Six drivers to make your transformation a success

To build value through transformation, organizations must put humans at the center of their agenda.

In brief

• The capability to continuously transform at speed will be core to business survival and success.
• The transformation success rate nearly doubles when you put people focus on the same level as technology and process.
• EY has identified six key drivers of a successful transformation, all putting Humans@Center.

Although organizations often declare their dedication to lean, agile, and transformation, research indicates that up to 70% of transformational initiatives falter. This occurs despite technological advancements, innovation, and organizational development. The reason for this, as demonstrated by scientific evidence, is that change management within these organizations does not prioritize the key success factor: people and their emotions. To achieve a successful transformation within an organization, a leader must possess not only a high IQ but also a considerable amount of EQ.

Over the past three years, many companies have come to realize that embedding the human aspect permanently within the organization and its operations is critical, rather than just paying lip service to it. Previously, the emphasis was on implementing new processes and technologies, KPIs, and other "hard" elements. While emotional safety, leadership, and the right approach were on the agenda, they were often just buzzwords and not an integral part of the organizational culture. However, the COVID-19 pandemic changed this perception, as employee wellbeing became a crucial issue, and workers began to expect more from their employers. Who would have thought that working from home three days a week would become a reality before COVID?

Facts & figures

We applaud the shift towards placing humans at the center of organizational transformation because, all too often, when EY is called in by a company, it is to address issues that should have been addressed from the outset. In hindsight, people realize that they should have prioritized the human element much earlier, resulting in setbacks or a lack of adoption. For example, when a new digital tool is introduced, IT is typically responsible for its implementation. However, after a year of rollout and implementation, management may conclude that the tool is not being used correctly or is unpopular. This leaves them wondering why. Perhaps people do not understand the tool's purpose or lack enthusiasm for it or the skills to use it effectively. In short, negative emotions surround the tool.

While we have always understood the importance of people in business and technology transformations, EY's research with the University of Oxford has provided concrete data to support this claim. We can now demonstrate to companies that technological innovation alone does not guarantee successful transformation. To achieve sustained organizational change, a people-centric approach is essential. Placing humans at the center is the key to success. People should not only be involved in transformation projects, but they should also be at the heart of them.

The study conducted by EY and University of Oxford was extensive, surveying over 2,000 individuals from various small and large organizations across North America, Europe, and Asia, ensuring a balanced cultural representation. Both leaders and employees were equally represented, as the challenges of a people-centric approach apply to both sides. Additionally, there was a balanced representation of successful and unsuccessful transformation processes. The research revealed the crucial role of human emotions in the success of a transformation project, and identified six specific drivers that can increase the success factor of a project by 73% or 2.6 times. These drivers serve as the building blocks of a people roadmap within transformation projects, providing practical guidance for companies seeking to prioritize their people during transformation. 

Technology as an enabler

The fifth driver is utilizing technology in a purposeful and positive manner to make change tangible. The key is to develop technology that is stimulating and captivating, prompting individuals to engage with it in unprecedented ways. For instance, instead of merely testing ERP transformation initiatives by integrating them, consider having employees play ERP simulation games collectively, allowing them to experience the technology firsthand and engage with it directly. It's also essential to involve employees in the testing of new tools and systems, rather than solely relying on project team members, and to gather feedback from them. Furthermore, tools that facilitate open communication and feedback, such as chatbots or basic collaboration platforms like Menti or Mural, can be beneficial.

The sixth and final driver,which is often challenging for organizations, is empowerment. This involves granting autonomy, encouraging experimentation, utilizing incentives, and acknowledging that change is a cyclic process of progress and regression.

The emotional journey and curve is inevitable, but it can be managed by focusing on the six drivers. Changing behavior takes time and effort, so it's important not to neglect the people involved after the project is completed. Leaders should continue to focus on changing behavior and respond to it in a targeted way. Success lies in paying attention to the emotions of everyone involved, including the leadership, and companies must change their approach to change by integrating EQ and IQ. By leveraging the power of human emotions and behavior, organizations can achieve success and expedite the transformation process.

EY adopts a customized people roadmap and activity plan, which integrates the six drivers mentioned earlier and aligns with your transformation plan. By doing so, you not only prioritize your workforce, but also boost the likelihood of success by more than 70%.