Towards a self-learning transformation strategy (English version)

Why do we need better management tools for transformation and what does the adaptation paradox mean? transformare means to transform. As leaders, we typically adapt products, rules, systems, processes, etc. when we identify better ways. What makes this particularly exciting today is that in our dynamic environment we need to act before the external change is completely clear. This requires new tools for successful transformation, especially tolerance for ambiguity, a holistic view and a learning strategy. What are proven recipes from actual projects?

Learning with successful partners.

A good transformation strategy requires divergent thinkers from other areas and regions in addition to the key players from headquarters. For example, a supplier, the most innovative component and material supplier, the top-selling sales colleague from China, the country manager of the fastest-growing emerging market, the Nigerian service manager. Why? With partners and executives who are particularly successful in the periphery, it is easier to identify the right trends.

Toxic pressure in headquarters fosters conformity.

It happens time and again that in political elections, victories that were thought to be secure are spoiled on election day by significant losses. Often, this is due to the fact that in the headquarters, people agree on certain interpretations in a self-referential bubble, thereby mutually reinforcing interpretations that are perceived differently outside the headquarters.

As with political parties, this can lead to existentially threatening situations in companies when the world behaves differently than we wish in our management bubble. Many European left-wing parties have sunk into political insignificance like in Italy, France and Germany, because people at headquarters were more concerned with academic issues of their own bubble, while the original clientele struggles with existential real worries. Similarly, those companies who were kicked out of the DAX or Dow Jones usually had different views at headquarters than the market.

From toxic atmosphere to successful adaptation?

All too often, a toxic atmosphere is created at established headquarters that conditions people to follow rules in their own bubble, while executives in the regions necessarily have more interaction with the real world. To be successful, leaders in the periphery are forced to be more aware of the real needs of customers and other stakeholders, whereas for a career at headquarters, higher attention is paid to avoiding mistakes.

A corporate or party headquarters often has the traits of a royal court in this respect: everyone observes who gets applause and appreciation from the higher ranks and who is punished. For middle management, as junior executives and staff positions such as an intelligence chief from dictators, quick adaptation to the current political regime is highly relevant for promotion. The problem is that in more demanding times, the toxic pressure to conform increases.

The more toxic the pressure to conform, however, the greater the risk of missing relevant trends in the outside world. This is where the independent thinker and leader is getting essential for the organization. Every company knows them: the strong sales managers, innovators and regional leaders who are allowed to speak uncomfortable truths. In times of transformation, the support of really good external consultants also can help to create a healthy balance.

The right balance allows transformation .

The well-balanced combination of both, i.e. the leaders in real life and at the royal court, enables a learning transformation strategy. Thinkers in the uncomfortable but accurate role of the indipendent thinker are sometimes misunderstood as troublemakers. Nevertheless, they are particularly valuable and essential for their organization, especially in times of change. Ideally they can be strategically integrated with their insights as co-designers of a proper transformation strategy. This results in dynamic organizational learning – the best path to success in disruptive times.

The strategy must make life easier.

A transformation need usually challenges a formerly successful organization that is currently under intense pressure to succeed. It is therefore important that the necessary change effort is accompanied by a reduction in unnecessary activities. This must already be laid out in a good transformation strategy.

Proactive adaptation of systems is successful if this is planned from the outset. Essential for transformation in organizations: IT, controlling and HR must be represented by powerful representatives within the transformation team. This enables improvements to be implemented quickly and employees recognize that necessary improvements are worth the extra mile to support the change.

New challenges require new leadership competencies.

Responsible managers want to think through thoroughly fundamental changes based on analytical logic. The danger in complex turbulent times is to analyze for too long: Paralysis by analysis. In dynamic transition phases like today, linear thinking no longer works as it did in times of relative stability.

Transformation requires a captain who intuitively grasps the big picture in strong headwinds and charts the right course. Rational competencies that we valued highly in management diagnostics of assessments in the last 20 years are now being outpaced by holistic strategic and communicative competencies. What is needed is the manager who recognizes which major trends require change and asks how to sustainably position his or her organization for them through the appropriate transformation.

Climate change, population growth, aging societies, new global orders – today, a big-picture overview is even more important for smart change than detailed linear analyses. And change is no longer avoidable if we simply want to remain attractive on the labor market. The key question here is: how does transformation allow us to become a desirable employer in the future?

Strategy development is changing.

It is therefore all the more important to clearly distinguish between what are the passing fashions of the zeitgeist and what will allow us to reach the next level of healthy growth. Here, every industry and every company is different, but from our projects we recognize a commonality: In contrast to past decades, the tried and tested methods of strategy development are no longer sufficient. Until now, with a good team of consultants, plenty of man-days and good methods, it was possible to develop a resilient strategy even in a complicated environment. Changing times require better methods. The adoption paradox: We do not have time due to the increasing pressure, so we stick to the known methods of the past.

Those who take outdoor shoes that are suitable for off-road use, those who adopt appropriate methods, have the advantage of early adopters and can position their company for future market leadership. Today, you need methods that master complexity. That can simulate complex system changes in advance. That simply allow you to make the right decision quickly under great uncertainty. And which can quickly test high risks such as new business models, company takeovers and disruptive innovations, in order to be faster on the market and more certain in the decision. And from our projects we can report: this is not only exciting, but also supports personal growth processes and is fun.

Summary

One thing is clear: a good transformation strategy requires proven and innovative leaders and consultants who recognize the right fundamental trends, have the courage to embrace new methods and solutions, master ambiguity tolerance, and keep the team on board with appropriate communication.