Human-Centric Data-Driven Strategies Emerge as Key Success Factors for Business Transformation Initiative
Despite the ubiquitous headlines about business transformation initiatives’ role in ensuring the future success of today’s organizations, too many major change management initiatives fail to accomplish their objectives.
In the post-mortem analyses that ensue, one of the key reasons for these shortfalls revolves around the inability to engage with the people who must execute the changes in behavior necessary to advance the business agenda, says Michelle Kent, a principal in the advisory practice for transformation delivery at KPMG.
“Despite significant investments in time, money and human capital over the months and years leading up to 2020, most leaders have largely fallen short of accomplishing objectives to streamline operations or re-envision how value is delivered by taking advantage of new digital infrastructures,” she explains.
These results, according to Kent, should not be entirely surprising. Most initiatives have tended to focus on technology modernization and process optimization. While there has been much discussion about integrating the human factor into the equation, most initiatives have not persistently engaged with employees -- across all levels of the organization -- in a systematic or meaningful manner.
“We are in an interesting point in history when it comes to the implementation of big change management initiatives, like business transformation. The events that have unfolded over the first half of 2020 have really underscored the importance of responding effectively to drastic changes in the market,” says Kent.
Grappling with the People Factor
One reason the full promise of business transformation -- often enabled by technology modernization -- is being missed is because of a consistent inability to properly inform, motivate and integrate key people and talent.
The issue manifests itself at a couple of levels. While it is extremely important to have strong and effective leadership who can develop a clear vision of what needs to be done, it is also increasingly critical to engage in a rich two-way conversation with all affected stakeholders.
“Major transformation initiatives do not just affect one category of worker in one functional area. They broadly affect organizations. This means that people in the human resources department need to understand and appreciate specifically how the transformation will require them to change. The same is true for the finance people, the sales team, the IT department and so forth. Beyond buying into the general vision, they must develop a clear idea of how they can contribute to the initiative,” Kent says.
Tapping into Data-Driven Strategies For Human Engagement
Many organizations have become quite good at gathering and analyzing information captured in systems-of-record to accurately answer the question: What happened?
Executives have also gotten good -- and are getting better -- at capturing data and analyzing it to understand market trends in real-time to plan production and allocate resources in a rational manner.
Where a significant gap exists in securing the full potential of data-driven decision-making, however, is in the talent engagement environment.
“Data-driven decisions that have to be made in human-centric change management requires answers to different questions. Often, these questions are not about the past and present, but rather about the future. They are about facts and about intentions,” says Kent.
KPMG Change by Design and Change Frame
Addressing these issues effectively is the conceptual foundation behind the KPMG approach to helping organizations implement effective human-centric business transformation initiatives.
The KPMG Change By Design approach provides clients with a structured and systematic way of establishing a two-way dialog with all key stakeholders in the transformation process. As initiatives are designed and developed, KPMG maps out the potential impact on different segments of the organization's workforce with the objective of putting in place systematic mechanisms for engaging employees in the specific contexts of their role in the organization.
“The approach works on establishing a foundation of transparency in which leaders not only share the ‘future-state’ vision for the organization, but also seek and gather input from the rank-and-file -- and other key constituents -- to gather feedback and insight on what needs to be done...or avoided,” says Kent.
This, points out Kent, is not a “feel good” exercise. It is a data gathering process that is designed to inform and influence the decision-making process to accelerate the transformation and optimize the final achievement.
“It is also the best -- and proven -- way to navigate shifts in the implementation process as environmental factors change. It allows senior decision-makers to keep their finger on the pulse of the organization as a whole through a major change event,” says Kent.
KPMG Change Frame is a digital tool that can be accessed from mobile devices, laptops or desktop computers. As organizations engage in a change management project, KPMG works with clients to identify all of the key players that are going to have a role in contributing to a successful outcome.
“The Change Frame application is then provided to these key change agents so that they can be: introduced to the project; kept abreast of progress; and made aware of actions they should take or new requirements they may have to meet,” says Kent.
Change Frame also opens the door for critical feedback. This can take the form of formal surveys to capture structured data, as well as ad-hoc communication mediums for collecting unstructured data -- such as suggestions for improvement, challenges that need to be overcome or insights from associates that may be useful to strategic planners and decision-makers.
It provides “agency” to all involved, and provides constituents with a sense of ownership over the vision that organizational leaders are trying to realize.
“The key to success is to be extremely specific about how the Change Frame application is deployed and used,” says Kent. “When the application is seen as a tool that helps individual participants succeed in their current role -- while creating a better future state -- it elevates engagement and contributes to a shift in mindset that is necessary for changing behaviors to align with the objectives of the transformation initiative.”
A Case In Point in the Consumer Packaged Goods Sector
KPMG is currently working with a large consumer packaged goods (CPG) company that has been in business for over one hundred years. Over that immense span of time, the company’s leadership has had to make significant changes in response to major market developments over the decades that have passed.
More recently, new challenges have been posed by a global move to digital environments. This has created new pressures that have rendered certain practices obsolete and dramatically affected different parts of the organization.
The Change By Design team at KPMG worked on a series of discrete change management initiatives that have applied the principles of data-driven human-centric design to achieve substantial modernization objectives. Change Frame, specifically, was used in a project that moved the organization's entire enterprise resource planning (ERP) system from several on-premises environments to the cloud.
“This was a complex project for many reasons, including the fact that many existing processes had coexisted for decades in incompatible formats,” explains Kent. “To harvest the benefits of efficiency, resiliency and market responsiveness by moving all ERP operations to the cloud, we had to identify and engage critical members of the community of interest, This included all affected employees and stakeholders. We then developed a set of processes, messaging and communication channels that were designed to have the teams embrace new standard operating procedures without ‘breaking’ or disrupting business flow,” says Kent.
This required a tremendous amount of North-South communication (between senior executives and rank-and-file) as well as collaboration among leaders of different business unit teams.
“We had to address the fact that, prior to this initiative, there had not been a lot of East-West interactions between many of these business units,” says Kent.
The teams used the principles of Change By Design and the Change Frame platform to effectively move their ERP operations to a cloud environment, on time and on budget. In the process, the organization unlocked value that has better positioned the company in an increasingly competitive global digital marketplace.
The lessons learned in this process were later applied to revisit the way the CPG organization attracted, recruited and onboarded talent in a tight labor market. With the ERP success under its belt, leaders and stakeholders were able to apply their new change management skills using the principles of Change By Design and the Change Frame tool to dramatically streamline the hiring process.
As new challenges and opportunities for change and transformation are identified, the company’s leadership now has growing confidence in the ability of its team to move through the process in an effective, efficient and productive manner.
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities. The KPMG name and logo are registered trademarks or trademarks of KPMG International.