Ideally, a company's vision is well formulated and the entire organization is aligned behind it. For this to happen, however, that vision must be distilled down to a few well-articulated and teachable points that can be shared throughout the company on an ongoing basis.
Transformational leaders must be able to consistently communicate their points of view to the entire team. This is not always easy as the goal is not always a tangible one. In some cases, a company can grow more dramatically if what it has is more a mindset than a specific strategy. It can remain open to opportunities it would otherwise miss. Where is the company going? What will it look like when it gets there?
It's not always possible to know the answers to those questions and it becomes more about teaching a way of thinking and working. Jeff Immelt, the CEO of GE, spends a lot of time talking with his employees about current strategy. Former Symantec CEO Steve Bennett did this at every Monday morning staff meeting. Communication must be ongoing.
The organization lacks the talent to reinvent the business for transformational growth.
It's critical that transformational leaders be capable of driving fundamental change. If a company does not have the right talent on board, it's important to fix that as quickly as possible. This is true of management throughout the entire organization.
Based on the company's new vision and strategy, a nine-block assessment can be done to chart executive performance, potential and retention value and make appropriate determinations regarding who to keep, who must go, and how to alter the performance metrics. Whether it's from an individual, functional, or business unit perspective, a company's human capital strategy must be aligned with its business strategy.
The organization is not designed for transformational growth.
There's no one right way for a company to be structured. What matters is that the structure is aligned with the strategy. Structure and talent are very closely related. An executive who excels within one structure may no longer be in the right position if the strategy drives a shift to a different organizational design.
One company, for example, needed to become more "outside-in" in its approach and could see that its business unit structure was in the way. The decision was made to shift to a functional design that would be more focused on the markets, competitors and the company's products and services. After 18 months, out of 150 original officers, 70 were new. The old organization just wasn't designed to align with the new strategy.
The organization seeks to transform through a merger or an acquisition.
Many organizations try to transform through a merger or an acquisition, but this is rarely successful. Over a period of 3 to 5 years, the pro forma on the front end just doesn't end up matching the reality on the back end.
For a merger or acquisition to work, it's essential that the new business be effectively integrated into the existing business. This is not easy to do, but one company that does it well is Cisco. It buys a company small and then integrate that company into its grid very quickly. Cisco also keeps the acquired company's leadership in place, which is something many other companies fail to do. Cisco understands that what it is buying is not just technology, but also leadership talent.
The company sees its employees as an expense and not as an investment.
Many companies see their workforce as an expense. When employees are only on the debit side of the balance sheet, the only way to increase efficiency is by reducing that cost. Transformational companies see their human capital as a valuable investment that must be maintained, and developed.
These are two very different mindsets. When the workforce is seen as an investment, the focus becomes taking good care of employees, and helping them become more productive, thus increasing the return on the investment. A company can’t become a high-performance organization without first making this shift.
There is not enough collaboration between divisions.
Collaboration is critical. A company gets the best out of its human capital when its various teams collaborate both locally and globally. This isn't easy and there can be much to overcome in terms of culture, politics, cyber security, talent and cost, but the pay off can be huge.
The tools now available for virtual collaboration offer all kinds of potential efficiencies, but unless the company has a culture of collaboration, it won’t matter. The tools won’t get used.
Symantec had brilliant engineers in India, China, Poland, the U.S., Germany, and Singapore, but they were all scattered among various business units and there was no integration among them, no sharing of best practices. The company could have realized great efficiencies in design and manufacturing, but because it was a hodge-podge of acquisitions and no attempt was made to connect the dots, that opportunity was lost.