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The carrot & the stick - or how to make transformation work!

There are 2 main drivers behind corporate transformations: the carrot and the stick.

The Carrot: Seizing Opportunities

The "carrot" represents the positive aspect of transformation. It occurs when a company identifies an opportunity in the market or within its organization and decides to evolve towards it. This proactive approach can be linked to innovation, strategic vision, or growth potential.

The Stick: Reacting to Threats

On the other hand, the "stick" symbolizes the reactive side of transformation. A company may face external threats, such as competitive pressure, economic challenges, or disruptive changes in the industry. In response to these threats, organizations transform to survive or remain competitive. This is usually when cost cutting and restructuring programs come into play.

The Common Causes of Transformation Failure

Transformation processes often fail for a variety of reasons. The most well-known are picking the wrong strategy, or poor implementation.

However, less discussed and more insidious, is the tendency to "fake it."

The Art of Faking It

This phenomenon is pervasive in the corporate world. It involves dressing up the shop window. It is about creating the illusion of transformation, but not truly changing the core. Declaring success, and keep doing the good-old-things!

...Because when you think about it, at an individual level, why would you change?! Going for something new ("the carrot") is risking to lose what you have today. And remaining in the company while others are let go - you keep your head down and you keep working as you always did, plus you have no time to think ahead and change as you also absorb the workload of those who left.

The Vital Role of People

Successful transformations are not just about strategies, processes, or external factors. They hinge on people's involvement and commitment. For real change to occur, organizations must engage their workforce at a deep level.

The Importance of Dialogue

Open and intense dialogue is at the heart of any genuine transformation. It allows individuals to:

  • Discuss the purpose of the organization.

  • Identify what's not working.

  • Move beyond communication and actively shape new behaviors and working methods.

Transformation Requires Adherence

Transformations won't stick if people aren't committed to change. Pure cost-cutting measures that disregard the human element are quick wins, not sustainable success.

Difficult Conversations are Crucial

Moreover, any significant transformation necessitates tackling difficult conversations. These conversations underpin and guide:

  • The success of your transformations.

  • The innovation processes within your organization.

  • The growth you aspire to achieve.

In essence, transforming an organization is as much about changing its culture, values, and behaviors as it is about changing strategies and structures.

For meaningful and lasting change to occur, it's crucial to engage people, foster intense dialogue, and address the uncomfortable biases within the organization.

In conclusion, the carrot and the stick may drive the decision to transform, but it's the people's conversations that define the success and sustainability of those transformations. Organizations should not just focus on the destination but also the journey, which requires the active involvement of their most valuable asset—their people.

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