UAE President His Highness Sheikh Mohamed bin Zayed Al Nahyan has declared 2023 the Year of Sustainability, which will culminate in November with the UAE hosting the 28th session of the Conference of the Parties (COP28) of the United Nations Framework Convention on Climate Change (UNFCC).

A signatory to the Paris Agreement, the UAE was the first country in the region to issue a Nationally Determined Contribution (NDC), laying out its plan to address climate change, and to pledge to transition its economy to net zero by 2050.1

The UAE also played an important role in the creation of the 2030 Agenda for Sustainable Development and the 17 Sustainable Development Goals (SDGs), adopted by the United Nations in 2015 as a universal call to action to deliver peace and prosperity for all people and protect the planet by 2030.

“Effective climate action requires a shared vision and collective will. As host of COP28, we are committed to fulfilling our role as a global convener and will continue to support action and innovation in the field of sustainability,” said Sheikh Mohamed bin Zayed Al Nahyan.

Why is corporate sustainability crucial?

Sustainability has become a business-critical issue for organisations seeking to manage a variety of emerging challenges, risks, and opportunities while creating stakeholder value. Here are some reasons why businesses should make ESG a key pillar of their corporate strategy:

1. Expanded access to capital
   Enhancing ESG performance allows a company to lower its risk profile, thereby attracting institutional investors and accessing sustainable finance. Banks are also increasingly embedding ESG considerations into their risk assessments and will look to prioritise companies that have an ESG strategy in place. This automatically enhances a company’s ESG rating which enables it to access capital at lower cost.
2. Regulatory demands
   So far, about 140 countries have set proposed net-zero targets. (Net-zero means cutting greenhouse gas emissions to as close to zero as possible, with any remaining emissions re-absorbed into the atmosphere.4) As more countries enshrine net-zero commitments into legislation, these efforts become legally binding.
3. Consumer awareness
   Consumers are increasingly turning towards products and services that are produced in a responsible manner, taking societal and environmental impact into account. More than 8 out of 10 consumers report purchasing green alternatives to reduce their carbon footprint.6 Sustainable business practices can also improve productivity and reduce costs.
4. Business continuity
   Businesses that fail to embrace sustainable practices risk becoming irrelevant in their respective markets. This is especially evident with younger consumers, who favour engaging with sustainable businesses. Companies that embrace sustainable practices can play a leading role in their sector by developing products and services that drive the transition to a more sustainable economy.
5. Talent retention
   Sustainability is increasingly becoming important in hiring as well. 82% of global workers want to work for companies that align with their values and actively seek to meet sustainability goals.

The organisational ESG must-haves in 2023

Embedding ESG can therefore deliver a competitive edge and create long-term stakeholder value. To maximise the benefits, businesses should adopt a systematic and holistic approach to integrating sustainability into every aspect of their business models.

Companies must be prepared to reassess how they do business and transform their operations where necessary. These are the four “must haves” to get started:

One: A clear ESG strategy
A clear ESG strategy allows an organisation’s key stakeholders (including shareholders, employees and customers) to rally around a common vision and mission for a sustainable future. The ESG strategy should include the following key criteria:

• Encompass the organisation’s core values, principles, and purpose, and set out an action plan to improve environmental and social impact.
• Be embedded into overall corporate strategy and day-to-day decision-making and actions. This includes a change management process and governance policies for implementation.
• Set clear goals and objectives that are measurable to gauge progress over time.
• Define how the company reports and communicates progress to key stakeholders.
• Allocate the resources and build the capabilities an organisation needs to achieve its goals
• Include a comprehensive approach to risk management.
• Address how the organisation will engage with stakeholders, including customers, suppliers, competitors, investors, and communities, to build trust and create a positive impact.

Two: Understanding what matters

Companies must develop a clear understanding of the ESG factors that are most material to their business. Ideally this should focus on double materiality.  This means understanding which ESG topics have the biggest impact on their business, as well as how their business impacts the economy, the environment, and society in general.

Three: Measuring current performance

Before charting a path forward, it is vital to have a clear understanding of how the company is performing relative to peers and best practices. Putting in place processes to gather data is an essential first step towards setting goals and steadily improving progress over time.

Four: An actionable net-zero plan

Climate change is the single greatest challenge of our time and a priority for all stakeholders. Companies must be able to measure their greenhouse gas emissions before considering actions to align themselves with net-zero commitments. Ensuring they complete a comprehensive greenhouse gas inventory and implementing systems to accurately measure emissions is a critical step in the net-zero journey.

