“Transformation” has become a highly overused, misused, and abused term. Many organizations seem to “transform” on a regular basis. We consultants are also guilty of overusing the term, partly because it represents some of the most interesting work we do, and partly because it is the rare company that can successfully pull off transformational change without having at least a few consultants around. A quick Amazon search identified 7,482 books on organizational transformation. However, not all change is transformational change. Here is how I categorize change efforts. Do you have a broader, or more nuanced categorization?
Efficiency – doing things right. Efficiency programs are the easiest and most common type of change initiative to employ. They target operational budgets and, if successful, easily demonstrate bottom line savings. A significant portion of efficiency initiatives focus on process improvement. They attack what we already do with the intent of making it better. These initiatives generally address three specific areas, reducing operational cost, increasing speed of process execution, and improving product and service quality. Most organizations source these efforts internally, occasionally bringing in consultants for staff augmentation and hard to find skills.
Effectiveness – doing the right things. Effectiveness initiatives focus largely on strategy alignment and mainly address the organization’s discretionary spending. Their goal is to ensure the entire organization is investing its energy and resources on the things necessary to create maximum value through accomplishing strategy and realizing current goals. Implementing best practices and strategic sourcing are common activities. These initiatives frequently employ external consultants to bring an outside-in point of view and to spur innovative thinking.
Transformational change – doing things differently. Transformational change goes beyond industry best practices to fundamentally redesign how the organization works. The goal is building high-performance organizations. Transformational change includes elements of efficiency and effectiveness but goes well beyond these practices to create something unexpected. These initiatives usually employee a variety of external consultants to bring in thought leadership and hard to find skills.
The bottom line: _______________________________________________________________________________________________
Not all change is created equal. Organizational transformation can deliver significant value but is exceedingly difficult to execute. Transformational change is often discussed and written about, but is rarely attempted and even more rarely accomplished. The value received from change initiatives is proportional to the effort involved. All change initiatives can create value. Don’t inflate expectations by calling minor changes transformational.