Adapting to disruptive events has become a major part of business over the past few years, from dealing with the onset of the COVID pandemic, to the rise of remote work, and an ever-turbulent labor market.
But a new study shows just how hard change can be. Only 12% of business transformations actually achieve the goals that they originally set out to do, according to a survey of more than 400 executives and senior leaders conducted by the consulting giant Bain. And a significant reason for the failure to make a change was because companies didn’t invest correctly in their own workers.
“Talent is a critical factor to really get it right,” Melissa Burke, executive vice president of Bain’s change management and implementation practice, tells Coins2Day. “There’s some pain points that are critical for us to address.”
Bain’s research identified three key mistakes companies make that hamper their transformation efforts:
Failing to identify critical roles needed to successfully implement change
While CEOs and CHROs might have a broader sense of which roles will be most important for a business transformation, they often don’t do the legwork to determine what responsibilities and skills will be needed for each role.
Around 76% of survey respondents who had a successful transformation said they understood which roles were essential, compared to 58% of poor performers who reported the same.
In addition to matching skills with job titles, Burke says, CEOs and HR leaders should create a cohort of the critical roles necessary to pull off a transformation and make sure they’re working in close collaboration with the executive team. CEOs should also consider establishing a centralized office helmed by a chief transformation officer (CTO) to help orchestrate the initiatives. Companies that deployed a CTO role or something similar saw a 25% higher success rate, according to the survey.
“It is super important for the CHRO and the CTO to form a really good working relationship, recognizing that this talent problem, it’s going to be a hard one, and they’re going to need to overcome it to succeed at the transformation,” says Burke.
Overworking “star player” employees
It may be tempting to task your best employees with leading big transformation initiatives, but doing so can also create burnout among these key workers.
Around 56% of executives at companies with successful transformations avoided overloading their top leaders, while only 44% of those with poor transformation outcomes reported the same. And around two-thirds of survey respondents with successful transformations ensured that people deployed to these initiatives were either reassigned completely, or relieved of at least half of their other tasks.
“It’s not only just putting the right people in the seats, but then what are you taking off their plate to make room for it?” Says Burke. “Because oftentimes, it just gets added on top of everybody’s day job, and there’s just not enough hours in the day for them to really do it justice.”
Failing to incorporate talent strategy with larger business goals
While CHROs are responsible for overseeing a company’s long-term talent strategy, companies have historically excluded talent management from the broader business strategy, leaving the HR function siloed.
It’s important that CHROs are included in transformation strategy conversations early on, helping to identify what skills and talent the company needs over the course of the next five to 10 years.
Burke also recommends organizations break down their talent strategy into short-, medium-, and long-term plans. Identifying key critical roles should be a short-term priority, while medium-term initiatives would include incorporating the rest of the company’s leaders and senior employees into a transformation. For the long term, leaders should look at their entire workforce, identify what skills will be required of them in the future, and start planning how workers will attain those abilities.
“You don’t have to solve everything from the get-go,” says Burke. “But breaking it down and having the CHRO, CTO, and CEO all lock arms together along that journey is super critical.”
