Embarking on transformations within family-owned, founder-led, PE-backed, and public companies presents a myriad of challenges for leaders and organizations. Although learning from successes is valuable, the true lessons emerge from navigating through challenges and learning from mistakes. In this article, I explore several common issues I have faced during transformations and provide insights on effectively managing them.
Resistance to Change
It is not easy to change your day-to-day let alone the overall strategic direction of your company. We are often creatures of habit doing what has worked in the past and relying on the people that have helped get us to this stage. Changing course is challenging.
You have to be open to having very direct, sometimes difficult, but mutually respectful conversations. As much as you can, the recommendations to change should be supported by research, facts, numbers, and ultimately, meaningful changes need to be measured and new KPIs may need to be established. It is also extremely important to gather multiple perspectives as you research to set the plan and related priorities. Perspectives should be gathered from up, down, and across the organization. This often creates buy-in or highlights resistance. Either way, being transparent is critical to start building trust moving forward.
The impact of not taking action or delaying change should also be very openly discussed. The most significant value drivers may meet resistance for any number of reasons. You may not want to change people, reporting relationships, or relinquish control. There is a risk to doing these things, it can be uncomfortable, and there will be organizational pushback. There also is a risk of not doing these things. This needs to be discussed too.
Leadership/Management Challenges
Scaling a business often demands transitioning from hands-on roles to strategic leadership positions. This can be difficult and may require developing new management skills or hiring new talent when required. This shift necessitates clarifying roles and responsibilities and identifying potential delegation opportunities. It is sometimes difficult for people to delegate and relinquish control, but if their work better aligns with their talent and growth potential the individual and the organization will be much better off. They can focus and operate at the right level and area.
Talent Acquisition and Retention
Transformation efforts may uncover partial or complete gaps in organizations or in specific skill sets. The faster the gaps can be determined the faster they can be filled and transformation timelines can stay on track. There is a caveat to this though. Uncovering gaps is one thing, actually prioritizing and moving quickly to change, communicate, and fill them is another. Sometimes new positions and org structures take time for existing founders and management teams to digest. This is understandable, but delays will impact timelines and may create more fear in the organization. Fear related to lack of information often impacts retention. It is important to be as transparent as possible and communicate the plan simply and directly. I have led a number of multi-year transformations where people knew they would either have to learn new skill sets, change their roles, or transition out. The process and timeline was shared and most of the people stayed to help with the transition and some migrated to new roles. Transparency built trust to push the transformation forward.
Investment in Scalability
For successful transformations, investments in people, processes, and technology are crucial. Demonstrating the impact and timing of proposed investments through research and measurement builds the willingness to invest and holds teams accountable. Involving team members affected by changes early on helps solidify buy-in and highlights any potential resistance, facilitating smoother decision-making.
Investors, founders, management teams, or other decision-makers need to be allotted a defined amount of time to do their diligence related to the plan and investment. Everyone will have their own ideas on this. These perspectives are often shaped by risk profiles (ages/time it takes for the transformation to impact org and valuation), levels of effort on their respective teams, effect on customer relationships (product/messaging changes), and influence on their jobs and organizations. Not everyone will completely agree, but when the decision is made to move forward it should be done with a consistent, simple message from a committed team starting from the top.
Conclusion
Executive teams, management, and founders often wear multiple hats, and their focus is stretched between managing day-to-day operations and driving growth initiatives. To overcome these challenges, leaders need a combination of strategic planning, execution assistance, and a willingness to seek advice and support from mentors, advisors, or industry experts. Above all, leadership teams need to be bought in, progress needs to be measured, and the execution teams need to be engaged.
What is my role and what my experience can help your Team with:
STE Advisors helps companies prioritize organic and inorganic value-creation opportunities and then executes against these activities. Frequently, organizations are too busy managing the day-to-day to take a step back, put together/confirm the big picture, and have the bandwidth to execute against the cross-functional initiatives that could drive the most value.
STE Advisors partners with companies to:
- Develop/confirm the strategic plan, the execution plan, and related KPIs.
- Assist or lead the execution with team members inside your organization pushing key initiatives forward that you know you need to execute against.
- Work with you to continuously enhance the value of your business.
Specific past work and roles have included:
- Acquisitions and Partnerships – Helping companies target, acquire and most importantly integrate acquisitions and optimize partnerships.
- Integrator Roles – Acting as an EOS (Entrepreneurial Operating System) Integrator orchestrating the business functions, ensuring accountability, and executing on the initiatives that systematically move the business forward.
- Developing and Executing Go-to-Market Strategies – Launching products and services by understanding buyers, differentiating from the competition, developing pricing, choosing distribution methods, establishing the sales process, creating marketing content/stages, measuring results, and continuously refining the process.
If you would like to learn more, please contact me at rsternot@steadvisors.com.
Visit my LinkedIn Profile: https://www.linkedin.com/in/robsternot/