3098: Why 70% of Transformation Programs Fail – And How to Fix It

[00:00:03] Are you feeling overwhelmed by the endless wave of changes and innovation sweeping through your organisation?

[00:00:12] Well, if you are, you're not alone because many professionals across the globe are currently experiencing what is being coined as transformation fatigue.

[00:00:22] A deep sense of exhaustion stemming from constant organisational upheavals and technological change.

[00:00:29] Well, today here on Tech Talks Daily, we're going to talk about this phenomenon with my guest.

[00:00:35] He's the CEO of Emergent and his name is Alex.

[00:00:40] And if you've not heard of them, Emergent is a company that stands out for its distinctive approach to modernising business practices and fostering autonomy rather than dependence.

[00:00:51] So, how does Emergent help global enterprises combat transformation fatigue and drive sustainable growth?

[00:01:00] And what insights can we glean from their latest survey on AI and transformation in the business world?

[00:01:07] Well, let's get him on right now and discuss all this and much more.

[00:01:13] So, a massive warm welcome to the show. Can you tell everyone listening a little about who you are and what you do?

[00:01:21] Thank you for having me. I am Alex Adamopoulos. I am the CEO of a company called Emergent.

[00:01:27] We turned 15 this year, so technically we're still a bit of a teenager, but we've been out in the market for quite a while.

[00:01:34] And our purpose has always been on helping companies solve their most complex problems.

[00:01:41] What that really means is we teach them how to work differently than they work today.

[00:01:46] So, it's a bit of culture, it's a bit of change and a lot of transformation.

[00:01:51] Well, it's a pleasure to have you join me on the podcast today.

[00:01:54] One of the things that put you on my radar was, I think it's transformation fatigue as it's known now.

[00:02:01] It's a growing issue for many global enterprises.

[00:02:03] So, I've got to ask, what was it that prompted you to publish a paper on this very topic?

[00:02:09] And what are some of the maybe key findings regarding the causes of transformation fatigue?

[00:02:16] Is it AI and the too much talk of that or is it something else?

[00:02:20] Well, the term is something we've been using for quite a while.

[00:02:23] I'm sure we're not the only ones, but each year we publish a paper we call a thought paper,

[00:02:29] which for us is a piece of research.

[00:02:31] And we conduct that research talking to hundreds of companies at different levels in the organization.

[00:02:38] So, this year we had one called transformation fatigue because it's something that we see a lot in customer environments.

[00:02:45] People are just tired with ongoing change because there's reorganizations every six months, 12 months, two years.

[00:02:53] People come in with new agendas, new ideas, or things are just taking a long time.

[00:02:58] And you mentioned AI.

[00:03:00] I mean, pick your technology of the month, but the reality is most companies adopt new tech very well,

[00:03:07] and they're being flooded with new things on a regular basis.

[00:03:11] And what we found that was interesting, we did a survey on top of the research that we published,

[00:03:17] and we found that 50% of the employees and the companies we spoke to are either considering leaving their jobs

[00:03:25] because of something they would define as transformation fatigue.

[00:03:30] And what they mean is that, you know, it's the exhaustion.

[00:03:33] Like, you know, if you look at the hurricane going on in Florida right now, two weeks ago it was Helene, this week it was Milton.

[00:03:41] And I read an article that said two weeks ago the people were describing themselves as stressed because of Helene,

[00:03:48] and now they're describing themselves as exhausted because of Milton, because of the recurring weather patterns,

[00:03:54] and they haven't even cleaned up from the last mess.

[00:03:57] And I think this is the same pattern we see in companies.

[00:04:00] There's so much change, so frequent, people are just worn out.

[00:04:04] And so it wasn't unusual to hear that 50% of people are considering maybe a job change.

[00:04:11] We also discovered that nearly 60% of employees felt burnt out.

[00:04:16] Just, it wasn't about whether they were staying or leaving, they just felt burnt out emotionally.

[00:04:22] And they were burnt out because they had additional work or workloads to carry.

