- Transformations that put humans at the center are 2.6 times more likely to succeed
- Underperforming transformations can increase the emotional strain on the workforce by 136%
- 67% of respondents have experienced at least one underperforming transformation in the last five years
- Research identifies six key drivers for transformation success
The complex factors that influence the success or failure of a business transformation are rooted in human emotions, according to research from EY and Oxford University's Saïd Business School based on a survey of 935 senior leaders and direct reports, as well as 1,127 workforce members from 23 countries and 16 industry sectors.
Leaders who prioritize workforce emotions in their transformations are 2.6 times more likely to be successful than those who don't, according to the research. In addition, more than half of respondents (52%) in high-performing transformations said that their organization provided them with the emotional support they needed during the process. Conversely, the emotional strain on the workforce increases by 136% during an underperforming transformation.
Successful transformation is critical for organizations to thrive, and the research finds that the drive for change is accelerating, with 85% of respondents having been involved in two or more major transformations in the past five years. At the same time, the rate of failure for transformation projects remains stubbornly high, with 67% of respondents having experienced at least one underperforming transformation during the same time.
Errol Gardner, EY Global Vice Chair – Consulting, says:
“In a successful transformation, leaders invest at the outset to build the conditions for success, both at a rational and emotional level. By contrast, the emotional strain that both leaders and employees experience in a failed transformation comes at a high human cost. The key to turning transformation failure into success relies on the ability of organizations and their leaders to completely redesign transformations with humans at the center.”
Andrew White, Senior Fellow in Management Practice at Saïd Business School, University of Oxford, says:
“We live in disruptive times where the pace of change is ever accelerating and for many businesses, transformation is do or die; but too often it is seen as a dirty word, a fig leaf for redundancies, where a failure in vision and leadership leads to an overworked, stressed and untrusting workforce. This research shows that bringing emotions to the heart of transformation significantly increases the chance of success and safeguards the well-being of workforces. Leaders must embrace the inevitable emotional journey that flows through every transformation and lead their people through each step of it, if they are to turn vision into reality and make change exhilarating.”
Six drivers that can lead to transformation success
The research finds that maximizing the emotional impact of six key drivers can increase the probability of transformation success. They are:
- Adapt and nurture leadership skills: The workforce ranks leadership as the top driver regardless of the success or failure of the transformation.
- Create an inspirational vision that the workforce can believe in: Nearly half (49%) of respondents in a high-performing transformation said the vision was clear and compelling compared with 27% of those in a low-performing transformation.
- Build a culture that embraces and empowers everyone’s opinion: Leaders need to harness the right emotions to keep workers engaged and motivated, while providing enough emotional support to prevent anxiety and burnout.
- Set clear responsibilities and be prepared for change: Leaders should provide the structure and discipline, as well as the creative freedom to explore and innovate, while creating autonomy for the organization to execute.
- Use technology to drive visible action: Leaders should prove the value of new technology-enabled approaches early and enlist early adopters and influencers to bring the workforce along.
- Find the best ways to connect and co-create: Leaders need to create a safe space where new ways of working can emerge to nurture innovation, engagement and fulfilling work.
Norman Lonergan, EY Global People Advisory Services Leader, says: “Leaders know their organizations need to transform, but many are unsettled by the prospect of change. By harnessing both the rational and emotional power of their people, leaders can ensure measurable success of their organization’s transformations. This is facilitated by having and communicating a shared vision, effectively managing their peoples’ emotional journeys, and empowering them to turn vision into reality.”
Find out more: ey.com/transformation-leadership
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About Saïd Business School, University of Oxford
Saïd Business School at the University of Oxford blends the best of new and old. We are a vibrant and innovative business school, but deeply embedded in an 800-year-old world-class university. We create programmes and ideas that have global impact. We educate people for successful business careers, and as a community seek to tackle world-scale problems. We deliver cutting-edge programmes and ground-breaking research that transform individuals, organisations, business practice, and society. We are a world-class business school community, embedded in a world-class University, tackling world-scale problems. www.sbs.ox.ac.uk
About the Transformation Leadership research
The Transformation Leadership:Humans@Center research aims to provide businesses with insights on how to successfully deliver large scale transformations. Its insights are built on a survey of 935 CXOs and 1,1127 members of the workforce across 23 countries and seven industries conducted and analysed by EY teams and the Said Business School at the University of Oxford. Participants came from businesses in both the public and private sectors with annual turnovers ranging from US$1bn to more than US$50bn. The research also includes 25 deep dive interviews with CXOs from global companies.