Organisations should have a robust action plan in place to meet their net-zero targets, which includes a clear timeline for implementation, a budget for investment, communication and reporting plans, and performance management measures. The plan should also be informed by an understanding of the latest technology and approaches for reducing emissions. It should include an assessment of potential risks and opportunities associated with transitioning to net zero.

How Renoir can help

Reynard Limited supports organisations to develop comprehensive ESG strategies and make the shift towards achieving net zero. Our services include:

1. Supporting organisations in defining their sustainability statement and roadmap
2. Conducting stakeholder engagement and materiality assessments
3. Defining sustainability strategy with pillars, objectives, initiatives, and KPIs
4. Building GHG emissions inventory and developing a net-zero plan
5. Providing the necessary capacity-building support
6. Managing organisational culture and change to ensure effective implementation

Contact us today to learn more about our ESG transformation, implementation, and management strategy.

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Digital transformation became a top priority, with companies that didn’t already have solutions in place falling behind in terms of productivity. Without the tools and technology they needed, the quality of their products and services suffered.

Even before the pandemic, DX spending reached $1.3 trillion and $1.2 trillion in 2018 and 2019, respectively. However, the Harvard Business Review estimated $900 billion was wasted on digital transformation strategies that didn’t reach their goals.

The technology needed is out there, but 70% of DX initiatives continue to fail. Organizations need to implement effective change management in order to attain digital adoption and stay competitive.

Mistakes Companies Make During Digital Transformations

There are many potential pitfalls on any digital roadmap. Businesses without the right approach tend to make several common mistakes that can lead to the downfall of their digital transformation efforts and cost them significant amounts of time and money.

Succeeding With Your DX Initiative

To succeed with your DX initiative, you need a plan that will help you navigate past the pitfalls that await you. The right approach relies on understanding your needs and knowing what various digital tools have to offer. These steps can guide you through the DX process.

The Change Partner You Need to Achieve Your DX

Change management consulting firms have a lot to offer, but your organization stands to benefit even more by working with a true change partner like Renoir. We can ensure that you attain the maximum impact with your DX efforts.

We translate strategy into a comprehensive DX program that helps your business achieve its goals. Through initiative-level analysis and planning, we deliver the right tools to meet your needs. Implement faster and more effective DX initiatives with Renoir.

You’ll experience the full benefits of our change management expertise, along with the full support of a transformation management or project management office to execute your plan. Schedule a consultation with Renoir today for more on our comprehensive digital transformation services.

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To illustrate: Let’s say that two companies were given a solid strategy to improve the efficiency of their operations. One ran with it and completely transformed. The company got better and better, and management refined the strategy as time went by.

The second company executed the strategy too. It gained advantages from the transformation programme. At least, for a while. However, after a few years, old habits returned, and all the gains made from the transformation were lost. They will need to start all over again.

Why did this happen?

The culture got in the way. Or rather, the old culture.

Old habits can be as persistent as a stubborn stain.

An organisation may do all it can to create a new culture, but if you don’t maintain the new ways of working, old ways can creep back. This is something I make all my clients understand – it takes hard work to maintain the changes made in transformation programmes.

The mystery of culture

Culture is hard to define and even harder to change. If I had a magic pill to change a “bad” culture to a stellar one, I’d probably be a billionaire. Creating a good company culture takes collective will and determination, and as I mentioned, maintenance.

In its simplest definition, culture comprises a collection of habits. But of course, it is more complex than that.

Picture culture as a pattern of basic assumptions that a group has invented, discovered or developed to cope with challenges, both internal and external.

One of the most common mistakes people make in evaluating an organisation’s culture is to judge it through its “visible parts” such as its products, premises, the way people dress, or marketing slogans and messages.

For example, just because a company has a recreation room filled with pool tables and video games, doesn’t mean that it is a progressive place where everyone can speak freely. Recent headlines denouncing toxic cultures in cool, hip companies have shown how true this is.

For me, personally, the best clue to determine if a company is a great place to work is to visit the shop floor or branch toilets — you can tell an awful lot more about a company culture once you have been there!

Jokes aside, corporate culture is complex and ever-evolving.

An immensely important clue is the behaviour of the people in positions of power.

