Guide to change: Succeeding in business transformation

Most transformations fall short of expectations, often through a combination of employee resistance and a difficulty capturing value when it’s time to scale. Our research suggests that as many as 70% of digital transformations fail, while 60% of ERP transformations don’t produce their intended results. These statistics underline a broader issue with how enterprises adapt to changing landscapes—and explain why many businesses are struggling to capture the full benefit of technological progress in such groundbreaking times. 

As we’ve found at IBM Consulting, four factors impact a digital transformation’s potential for success, regardless of the technology deployed:

1. The level of an organization's readiness

2. The quality of its employee experience

3. The alignment of its operating model 

4. How effectively it tracks its value over time

By attuning to these four variables, clients embarking on a wide-ranging business transformation capture ten times more value than they could from any technological transformation alone.  

As AI has upended the corporate landscape, it’s clearer than ever that businesses need effective and holistic organizational change management systems to keep up with the pace of progress while generating substantial returns. This means moving from adopting new technologies as singular ad hoc initiatives to building technologies deeply into an enterprise as a platform for success. It also means designing strategic transformation plans around people rather than specific tools.  

To successfully manage change, leaders must be deeply aligned on their vision but prepared to embrace ambiguity as it arises. They must work to establish a culture that prioritizes user behavior and continuous improvement. And they should always remain laser-focused on engaging employees, inspiring a culture that embraces new ways of working. 

No matter what kind of transformation your business experiences, these change management tactics can help your organization succeed.  

Many of today’s leaders remain hyper-focused on technical challenges without seeing the big picture. Incremental tech transformations may feel more manageable, but they’re unsustainable in a world where disruption is the only constant. And the reward for embracing new ways of working across an entire enterprise are significant. We’ve found effective change management increases revenue growth up to 22%. 

This means proactively addressing change before it happens and prioritizing the practice of organizational readiness —a practice that facilitates employee self-direction and buy-in, recognizes the new skills that are required and how to develop them, allows leaders to delegate tasks with confidence and values a culture of continuous innovation. 

Putting change management at the center of enterprise strategy happens at each one of the three stages of a technology program: program planning, technology implementation and adoption. 

During the program planning stage, for instance, this means an organization designs a roadmap explicitly addressing how to best engage employees, customers and other stakeholders in transformation. It might also identify specific personas within the company, performing a change impact and readiness assessment to identify how each persona might be assisted to best engage with new roles.  

During a technology implementation, an effective change management plan will include prioritizing skills necessary for future operations and simultaneously crafting next-generation organizational design. 

As transformation is adopted and scaled, leaders focus on increasing users’ comfort with new processes. By proactively addressing change and putting it at the center of strategy in this way, businesses minimize future operational disruption and create profoundly agile teams.  

The most effective businesses aren’t top-down, but co-created. To truly embrace change, it’s crucial to align key stakeholders, employees and executives to speak with one voice. As we’ve found, many businesses lack consistency when it comes to communicating changes to employees, both between departments and across locations. 

Timely and accessible communication campaigns help to foster a sense of ownership and clear expectations, particularly when they reach employees dynamically, across channels. Further, to foster a transparent workplace, leaders should prepare to telegraph not just what’s expected, but why particular expectations are being set. This helps set a change-minded tone for the workforce and gives an enterprise-wide sense of ownership over new initiatives. 

In practice, this might mean developing a detailed communication strategy early in the planning process, and tracking the results of employee comms regularly to maintain workforce momentum. As we’ve found, assembling a cross-functional team of senior leaders to act as transformation advocates can provide clarity and cohesion in the workplace. This kind of leadership-level engagement increases performance across an organization, while active sponsorship drives change down through the organization, fostering smoother execution. 

Without skilled and engaged employees, even the most exacting leadership plans fail. As we’ve found, employees adopt new business technologies and structures 34% more often when employee engagement is at the center of transformational design. Thus, it’s critical for businesses to actively facilitate skill development and employee well-being. 

Often this means creating employee-centric experiences, such as personalized courses or purpose-built, individualized employee engagement experiences. A diverse approach tailored to different learning styles and preferences can help ensure that no stakeholder is left behind. Workshops, mentoring and coaching campaigns provide employees with messaging that speaks to their preferences, while reward and recognition programs foster a sense of pride. With more motivated employees, organizations can institute a culture of support for new initiatives, no matter what the future brings. 

During a wide-ranging business transformation, multiple changes happening concurrently makes effectively gauging progress impossible for any single corner of an enterprise. Thus, it’s critical to develop systems capable of continuously measuring a strategy’s development and impact. 

Generating insights about workforce momentum, sentiment and engagement are easier than ever. We recommend a data-driven, structured approach to measuring ongoing change initiatives’ value. 

Measuring transformation requires a blended approach, collecting both qualitative and quantitative data. It might involve gauging employee sentiment using surveys, or facilitating open discussions about the change program through focus groups. By mining systems logs and analyzing the results, some enterprises track adoption early in the change process, or gain insights into how and when the workforce uses new tools. This provides real-time feedback to measure the effectiveness of the change management process, identifying points of resistance or communication gaps. And, with technologies such as AI assistants, organizations can now actively listen to employee feedback while simultaneously collecting actionable, analytics-ready data. 

These data points, taken together, allow for an iterative change management strategy that constantly evolves to meet every employee’s needs. With continuous support for stakeholders and data-driven monitoring, an enterprise can reduce resistance and ensure smoother transitions across a business.  

More than any single technology, effective organizational change management practices determine a business’ future success. In an environment that’s constantly shifting, developing the right mindset and enterprise-wide behaviors minimizes disruption no matter what uncertainties arise. This involves a paradigm shift in which businesses put change management first. By focusing on user and employee experience, communicating explicit leadership buy-in and using technology to continuously measure an initiative’s success, leaders invest in value that consistently builds over the long term.