[00:04:27] You know, one key thing though I think, Neil, is that, you know, and you may have seen this

[00:04:33] or had people talk about this.

[00:04:35] There's been statistics in the market for years that 70% or more of transformation programs fail.

[00:04:42] And I don't think that statistic has really ever changed, but the reality is most people,

[00:04:48] most people go through at least one transformation program every three years in the companies they work in.

[00:04:56] Even if it's not called transformation, it's a change program.

[00:04:59] And I think people are worn out from that.

[00:05:01] Yeah.

[00:05:02] Yeah, it seems that when we put on the news, we're drifting from one perma crisis to another.

[00:05:08] And in our work life, as you said there, there's almost this pressure to be in a state of continuous learning and continuous change.

[00:05:16] So in your experience, how are large enterprises dealing with the pressures of constant transformation?

[00:05:22] And what are the most common signs that an organization is suffering from transformation fatigue?

[00:05:28] Because there might be a few business leaders listening that are blissfully unaware.

[00:05:32] And as soon as you give a few symptoms in a moment, they'll start nodding in agreement.

[00:05:36] But what are those symptoms?

[00:05:38] Well, it would be a blanket statement to say that they're mostly not dealing with it well.

[00:05:44] I don't think everyone's dealing with it poorly, but there are common patterns, right?

[00:05:49] There, there's at least five that we see that are symptoms.

[00:05:53] There's something we call the long wait for value.

[00:05:56] You know, they're doing the work, they're going through this change, but the ability to measure the value of the work isn't always an arm's reach.

[00:06:05] And there's a long wait for that.

[00:06:07] We also see that in some cases, they give programs a new name, but it's the same old change.

[00:06:13] So even though they're trying to call it something new and exciting, how they're going about it is symptomatic of how they did it last time.

[00:06:22] There's also something that we see called methodology dependency.

[00:06:26] And what that really is, is some organizations who want to go through the transformation or introduce change, especially in a world of AI, because they're trying to adopt all this new AI or machine learning tech.

[00:06:42] Methodologies don't solve, they're not the magic pill, they're not the vitamin of choice.

[00:06:47] So people take them on and depend on it.

[00:06:49] It's a bit like you and me buying a tool.

[00:06:52] You know, we buy a new phone and we expect the phone to solve all our issues around communication.

[00:06:58] It's really dependent on how you and I use the phone.

[00:07:01] And I think this is a very common approach to methodology.

[00:07:05] The other one is buzzwords.

[00:07:07] I mean, if it was, you know, 10 years ago, it was agile.

[00:07:11] And then it was, you know, first we had lean, then we had agile.

[00:07:13] Now we have digital, digital everything, digital transformation, digital twins, digital pizza.

[00:07:19] And now we have AI, right?

[00:07:21] So I think, I think there's also a lack of understanding on what we mean when we say a word.

[00:07:27] And companies don't often define them for themselves.

[00:07:30] But perhaps the most symptomatic thing that we see out of all that is the fifth thing, and that is skills.

[00:07:37] The ability for companies to retain talent and upskill their people accordingly is a real challenge for them.

[00:07:46] And the lack of skills is also what helps, rather not helps, what actually results in companies not making the advancements they want when they take on a big program.

[00:07:57] And another reason I wanted to get you on the podcast today, I was reading that you got this strong perspective on how some of those traditional consulting firms, and to name a couple there, McKinsey, BCG, and the other big four that serve clients.

[00:08:13] I've got to ask, how do you emerge in support?

[00:08:16] How does your approach differ, particularly when it comes to helping clients become more autonomous rather than dependent?

[00:08:22] Anything you can share around that?

[00:08:25] Yeah, I would start though by saying that I have an enormous amount of respect for those companies.

[00:08:31] And the reason I want to get that out because when we did the survey and the results came back was there was a really interesting statistic that we didn't actually prompt.

[00:08:41] And that was, many large enterprises don't think they're getting the value they're paying for from the big four.

