The need for rapid transformation in today's competitive landscape is clear. Yet when I suggest a 90 day model to accelerate organizational change, the typical reaction is a skeptical, "There is no way an organization can transform that quickly."
I'm Behnam Tabrizi of Stanford University. For over ten years, I have led research aimed at uncovering why some organizations have successful transformations and others do not. We have found that successful initiatives have four common characteristics.
First, the effort is all-encompassing. Every aspect of the business is diagnosed, including culture, strategy, cost-cutting, organizational structure, and processes.
Second, the effort is integrative. Organizations synchronize tight collaboration across functions and geography. This means a massive all-out effort to develop cross-boundary synergies in parallel.
Thirdly, successful transformations are fast. When an effort is both all-encompassing and integrative, the organization can create new value quickly by bolstering organizational momentum and enticing prioritization, while reducing downtime and hand-off periods.
And finally, successful efforts have full and passionate commitment and buy-in - especially at the top level of the organization. Our research shows that rapid transformation is indeed possible.
The research of the "Rapid Transformation" book is based on a ten-year study of over 500 companies such as IBM, GE, Procter & Gamble, Nokia, and 3M and really demystifies what rapid transformation is all about. It shows that if you want to achieve rapid transformation, a lengthy piecemeal and serial change does not work.
More and more what we have is, we're living in a hyper-competitive world. We're also living in a world where innovation cycles are being reduced. So the changes within companies have to be able to be shorter than the changes occurring outside the company, if you will. Therefore rapid transformation is very critical so that the company could beat the cycles of change that occur outside of the company.
Dennis Donovan, who was a top executive at GE, later went to Home Depot, told me that it used to be that if you were an eight-cylindered type of organization, you could run one cylinder at a time. Now we can't afford it. We have to run in all cylinders at the same time. So it's very critical to really massively change your organization in parallel and to be able to be quick.
To get people excited about the transformation is you bring in people to the transformation process and you get them to actually choose and decide the path that the organization is going to go. Just imagine, you bring in someone with five or 10 years experience, someone who has done really well but they haven't really been moving up the organization, but everyone thinks he or she could be great leader, you bring him in to the top of the organization and say, "You help us, you become the thought leader for us, so that we know what path to take." That brings up a lot of passion. At the same time you might bring some senior coaches from outside so that they will give feedback to these people on just how they are doing, they will give them tools, they will give them the methodology and they will help them in the process if you will.
The way these rapid transformation teams work is, for every area of the business - such as strategy, operations, marketing and so forth - you will have one team leader and you will have a number of people that will report to these team leaders. And you will pick them from some of the key people in their organization who are thought leaders, if you will. You will flatten out their organization, you break down the boundaries that exist in their organization and you enable these people to work in a great playing field, if you will.
What you have at the end is an environment where these people could flourish and not only that but you could also create a situation where many of these people could actually be leaders of the new reorganization that occurs at the end of the transformation.
There are several phases to the transformation model. One is the pre-transformation, when the organization gets ready for the transformation planning model. The second phase is a diagnosis model, where you actually test every part of the organization and you basically do MRI, CAT scan, every kind of test that you could do. There are tools actually given in the book that you can actually use to diagnose your organization.
The next phase is "Envisioning the Future". In this phase, the cross-functional rapid response teams come up with a blueprint for change. So they come up with a vision of what exactly needs to be done in terms of the new organization, new culture, new structure and new operation of the company.
That's followed by "Paving the Road", where the teams come up with a detailed plan of exactly what needs to be done in the follow-up to the planning phase, if you will. The final phase is the implementation phase, where everyone who's been the author of this transformation would get involved in implementing the change.
One of the things we've done in this book is that we've paired up successful companies versus unsuccessful ones during the same period. For example, we've looked at Apple from 1997 to 2001-2002. We've also looked at Sony during the same period. What we've found is that Steve Jobs brought an amazing sense of urgency to the Apple organization, revamping the entire management team including the board and really bringing in the customers inside, listening to the customers and coming out with great products that were followed by things like iPod, iPhone and so forth.
On the other hand Sony was only interested in cost cutting, so most of their effort was really cost cutting and most of the change effort that they did was serial, if you will. Therefore Sony was not successful and Apple was amazingly successful.
A successful transformation, number one, it's critical to have the top management of the organization bought into the change process. So, the key thing first is to make sure that whoever is going to be a transformation leader really wants to make the transformation and he or she has the right coalition to be able to support him, to be able to be successful, if you will.
The second thing is really to rally people around and make sure that you create these rapid response teams so that they could actually own the change once it's implemented, if you will. Third, they need tools. The book actually goes through very detailed processes and it goes through every methodology that's needed to have this rapid transformation.