12 Feb. 2019 | Comments (0)
Attention marketing and communications professionals: CEOs need your help more than ever.
The Conference Board’s C-Suite Challenge 2019 paints a picture of organizations at a critical juncture as they try to balance long-term vision and short-term performance. Thoughtful, consistent, and clear communications to employees, customers, and partners is the key to making that balance work.
The Conference Board survey asked 1,426 executives, including 815 CEOs, across the world to identify their most critical issues and the strategies they are using to meet them. Faced with an increasingly unstable business environment that is undermined by a lack of public trust, executives see their businesses in continued transition driven by technology and changing customer habits.
The digital transformation of business has been underway for years. It’s been a slow and often painful process as companies have sought to embrace technological change while business model change and organizational change often have lagged behind. Today the gap is more obvious as the pace of technological change is accelerating, conventional wisdom is becoming less relevant, and the need to show short-term results is hindering investment in longer-term strategic initiatives.
When asked what organizations will look like in 2025, executives expressed hope that they could bring the business into alignment with their technical advancements, citing business model innovation that would move from a product focus to a service focus. Executives expect to see new business models, new skills to support those models, a new generation of leaders, a new customer focus, a new emphasis on sustainability, new technology, new levels of employee empowerment and agility, new partners, a new concern with data security and customer privacy – all supported by their current organizational cultures.
If nothing else, we know global executives do not lack confidence.
But that confidence might be undercut by the reality that most change initiatives fail and that digital transformations in particular fail at an even higher rate than more general change.
Why such a poor record? Culture and communications.
Cultural change lags far behind technical change, particularly when transformation projects are hived off to small transformation teams and the rest of the company is focused on legacy operations. Throughout the report, executives raise the conundrum of balancing long-term vision with short-term execution. This bifurcation is exactly how many companies manage digital transformation, running a “two-speed” business that threatens to leave much of the company behind.
While very few companies can afford to abandon their legacy businesses as they build the technology, skills and models of the future, they can take a more comprehensive approach to communications about that transition to include the entire company and its customers. And why not apply new organization models to the entire business, not just the new revenue streams? Perhaps there needs to be both legacy and alternative revenue streams running in parallel for quite some time, but why should there be multiple cultures?
Effective change comes from telling a clear change story, one that is motivating and inclusive in order to build the culture that will support that change. A recent study by McKinsey & Company found that companies that help employees understand where the organization is headed, why it is changing, and why the changes are important are more than three times more likely to have successful transformations than those that don’t.
Internally that could mean sharing ambitious targets and adjusting incentives and recognition throughout the entire company, sharing training opportunities to align skills with the vision, and making visible investments in growth opportunities that can be celebrated throughout the organization. Externally it means communicating a vision that includes customers and new partners in the story because the vision is built around them.
While The Conference Board survey shows executives to be clear eyed about the opportunities and challenges of the next six years, they seem overly optimistic about what it takes to uproot legacy thinking and structures, something they should have learned over the past 15 years of digital transformation projects. You can change technology, change strategy, and change business models, but if you don’t change behavior, you will struggle. That requires a comprehensive communications plan.