[00:08:47] Right? And we published these findings and there was a lot of coverage on this article that we published.

[00:08:55] But it wasn't emergence perspective.

[00:08:58] This was the view from many large companies that see that.

[00:09:01] And I have lots of good colleagues and friends in these organizations and I respect for them.

[00:09:05] But there is a blocker.

[00:09:07] The bigger you get, the more restricted your business model gets.

[00:09:12] Meaning, you don't have the flexibility you once had when you were smaller, more agile to make certain changes.

[00:09:19] And I think this has become a challenge with the big organizations.

[00:09:24] In order for them to stay profitable and competitive in their framework, they have to sell you something specific and it has to have a certain structure to it.

[00:09:35] So they're not as nimble and as adaptive as companies need.

[00:09:38] And this is something we've seen now for the 15 years that we've been serving companies.

[00:09:42] We work alongside these big organizations quite well.

[00:09:46] And a lot of times, the reason we're involved is because we can accelerate a change program because we're not tied to these restricted business models.

[00:09:54] We're not tied to that thing I called methodology dependency.

[00:09:59] We're not selling our flavor of methodology.

[00:10:02] We're selling a framework and expertise to help companies do that.

[00:10:06] So the way we kind of tackle it, Neil, is we have this whole idea of something we call we think, we build, we train, and you succeed.

[00:10:17] And the way we shape that is when we say we think, we help companies start first by thinking differently about work.

[00:10:25] We're not suggesting they're not good thinkers or they don't think well.

[00:10:29] We just know that in order to compete in the current market, you have to think differently about your practices and the way you approach work.

[00:10:37] So this is a little bit of a culture change or mindset shift that we introduce to them.

[00:10:42] On the we build, you know, that's about giving them access to smaller higher skilled practitioners that can get work done at an accelerated rate as opposed to, you know, long year, multi-year contract commitments that many companies don't want to sign up for.

[00:11:00] On the training part, one of the key things that has made Commergent who we are is we have a learning program we call ZFQ, which stands for value, flow, and quality.

[00:11:12] It's been our superpower and our differentiator for a long time because it's a hybrid learning product that lets companies upskill and reskill their people in their context.

[00:11:24] Meaning, you know, we're not creating clones. We're actually taking people in many roles in a company and introducing them to a very structured and professional learning program.

[00:11:35] And they come out the other side a lot different than they could ever have expected.

[00:11:40] This is why our mission statement is to improve the way people in companies work.

[00:11:44] And then we add the word forever.

[00:11:46] We've had clients tell us you've changed the way I work forever.

[00:11:50] And that's how we got our mission statement. It was, we're not great marketers.

[00:11:54] It came from client language to be honest.

[00:11:56] Of course, Emerging also emphasizes operationalizing innovation and product management rather than focusing on high level strategies.

[00:12:05] So do you have any examples of how that approach has maybe helped clients accelerate improvements, deliver better products and services rather than getting caught up in that analysis paralysis?

[00:12:16] Yeah. And there's a classic pyramid in our industry that has people, process and technology on the edges.

[00:12:25] Yeah.

[00:12:26] And the reality is, as I said earlier, with the continued reorganizations and changes that companies are going through, people kind of get covered last because there's always this focus on process and technology, which do matter.

[00:12:42] But the thing that makes everything tick are the people.

[00:12:46] And so we really believe that emphasizing people first is the way you start to solve some of this fatigue and the way that you accelerate good outcomes.

[00:12:56] Because when you're teaching people how to work differently, they can take the processes, they can take the tech and they can do more with that.

[00:13:04] I mean, we've seen many examples, you know, we helping pharma deliver a drug to market six months early because, you know, we were able to shape their product operating model to be more efficient, taking a lot of the waste out of the process.

[00:13:19] We're helping organizations in e-commerce, you know, get new products into the hands of customers, you know, maybe up to a year sooner because we've taught them how to have a more of a design thinking component to the way they look at work and not get hung up with long drawn out discussions or budget conversations.