In a perfect world, company leadership leads by example and “walks the talk”, their actions in sync with company values. Culture can change overnight when a new leader overturns the old way of working. Depending on his or her behaviour, the culture could change for better or worse.

And while you can find clues about an organisation’s culture in its vision, mission, and values statements, that may not always be reflected on the ground.

Many components of culture are invisible, taken for granted, and only understood by company insiders. These are the shared behaviours, values, and assumptions held by a company, and they’re rarely spelled out on a poster in the office.

Things such as, is it okay to speak freely or to express disagreement? Is it okay to ask questions if you’re unsure about something? Is it acceptable to leave at 5 pm, or is it better to leave only after the big boss leaves?

Does this mean you need to transform the organisation’s culture so that it will execute a strategy successfully?

Not always.

Instead, consider the cultural strengths and needs of the business, and root your strategy in it. Does the strategy play well with the company’s current culture? Does the strategy help the business achieve what it needs?

When corporate culture is aligned with strategy, both enhance each other.

For example, a company that prides itself on its innovative products encourages innovation in the organisation by allowing experimentation and a change-oriented culture. Or an NGO that promotes workplace safety, must ensure, first and foremost, that its own workers are safe from psychological and physical harm. 

In a perfect world, strategy is rooted in the cultural strengths of your company and the needs of your business

But the reality is often messier than that.

Designing strategy too tightly around culture may limit your company’s potential, especially if it is toxic and not performance-oriented. Sometimes, the vision you want to achieve requires a complete overhaul.  For example, when a nationalised company is privatised and opened up for competition.

In my experience, a corporate culture that does not support the vision of the organisation needs to be changed. How do we do that? Well, that’s a topic for another column!

Krishna Paupamah has worked with companies globally to transform their business for over 35 years. He is the Founder and Group CEO of Reynard Limited. He can be reached at krishna.paupamah@renoirgroup.com.

This column was first published in Business Today.

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I am a true believer in KPIs. After all, I work on them with my clients every day. Every organisation should measure their performance and keep a close eye on whether they are making progress towards their goals and strategic priorities. However, I’ve seen how badly designed KPI’s or the wrong targets can affect outcomes.

We once worked with a telecommunications company that received a bad grade for its customer service. The puzzling thing was that on paper, the department was meeting its target to resolve all trouble tickets within 24 hours.

We later discovered the reasons why. And it wasn’t due to stellar service. Employees were simply closing trouble tickets that weren’t resolved within 24 hours so that they could “meet” their KPI!

When we looked through their call records, we found one case of a poor man who’d called 15 times for help, but his ticket was shelved each time. Imagine what this was doing to their brand reputation.

Another example was at an insurance company where agents were given a KPI to sell 30 policies a month. Many agents, once they had sold 30 policies, hid extra policies sold and only submitted them in the beginning of the next month because there was no incentive to sell more than 30 policies a month.

Although the employees at the insurance and telecommunications companies technically met their KPIs, in one instance they were damaging the business and in another, they were not motivated to perform beyond the target.

This is one of the problems with incentives and KPIs. If there is a cap, people often just give up when they reach it.

But the most dangerous result of badly-designed KPIs is when it gives a company a false sense of security.

Disguising the truth

In the course of my work, I have had clients who proudly boasted that they were performing at more than 100%.

This usually makes me suspicious because even the most advanced oil refineries on the planet struggle to reach 97%. And most process industries hover around 80% to 90%.

When a process plant is running at greater than 100%, what we find is that the equipment has been modified or upgraded for more output, without changing the measurement standards. And as a result, everyone is bamboozled, including the CEO, believing that the company is killing it with fantastic performance.

In one process plant that claimed that they had 110% efficiency, a technical impossibility, we found out that they just had their equipment upgraded. However, they hadn’t upgraded their expectations. When we fixed the standards, the equipment was actually running at around 75% efficiency. Comparing the performance of the plant after the upgrade with pre-upgrade numbers did not give them the true picture of how badly the plant was actually performing.

Unfortunately, we also encounter companies fudging the numbers – it can happen in all sorts of industries, and the consequences can be disastrous.

Let’s take the construction industry.

In construction projects, cash flow is based on the completion of building quantities. It can be measured with measurements such as tonnes of steel and miles of pipework.

Some commercial teams overclaim on the quantities early in the project to ramp up the cash flow to make it look like the project is profitable and doing well.

