buying. This value is created by delivering excellent products, services or increasingly solutions, which make a significant difference to the competitiveness of customers. Excellence has two components to it:

1. The processes and systems
   that enable
2. People to deliver results (whether that be profit, outcome or growth)

As most managers will tell you, ensuring your people are engaged in what they are doing is the very lifeblood of a business, but how do we achieve this? Some may use use fear, which gets things moving, but is only ever effective in the short term and does damage in the long term. Most agree that people have to be basically happy to sustain change over an extended time period. This ‘happiness’ is essentially influenced by the culture of the organisation, which evolves from the values displayed by leaders, their vision and the backing of stakeholders who own the business. This is not new to experienced managers, yet so many focus on the well defined processes of moving from strategy to operational excellence. On reflection, profitable long-term profits are really generated by creating the Culture that engages people to deliver excellent products or services that create customer value. This in turn drives customer loyalty, providing the opportunity to expand margins and increase profitability. Understanding how the different elements of this business ecosystem interact is not so much a management science, but more the ability to influence people and customers who are rarely rational. The skills required to manage people are more tacit, difficult to articulate and built over years of experiences. However they are critical to success! Even a self proclaimed technologist such as Bill Gates recognised the importance of the team around him:

“Sometimes, I think my most important job as a CEO is to listen for bad news. If you don’t act on it, your people will eventually stop bringing bad news to your attention and that is the beginning of the end.” Bill Gates

 But how to bring this people dimension into your change programme? John Kotter’s much acclaimed 8-step process provides useful insights into how we should drive change through an organisation. However it is also important to acknowledge that organisations are made up by individuals. You know that lasting change is achieved when people start to really think differently. But we all know that you cannot tell someone how to think. The key to influencing an individual is to clearly articulate the expectation, and then make sure that everything we do is aligned with what we have said. Any inconsistency and you will be found out, as any one with children will tell you.

Let’s be honest, this is not new. How many times will you hear the mantra that people are the key to change, yet many managers shy away from this challenge.

Leaders who achieve results from their change programmes, are those that manage to turn these ideas into concrete concepts. For those who want to improve their management of change, there are perhaps five key messages to reflect on:

1. Powerful story telling: One of the most powerful concepts leaders can use to turn dry strategy into an engaging vision is through story telling. Since the dawn of time, people have been captivated by stories. The role of leaders is to tell the story that inspires all the stakeholders in the ecosystem, not only employees, but also clients and shareholders.
2. Walk the talk: Telling the story is not enough. Leaders have to live it and live to the values they espouse. Commitment is key to credibility!
3. Common language: If story telling is the key to inspiration, creating a common language is the key to longevity. Language becomes a habit. It influences how people solve problems whether that be inside the organisation, or interacting with customers and partners. Creating a common language and view of the business is much more than words. It is creating a mind-set that influences how we articulate ourselves and conduct our everyday business.
4. Relentless follow up: Changing culture is not an overnight process. It is often said that to integrate a new habit, one must repeat an activity 21 times. It is no different for developing culture within an organisation. Successful organisations formalise the process at different levels in the organisations:
   1. Consistent messaging from leaders
   2. KPI’s & personal objectives that support and align with change
   3. Cross-functional work groups that influence the behaviour and language of individuals, and so help them understand their influence on other parts of the organisation
   4. Support for individuals through mentoring, coaching, reward & recognition and self service programmes.
5. Take advantage of opportunity: See changes in organisational and customer needs not as problems, but offering the opportunity to make step changes in thinking. For example when something goes wrong in the business, there is often significant focus on an issue, providing access to senior managers and so and opportunity to influence change. However preparation is required. To turn problems into opportunities, leaders need a good holistic understanding of how their ecosystem works in their business environment.

What this discussion illustrates is that leaders who succeed in achieving long term change, do so by not only following a robust management process, they also exhibit an understanding of the less easily defined ‘art’ of change. Although most do so through their own intuition built on real life experiences, many shy away because of the irrational nature of people. But it does not have to be this way. Through understanding some basic principles and tools, these managers can increase their engagement with their people and clients, and so dramatically change the effectiveness of their change programmes.

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