[00:13:38] So there's a lot of techniques that we use to just take waste out and improve the efficiencies for organizations.

[00:13:46] We kind of call it the product estate.

[00:13:49] If you think of like an estate plan for your home or your life, we take a top down view of an organization and we look at everything through this lens of a product estate.

[00:13:58] What are all the parts of an estate that make it work together?

[00:14:02] And we can systematically work through that with a company to help them achieve their goals or whatever it is they're trying to do.

[00:14:09] The most important thing we want to do is not deliver some big fat PowerPoint deck that's going to sit on the shelf, gather dust and really never be used by anybody.

[00:14:20] So for us, it really is about incremental steps, demonstrating value and then moving to the next thing.

[00:14:28] And as we said at the very beginning of our conversation, AI is the big buzzword at the moment.

[00:14:34] And a powerful stat here, AI is also said to be involved in 98% of all products and services by 2028, which for say we're just a few weeks away from 2025.

[00:14:47] It is very close.

[00:14:49] So how do you see this impacting industries beyond obvious sectors like automotive and finance?

[00:14:55] And what should organizations be doing now to focus and prepare for this inevitable, powerful stat that I just shared?

[00:15:04] Yeah.

[00:15:05] So for us, we're involved in several programs of work that have AI technologies and several sectors, which I can mention in a moment.

[00:15:14] But one of the first things that we try and do with organizations is first help them answer some important questions.

[00:15:21] Like, what is AI for you?

[00:15:24] Like, what do you think it means for your organization?

[00:15:27] Because unless we're really understanding what problems we're solving or what definitions we get into these terms, it's not as easy just to jump in.

[00:15:36] I think you and I know that, you know, Gen AI tools are the, for most people, are what AI is these days.

[00:15:43] You know, using large language models or tools to do research, great presentations, whatever it is that we're using it for.

[00:15:51] But we're seeing it used in so many unique use cases for ourselves.

[00:15:56] I mean, we're doing great work in this space in, for example, an industry you wouldn't think of, steel manufacturing, you know, where we have AI tools that are doing predictive maintenance analytics on the machines that actually produce steel.

[00:16:11] So as opposed to you and I walking around, checking on the machine, making sure, you know, it's okay, we now have technology assessing the, you know, the health of that machine and making some predictive analytics on when it needs maintenance.

[00:16:25] Or, you know, if you are a legal firm, you know, we've created AI tools that actually automate claims for invalidation to actually give up improvements of 70% towards claim handling because of the automation.

[00:16:44] I mean, it goes on and on.

[00:16:46] We've applied it to the utility industry, the insurance industry.

[00:16:50] So I do think your stat is probably true.

[00:16:53] There's some form of AI involved in many, many organizations.

[00:16:58] But I still think we're at the beginning of what it's going to eventually be for companies.

[00:17:05] 100% with you there.

[00:17:07] And your survey as well, if we go back to that for a moment, that highlights the importance of things like data privacy, accuracy, scalability, and all these things that are so important in adopting AI.

[00:17:20] So what steps should organizations be taking to maybe address some of these concerns before they go headfirst in adopting AI, especially when they're integrating it into their products and services, etc?

[00:17:34] Because this should be a priority before then, really, shouldn't it?

[00:17:37] It should.

[00:17:38] It should.

[00:17:38] And, you know, selfishly, I'd say what they should be doing is talking to a company like Emergent who can come in and give them advice, not just sell them a product.

[00:17:48] I think it's not about that.

[00:17:51] I think the first step is understanding and familiarizing yourself with AI legislation.

[00:17:55] We have the EU AI Act that many organizations are just becoming familiar with.

[00:18:01] We have the AI Bill of Rights in the United States, which, again, most companies are just now understanding.

[00:18:06] And we're going to see more legislation around AI.

[00:18:08] So the whole idea of legislation, ethics around data use, these are topics where companies need some advice and some counsel.