But then what happens when you get to the later stage of the project? There are no quantities left to claim, so, the project starts running out of money – and this is when we start to hear of budget overruns and unexpected delays et cetera.

This is short-termism and hiding from reality – all in the interest of cash flow. If they had controlled performance and tackled the fundamental problem of cash flow from the beginning, the chances of hitting their targets would be improved.

The human factor

Every organisation wants to set KPIs that incentivise employees to perform better.

However, badly designed KPIs may end up reinforcing the wrong behaviours, as we have learned. This can lead companies down the rabbit hole of lost productivity, bad morale and ruined reputations.

While it’s important to consider whether KPIs align with your strategic goals and whether they are achievable targets, it’s important to evaluate how it will impact the behaviour of your employees.

How do you want them to perform? Are your KPIs encouraging that good behaviour… or are they making them act in ways that will result in bad outcomes?

It can be challenging to predict human behaviour, which is why I believe KPIs should always be monitored and changed when the situation demands it.

Krishna Paupamah has worked with companies globally to transform their business for over 35 years. He is the Founder and Group CEO of Reynard Limited. He can be reached at krishna.paupamah@renoirgroup.com.

This column was first published in Business Today.

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Organisations worldwide, including finance departments, are using data to boost the efficiency of existing processes, drive operational costs down, achieve strategic excellence, and monitor and improve performance. And according to a study by the Business Application Research Centre, they are gaining benefits from big data such as better strategic decisions, improved control of operational processes, an increase in revenues and reduction in costs.  

Digitising transactional processes have productivity benefits associated with them and can also help create new datasets for analytics, which in turn enables finance functions to deliver new rapid insights. This can elevate the function’s relevance and value to the organisation. However, the right groundwork needs to be put in place for the transformation to take root. 

The power of data 

Data analytics is a broad term that encompasses a plethora of diverse techniques and processes which draws insights from financial and non-financial data to improve operational decisions that are critical to an organisation’s success.  

By digitising fit-for-purpose processes with cutting-edge technologies, finance functions can provide organisations with easily accessible and transparent data and reporting. 

This in turn will give organisations the capability for data-driven decision making, which will enable a more forward-thinking and agile finance function.  

For example, when finance organisations automate their processes, they can free siloed data and allow for increased data sharing between all departments within the organisation. 

With data analytics, KPIs can be identified, measured, improved, filtered and arranged according to what’s most relevant at any needed time.  

Process digitisation can also increase workforce productivity, which in turn improves cost efficiency. Transactional processes, for one, stand to gain the most. 

The challenge of data 

One of the biggest data challenges faced by organisations is turning the deluge of raw data into actionable insights. CEOs and CFOs are looking for quick, easy, and automated ways to obtain them.  

To truly extract value from their data, organisations must address the following challenges: 

• Regulatory compliance  
  Finance functions must fulfil stringent regulatory requirements.  

• Data security  
  Data governance measures can help mitigate risks common in finance such as hacking, unauthorised access, corruption, and theft. Top-tier big data management tools can help ensure that data is secure, protected and monitored. 

• Data quality  
  Organisations want to do more than just store data. Extracting value from unstructured data sets requires collating and compiling various sources of information. 

• Data silos  
  The inability to connect data across departmental and organisational silos is a major business intelligence challenge, leading to complicated analytics that stands in the way of big data initiatives. 

• Data usage 

American astronomer Clifford Stoll once said, “Data is not information, information is not knowledge, knowledge is not understanding, understanding is not wisdom.”  

One of the biggest shortcomings of digital initiatives is the failure to use the technology. Despite all the hype about artificial intelligence, human intelligence is still required to interpret data, identify gaps in performance, establish root causes and actions, and to see that the actions are executed successfully. This requires much more than installing an app to fix. 

Regardless of the challenge, organisations must thoroughly define their overall data roadmap — one that lays the groundwork for how data is handled and its role in helping the finance function address its issues and shortcomings. 

The roadmap should include: 

• Systems or structures to capture data 
• A communication plan to obtain buy-in from employees so that they can understand their role in a data-driven organisation 
• A plan to fill missing skillsets and capabilities to interpret and develop data-driven insights 
• A strategic plan to collect, organise and use the right data in a way that will add value to the organisation 

As different organisations have different ideas of what they want from their finance function, the roadmap will be unique for every organisation. Some organisations may want the finance function to be more proactive and focused on analysis or planning. Others may require their finance functions to be more transactional, or they may find a need to reduce transactional and reporting activities and shift it towards higher-value activities such as strategy or decision-making support. This may call for process reengineering.  

