The Role of Management in Business Transformation: Success Factor Mindset

Abstract

Globalization, digitalization, individualization, mobility, and many other megatrends are currently changing our environment to a great extent. These challenging trends influencing the society, the economy, politics, etc., do not stand alone and are not conclusive; rather, we are in the VUCA world, which describes constant change. Many companies are currently looking at ways and possibilities to take these vicissitudes into account and become less of a driven force and more of a proactive shaper. To this end, they are discovering the world of agile working within broad-based corporate transformations, but also the difficulties in the broad implementation of these new paradigms of the working world for employees and management. To provide companies with a framework for managing these changes and to provide guidance, the three-pillar model was developed. This describes the transformation of organization and leadership along the aspects of Sustainable Purpose, Traveling Organization, and Connecting Resources. The Traveling Organization reflects the ability to change, i.e., the constant adaptation of the company to constantly changing conditions and requirements.

This transformation of the Traveling Organization is again taking place with three aspects: Digitization and Technology, Organization and Processes, and People and Culture. In this context, digitization and technology represent a key enabler of transformation by allowing new ways of working and models through, for example, the use of new communication technologies and collaboration tools. Organizational and process design should also take the new framework conditions into account and promote a flexible alignment to market requirements through an agile organizational structure and process organization as well as appropriate roles. The entire framework described is ultimately supported by the people in the company and the lived culture, i.e., by the values and action-oriented principles of all those working in and outside the company. Ultimately, it is in the hands of the employees which systems they use, which processes they follow, and which goals they ultimately pursue. The human factor is therefore of enormous importance in any transformation, and here also the manager, who has an enormous influence on the employees and their actions as a role model, multiplier, and authority to issue instructions. It is precisely this human component that is the central weak point of any transformation, because more than 70% of failed projects are caused by resistance from employees and managers. It is therefore essential to provide particularly intensive support to this group of employees during the transformation.

This is also shown by the case study of a company in the automotive supply industry, which was confronted with the classic megatrends of globalization, competitive pressure from innovations from abroad, new customer expectations, sustainability, and the advance of electro-mobility (the rise of EVs, for example). A broad-based transformation project was initiated, top management actively communicated it to the company in an exemplary manner, and initial milestones were reached in the conceptual development of the new organization. However, when it came to implementation, reality set in and middle management became a huge obstacle to successful transformation. They refused to accept the upcoming changes once they realized the consequences for their own teams, the available resources and thus, simply, for their own position in the company. This example clearly confirms the reasons for unsuccessful transformation from the study. Management is an essential node in the transformation and should be involved as a relevant stakeholder from the outset, and their acceptance and support should not be taken for granted.