The seven main reasons businesses fail to transform
Here’s a scenario. You’re the CEO of a business that’s hit a wall. The excitement of your start-up days is a distant memory. As your business has grown, you’ve realised it needs to change. But every time you try to transform, your initiatives fail. Why is this?
I’m here to tell you we see it all the time. We work with clients, large and small, who are all facing similar challenges to yours. As they grow, there are transitions they need to navigate. And they’re not easy.
As I reflect on my experience scaling three businesses, I think about where things went wrong and the lessons I learned along the way. What could we have done differently? Was there a different set of metrics that would have driven the change we wanted? Or could we have approached the problem differently? This and my coaching experience have taught me seven reasons businesses fail to transform.
1. Lack of urgency
There are times when clients lack a sense of urgency. They’ll tell me enthusiastically, ‘We’re going to do X, Y or Z in the next quarter.’ But when it comes to it, their actions don’t mirror their enthusiasm. Often this is due to an inability to focus. Let’s face it. We live in a world of busy noise and distraction. There will always be conflicting demands coming at us from every direction. But sometimes, these clients don’t want X, Y or Z enough. It’s almost a case of deliberate self-sabotage.
Clients are full of good intentions at the beginning of their relationship with us. They love the Scaling Up methodology. They tell me they’re going to adopt agile in their business. And then they don’t pick up any momentum.
You have to make success binary. There’s a singlemindedness required from the CEO to use a set of metrics and stick to them. Decide on one number, obsess about it daily, whip up the team and constantly drive and iterate. Without this, it’s not going to happen.
The clients that get it see spectacular results. It’s so satisfying to watch. I remember Mudano before Accenture acquired them. They lost and recovered £5 million in revenue in a single quarter. The way they came together and galvanised the team was inspirational. They stopped doing anything that wasn’t going to drive the target, went away and hit it. Fantastic!
2. Lack of unity in the Executive Team
Too often, the team that’s trying to drive the change isn’t broad enough. As CEO, you can try and do it alone. But if your Executive team isn’t lined up behind you, you’ll find it impossible to make any headway. Even one naysayer or backslider is enough to wreck your plans. And beware of fake commitments. We see team members saying they’re going to do something, and then it doesn’t happen. Maybe there’s a lack of ‘disagree but commit’, which leads to fake harmony. As CEO, you must confront this behaviour. It’s toxic.
Clients spring to mind where the CEO is committed with high pace and energy. But this isn’t matched by their team. Frankly, they’re surrounded by slopey shoulders. If this is the case for you, consider bringing in talent from outside. Or even letting some of the Executive Team go.
Changing a business can feel like turning an oil tanker – it’s a big task, and you need the right people around you. We advise a small number of committed individuals who can help you increase the metabolic rate. Then it’s a case of agreeing on a small number of fundamental things you must do, and grinding down on them, day in and day out.
3. Your purpose is too weak
The Executive Team needs to feel pulled towards something that excites and motivates them. Here, a clearly defined sense of purpose becomes important. It’s like losing weight. If you think, ‘I’m too fat; I need to lose a stone’, your progress may be quick initially. But once you’ve lost five pounds, you start eating yourself back to where you started. It becomes more meaningful if you think, ‘I need to shift the weight so I can play football with my kids.’ You’re being pulled towards something important to you.
Your sense of purpose must be powerful enough to sustain you when life gets hard. Because it will get hard. Change is never easy and requires a deliberate, concerted effort. On a recent trip to the Philippines, I chatted with some people who’d worked with Uber. They told me one of the reasons for their success in South East Asia was their purpose of ‘changing lives’ and their BHAG (Big Hairy Audacious Goal) of ‘unlocking cities’. In this part of the world, Uber focuses on ride-sharing. You can drive yourself through congested streets, or you can share an Uber. This positively impacts cities, taking millions of cars off the roads and reducing pollution. It’s a powerful message for their staff.
4. Lack of communication around your purpose
What’s the point of having a strong purpose if you don’t communicate it? It needs to be ingrained in your staff, just under their skin. Scratch them, and they’ll tell you instantly. I always think of the story of John F Kennedy and the NASA janitor here. When taking a tour around the facility, JFK asked this guy what he did. The janitor replied, ‘I’m helping put a man on the moon.’ Yes! He had a strong sense of being part of something bigger, which was central to his pride and satisfaction.
Elon Musk had times at Tesla when they had a big order to fulfil. He slept in the office and put up marquees in the car park to extend the production line. His communication of their mission was so strong that his staff doubled down, working night and day until they completed the task. You only get this level of commitment if people are totally on board.
5. Lack of commitment to removing obstacles
There will always be obstacles when you’re going through a transformation. Likely these are things inconsistent with your purpose – ways of operating that don’t make sense to your staff. At a front-line level, they can be seemingly small things. But cumulatively, they will annoy your staff. At Rackspace, we had the purpose of ‘Fanatical Support’, but staff told us our maternity package wasn’t fanatical. We changed it to make it fairer for the female graduates we’d just hired. This involved taking our purpose and applying it more broadly in our culture, internally and externally.
Recently, we advised a client to set up a new email address: ‘stupidrules@’ to help iron out these irritations that can accumulate. Your staff need to see your skin in the game. Your purpose isn’t just empty gestures. You’re committed to the small wins that will start improving your staff’s experience. Knock these things out of the way, and then make sure you communicate that you’ve done them. That’s how you get staff to believe things can and will change (instead of rolling their eyes thinking, ‘Heard that before.’)
One of your obstacles could be pointless meetings. This is so common. Recently, one of our clients had an amnesty where they cancelled all standing meetings. People were told they didn’t have to attend any meeting that they felt wasn’t going to be useful. It terrified some of their managers. But it forced them to put more care and attention into planning – ensuring every meeting had a clear sense of objectives to be achieved.
6. Not planning for short-term wins
With any new initiative, you need to build a sense of making progress. We advise clients to break OKRs into milestones and achievable targets. These short-term wins are important for motivation and must be celebrated.
I think back to my time as MD of IT Lab. We were trying to turn around a business that was falling off a cliff. I got the team leaders to stand up weekly and give three bits of good news. They then handed out a bottle of champagne to someone from another team who had helped them that week. This happened religiously. Everyone celebrated the small wins – a customer was persuaded not to cancel, or we saved a bit of money. This is how you build a winning culture. If you’re going through a huge change, you might want to bring in ‘kickoff Mondays’ and ‘celebrate Fridays’. Pull everyone together at the beginning and end of the week to set the stage and celebrate. This is powerful.
7. Getting to the finish line too soon
Finally, there’s a danger in thinking you’ve got to the finish line too quickly. Like pushing a flywheel, you must go well past where you think it is. That’s the thing with cultural change. It needs to have momentum.
Scaling up is reliant on building the metabolic rate of your business. So that when you stop focusing on a particular transition, the business continues at the pace you want. This is hard. At this point, we advise putting in cross-functional teams, regular meeting rhythms, a new org structure and engagement surveys such as Friday Pulse. Ultimately, your teams must value what they’ve achieved and want to continue moving forwards. Otherwise, all your hard work might have been for nothing.
- NAVIGATING AND COMMUNICATING CHANGE
- BUILDING COMPANY CULTURE
- CHOOSING THE RIGHT OPPORTUNITIES
- ORGANISING YOUR A-TEAM