By taking a strategic approach towards data, the finance function is well on its way to becoming a proactive partner that delivers value to the organisation. 

However, while data and analytics is a great enabler, finance transformation also involves transforming systems, processes, the organisation structure and the culture of the finance function itself to be successful.

Discover the framework to implement successful finance transformation in our white paper, Winning Finance Transformation: Harnessing the Full Value of the Finance Function. 

The post Maximising the value of finance functions through big data appeared first on Reynard Limited.

Typically, companies embark on a benchmarking exercise to see how they compare with other companies. They hope that by doing so, they can gain magical insights on how to improve their performance. Unfortunately, in my experience, almost every company that tried benchmarking will spend a lot of time and money only to end up frustrated with the results.

I’m not saying that benchmarking is entirely pointless.

Some key industry benchmarks are important – especially when it comes to competitor analysis. A company must always be aware of its position in the market.

In the book, The Game Changer, Alistair Gray described how General Motors (GM) discovered that a Toyota assembly plant could stamp one model to another in eight minutes. GM plants took eight hours. Obviously, this was something they had to improve.

However, benchmarking usually works best in very narrow fields. For example, in the oil and gas industries where the benchmarking is often extensive. Even then, it is focused on refineries because their performance can be easily measured.

But outside of this, benchmarking often ends up being a waste of time.

For example: How many people should we have in a Human Resources department? How many days should it take to come up with a new marketing campaign?

Benchmarking these will be a futile exercise because every company’s marketing or human resources departments are set up differently, so it will be pointless to compare one company with another.

Why benchmarking may cause more problems

Benchmarking can indeed highlight performance gaps. But as I mentioned before, it only works in certain situations. Often, benchmarking causes more problems.

While benchmarks can easily be obtained from trade associations — there are even benchmarking services — the data is often outdated. Also, they are often not relevant to the company’s unique situation or context. Would it make sense to compare the performance of a race car with a city vehicle? Yet, that’s what many companies end up doing. Another argument can be made: Do you really want to be like your competitors or differentiate yourself from them?

Secondly, it sets everyone on the defensive. You can end up in endless, pointless discussions as executives try to defend why they are not where a benchmark said they should be.

Benchmarking exercises are often time-consuming and expensive. Assembling the appropriate data in the required manner takes a lot of time and expense.

The other problem with external benchmarks is fraud. Numbers can be easily massaged to give the appearance that the company meets industry standards while it hides massive internal problems. The Evergrande Group in China built housing using more debt to give the appearance that it was growing. It was only when Beijing insisted on some healthy benchmark levels that the practices inside Evergrande were said to be corrupt. In reality, Evergrande shouldn’t have needed an external benchmark to do this.

They should have been looking internally to drive healthier practices.

It is far more effective to use an alternative approach: Measure current performance against the results that the company wants to achieve. Meaning, conduct an internal benchmark.

This means measuring the company’s current internal performance and set targets are challenging to achieve. Identify improvements to be made and work towards the goal. You’ll make much more progress this way than trying to compare yourself externally because that’s a very difficult thing to do.

A company should continuously improve, tweak and refine performance so that it becomes a better version of itself. That’s the better way forward.

It’s human nature to want to compare yourself to others. Perhaps that’s why we see the same desire in companies. However, as they often say in self-help circles: Don’t compare yourself to others. Instead, strive to be better than you were yesterday. In other words, be the best version of yourself. This, too, is true for companies.

Krishna Paupamah has worked with companies globally to transform their business for over 35 years. He is the Founder and Group CEO of Reynard Limited. He can be reached at krishna.paupamah@renoirgroup.com.

This column was first published in Business Today.

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One of the primary reasons was with the senior leadership team. Some of them were reluctant to experiment with something new, and, as a result, were not participative in the digital transformation. It goes without saying that the lack of leadership involvement certainly sent the wrong message to the rest of the organisation. 

This is an example of one of the most overlooked and undermanaged elements of digital transformation programmes – the “human factor”. 

Without buy-in at all levels of a company, employees often resist change or fail to fully adopt new, digital ways of working. This results in many organisations not being able to reap the full benefits of their digital transformations.

