A Critical Perspective
A progressive consulting approach for the management of business transformation must be able to address the business aspect with the necessary urgency and adequate depth. This approach must give the human element the same importance as strategic, financial and technical challenges.
The human element is almost always the main cause of inefficiencies in the transformation process. The reasons for this are manifold and lie mainly in the cognitive and psychological area. Most consultants and consultancies are not set up to address them.
This is precisely where you, as a leader, a sponsor or a manager – can positively influence the results of the transformation.
We live in a knowledge society, in a divergent time, in a time of exponential transformation. Our environment is changing faster than we are able to process and internalize information and changes. This is explained by the acronym VUCA: Volatility – Uncertainty – Complexity – Ambiguity.
The great impact of today’s VUCA world is revealed in a study published by Bain & Company from early 2016. Large transformation projects of 250 large companies showed that only 12% reach or exceed their targets, 38% deliver less than half of the total expected result and the remaining 50% are mediocre, with the potential to destroy further company value.
The knowledge society places the human being in the center. Humans have become the most important, but also the most vulnerable resource. They require more attention and support.
The still typical instruments and methods of management, which come from a calculable and predictable world, are not suitable for this, but man is human after all, and subject to his compulsive repetition: he is insecure, afraid, has something to lose, so he reaches for the tried-and-tested – the so-called best practices – even if the framework conditions have already radically changed. Unfortunately, this is true in private life as well as in business. The divorce rate in Germany over the last ten years is about 47%.
The symptoms are addressed, but the causes persist, and the results don’t improve.
If one understands how inefficiency emerges, then one can counter it.
In the transformation process from the old to the new target state, technical problems and challenges of organization dynamics are treated separately, asynchronously and with incorrect emphasis.
From this imbalance arise inefficiencies that can turn into toxic situations, solved only by a radical restart. People and organizational units do not provide what they should have delivered according to the plan. In addition, they often generate anti-goals, so a mission generates its counter-mission: an official project with the intention of centralizing functions can quickly generate many small unofficial activities that do everything to maintain decentralization as a paradigm.
All are busy but nothing moves.
Information about the ability of the organization to transform in terms of a specific goal, i.e. how capable the organization is of achieving the new goal, would help to plan more reliably and to reduce losses.
It is necessary to address the human element in a targeted manner, in order to recognize and eliminate target-oriented actions in the organization. An already proven method is based on a structure-efficiency factor evaluation in five dimensions:
- Congruence of Objectives
- Mastery of Complexity
- Psychological State of the Organization
- Operative Systems
This diagnostics is based on INSEAD’s Clinical Approaches to Management. It combines pragmatic business expertise with organizational psychological approaches in a fast and non-invasive form for the organization.
Progressive counseling must address the causes of the VUCA world, and thus help people achieve greater efficiency – that is, to help them not get lost.
In the case of transformational projects, an organizational psychologist consultant will also be part of a counseling team, as well as strategists, financial and computer experts.
It is essential that business leaders and analyzers of human behavior work hand in hand. This is one of your most important tasks in the VUCA world.