Business Transformation: Why Most Will Fail – And what’s needed to make it work By Peter Matthies
Amid mounting external pressures, transformation has become a top priority for many businesses. Yet most transformation efforts are likely to fall short. Here’s why — and what leaders can do to increase their odds of success.
In conversations with clients and speaker agencies, we’ve consistently heard that transformation tops the organizational agenda. Given the sweeping changes reshaping our world — from rapid technological advances and geopolitical shifts to the disruption of entire business models by climate change — this comes as no surprise.
Leaders everywhere are being compelled to assess how these seismic shifts will affect their organizations. Still, we predict that few will succeed in transforming to the degree necessary to thrive in the coming years.
One reason for this shortfall is the mismatch between the exponential pace of technological innovation — as described by Moore’s Law — and the much slower rate of change in traditional business functions. It’s even less compatible with the human brain’s ability to adapt. Brian Krzanich, former CEO of Intel, famously noted that if a 1971 Volkswagen Beetle had advanced at the rate of microprocessors, it would today travel at 300,000 miles per hour, get 2 million miles per gallon, and cost just four cents. By comparison, human adaptation is glacial: upgrading a mindset can take a generation. Consider my 98-year-old father, who bought a laptop in 2002 but never mastered email. After each attempt, he shelved the laptop upright — like a book. I navigate the digital world with ease — until I witness the seemingly innate fluency of my nephews and nieces.
Organizations struggle to cope with the vastly different speeds at which change occurs across departments. While technology evolves at light speed, areas like administration, leadership, and finance tend to move at a more human pace — if we’re lucky. The resulting cultural friction is palpable. It’s like a Ferrari trying to tow a go-kart.
It doesn’t take a rocket scientist to see that navigating these massive transformational forces is difficult. But two clear reasons stand out for why so many transformation projects fail. They’re worth highlighting because, unlike external shocks, these are within a leader’s control — and addressing them can make all the difference. […]
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