To nip this in the bud, leaders must answer the following questions:

1. Do we fully understand the need for change? 

Are your business challenges clearly identified? 

Aside from classical strategic concerns, such as service and/or product offerings versus the competition, many business leaders struggle to clearly describe their digital strategy. 

Without a digital strategy, digital transformations may not take shape, get procrastinated on, or if they do, end up poorly aligned with the organisation’s real needs. 

Digital strategy formulation involves both external analysis and internal analysis, as well as serious consideration for tactical issues.  

A starting point is to clearly outline the issues across all areas of the organisation in at least three dimensions:

External Analysis, which involves understanding: 

• What evolving technologies are relevant and where are competitors on this landscape? 
• How prepared is the organisation to receive new technologies? For example, is the required IT infrastructure (both hardware and software) in place? 
• When would be the best timing for new digital ways of working to be introduced? 

Internal Analysis, which involves the usage of existing technology: 

• To what extent are process still manual in nature? For example, are requisitions still triggered manually?  
• Is technology used to manage resources? For example, is planning still largely a manual/reactive process? 
• How well do existing technologies work together? For example, are employees logging into and out of different systems, are reports generated manually in Excel by exporting and combining data sources? 
• How well is technology used to manage performance? For example, do we have visibility on our sales force efficiency? 

Tactical Analysis, which involves the tactical issues bogging down an organisation: 

• How is the digital accountability within functions and across the whole organisation? 
• How good are the digital competencies of employees? 
• How is morale among employees? How willing are they to change?

2. Do we have a clear vision of our digital future? 

How will the digital solutions solve the organisation’s challenges? 

Once the analysis is complete, leadership must pursue a structured evaluation to arrive at what digital transformations are necessary to address genuine business needs.  

Leadership must answer questions such as: 

• How will the available digital technology solve the organisation’s problems? 
• What are the expected Returns on Investment (ROI)? Is there visibility on the ROI? 

• Are the digital solutions primarily used to prevent an unwanted outcome? How accurate and reliable will they be? When problems are being solved with the new digital solution, even simple ones, hope and confidence will follow. Fear and skepticism will be reduced.  

Digitalisation benefits must be clearly articulated to everyone. Doing this will help your digitally averse people gain confidence in the digital transformation programme.

3. Who are your ‘digitally averse’ people? 

Is it the whole organisation or just the senior management team? Is this problem particular to a department, such as manufacturing, sales, or finance? 

Typically, any new idea divides people into one of these groups: 

• Enthusiasts (15%) 
• Undecided (70%) 
• Skeptics (15%) 

In an oil and gas company I worked with, although the technology team was convinced of the benefits of a digital transformation, the operations team were sceptics. By identifying the source of resistance, we were able to develop appropriate strategies to transform them from resisters to adopters. To turn this around, we over-communicated the benefits of the programme and shared proofs of concept and success stories.

4. Are you managing the change process?  

Any organisation that has ever attempted a transformational journey would agree that the success of transformation was a function of both technical and tactical actions. 

Organisations are generally geared to focus on the technical aspects and neglect the tactical ones, such as upfront communications and identifying and enforcing responsibilities and accountabilities in the new digital ways of working, starting with the leadership team. 

With a digital strategy in hand, leadership plays a vital role in involving, promoting, inspiring and engaging everyone in the organisation. 

Although leaders understand the importance of “solution acceptance”, many do not understand how to bring about a high level of acceptance. I often hear leaders say that to bring about acceptance, more training is required. In my opinion, this is only partially true. Many organisations spend millions training their employees, yet digital adoption rates can still be very poor. To truly bring about acceptance, organisations must think beyond just training. For example: 

• Digital deployment involves having an action plan attributed to individuals (not teams) so that there is clear-cut accountability. 
• Programmes should have evaluation mechanisms that quantify and track digital adoption. These should be published to highlight the leaders and laggards. 
• The digital journey must also have continuous governance – senior leadership’s time and attention must be preserved all the way through to full adoption. When senior leaders fail to engage, programmes slow down and may even stop.

5. Are you celebrating success? 

A successful digital journey should result in significant benefits. However, many organisations fail to celebrate – no feedback can be worse for morale than negative feedback, and of course, positive feedback is best. 

A lack of celebration may impact morale and depress innovation. This may eventually push high contributors away and discourage fence-seaters from participating in future efforts. 

Significant contributors to the change, or the users demonstrating phenomenal results, should receive due praise and thanks.  

In one of my projects, the company decided to give 50% of the financial benefits back to the employees. This generous act resulted in phenomenal enthusiasm from the workforce and outstanding growth for the company in subsequent years. 

Bringing about digital change requires careful planning and execution – involving and supporting the workforce throughout the journey. Digital transformation done well brings about financial and operational improvements, as well as increased employee morale – all ingredients for future success.

* We take client confidentiality seriously. While we have kept the brand anonymous, the results are real.

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The CEO responded, “Why is it the job of the consultants to sustain performance after they have gone? They aren’t going to be around!”

The CEO got it right: It is misguided to believe that change will be sustained once you’ve finished a transformation programme if you don’t do the work. 

Transformation programmes are vital. But even the best-designed processes, training and organisation designs will not guarantee the new ways of working will be maintained. To maintain change, one needs to be vigilant in motivating employees to stick to using new processes, methods, and tools.

Let me give you an example.

I’m a salesperson. I’ve been trained to use a particular sales pitch. I realise that the new way of work gets me more sales, so I’m more motivated to carry on with the method because it works. This is called “intrinsic motivation”.

On the other hand, if I’m being told to produce a report that nobody looks at and doesn’t help me sell, there is a high likelihood I’m going to stop practising that change. It’s because the report is not aligned to my intrinsic motivations – it’s for someone else’s purpose. The only reason I’ll carry on producing the report is if my boss is breathing down my neck, telling me: “I still want to see that report!”

In a perfect world, every worker would be intrinsically motivated to do every task, but in the corporate arena, we know that there are things we do that may not directly help us in our work, but they are still very important to the organisation.

And this is the dilemma we have with long-term sustainability: the changes which are intrinsically motivating, the ones that will directly benefit employees or help them work better, will stick. But a lot of changes require extrinsic motivation, so it lies on the shoulders of somebody else to follow up and make sure that the changes stick.

Many change initiatives fail because, post-project, leadership failed to ensure that the changes were sustained as they were distracted by new initiatives or agendas. As a result, anything that was not intrinsically motivated in the transformation programme may eventually die off.

One company we’ve worked with, however, was very successful at monitoring any fall offs. A huge factor in making that happen was the fact that the KPIs were perfectly aligned to business objectives and any issues with extrinsic motivation were quickly picked up through performance measures.

Making transformation stick 

Every transformation programme has bits that stick, and bits that don’t stick.

Ultimately, leaders have to recognise that certain parts of any change process require extrinsic motivation permanently to be sustained. If follow-ups don’t happen, performance will inevitably drop.

In our experience, extrinsic motivation routines take a long time to be embedded in an organisation. Research says that the average timeframe is about two to three years. 

One of the best ways to embed these routines is to digitise them. 

Over time, leadership will change, and employees will come and go. As a result, agendas will change too as the new leadership looks at different things. Embedding the change in a digital solution helps ensure that best practices won’t leave the organisation when employees leave or leaders change. And as digital systems often come with automated reminders, if tasks are not done, automatic alerts can trigger someone to follow up.

Basically, when the digitisation of changes is implemented correctly, it makes it much harder for people to evade best practices. 

Aside from digitisation, another solution is to have resources dedicated to “keep an eye on the ball”—this is often called a Project Management Office (PMO). Not only can they ensure past changes are sustained, but they can also seek new opportunities for change.

The focus on new opportunities for change interestingly helps sustain past change as well. When seeking more change, you invariably end up checking on the past changes as well. 

I’ve had the privilege to revisit some of past clients many years after we’ve worked on a transformation project with them. I notice that the clients that did best were the ones who digitised the changes and maintained a PMO function that monitored sustaining change. 

Another client scaled up their PMO office group-wide post project and they have enjoyed record-level KPIs ever since.

Conclusion

There’s no silver bullet when it comes to the long-term sustainability of change. To ensure that your business transformation is “sticky”, you will need to recognise that there are post-transformation obligations to be followed.

To quote famous yoga teacher BKS Iyengar, “Change leads to disappointment if it is not sustained. Transformation is sustained change, and it is achieved through practise.”

How can your organisation practise sustainable change?

Krishna Paupamah has worked with companies globally to transform their business for over 35 years. He is the Founder and Group CEO of Reynard Limited. He can be reached at krishna.paupamah@renoirgroup.com.

This column was first published in Business Today.

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