[00:18:17] And, you know, we do a fair amount of what we would call AI advisory that helps companies assess that and make sure they understand, like, what steps should we take?

[00:18:26] How should we tackle policies or data-related topics?

[00:18:29] I would say, though, inside companies, another thing, you know, that organizations should do when you say what steps should they take, they really need to think about how they increase the scope of the chief data officer.

[00:18:43] You know, titles are titles.

[00:18:45] In the last few years, we've seen this chief data officer role emerge.

[00:18:49] You know, the chief data officer role is something that needs to be re-architected.

[00:18:54] So it has ownership around policies and use in the company.

[00:18:58] And it's not just looking at the cleansing of data or the technical aspect, but actually has more responsibilities around the do's and the don'ts or the ethics that surround it.

[00:19:09] And no matter how powerful and transformational any technology promises to be, even AI, it will fail without the right workplace culture in place and ensuring that everybody is on board.

[00:19:21] So as transformational fatigue, transformation fatigue sets in for so many different companies, how can leaders shift their focus to ensure that long-term success without overwhelming their teams with continuous change?

[00:19:35] Because we focus on the technology, but it's people that are impacted right at the heart of this, right?

[00:19:40] Absolutely.

[00:19:41] And we would suggest a few things that may not be immediately obvious.

[00:19:46] So the first thing we often will discuss with an organization is don't make change of the goal.

[00:19:51] Empower the team to lead improvements and focus on how you reward the efforts.

[00:19:57] The other thing that we talk about is not all improvements are equal in value.

[00:20:01] You know, we have to kind of work with the organization to find the things that would hurt performance the most and improve those things ahead of other things.

[00:20:09] So you have to understand how you define value.

[00:20:13] Educating leaders so they can embed a culture of ownership and improvement.

[00:20:17] This is something that everyone talks about.

[00:20:20] The magic is how do you do it?

[00:20:23] How do you do it really well?

[00:20:24] We believe you do it through this whole idea of education-led transformation.

[00:20:29] So educating them, training them, giving them access to high-quality learning and thinking so they can move in that direction.

[00:20:39] Maybe one thing that could be really valuable is viewing the organization as a system where every improvement is an increment of change.

[00:20:48] The same way you would view incremental changes to your product or services as good.

[00:20:54] We actually think of organizations as a system, as a system of work.

[00:20:58] Start by doing the fundamentals.

[00:21:01] You know, we're all in a rush.

[00:21:02] I don't know.

[00:21:02] I guess we'd all agree with that.

[00:21:04] You know, we all want to diet and get to this outcome sooner than we should because we don't want to put in the work to get there or the fitness program.

[00:21:12] Organizations are very much the same when it comes to trying to run a big program.

[00:21:17] The last thing I'd say is structure change by using simple, effective operating models.

[00:21:23] There are models that companies can put in and see change really quickly without having to boil the ocean approach.

[00:21:30] And that encourages them to go and do more.

[00:21:33] So those are some of the things that we would typically recommend.

[00:21:37] And looking ahead into 2025 and indeed beyond, I'm curious, how do you see the role of a digital consultancy evolving as AI becomes more prevalent?

[00:21:49] And what are the most important factors you think will maybe define successful transformation initiatives in the future?

[00:21:56] Because this pace of technological change is only going to keep getting faster and faster.

[00:22:01] And I'm interested in where you see this heading.

[00:22:04] Yeah.

[00:22:05] Well, I have a story I tell, which I've told a few times, and it's a quick story.

[00:22:10] But if you remember Freeman Dyson, he's the guy that replaced Einstein at Princeton University.

[00:22:16] And he passed away a few years ago.

[00:22:18] And before he did that, he made a really interesting comment.

[00:22:22] He said that the digital mind will never replace the analog mind.

[00:22:27] And he pointed to the fact that if you look at the last 50 or 60 years of innovation or automation in innovation, he pointed to General Motors when they first put robotics on the shop floor to build cars.

[00:22:40] And he said every automation innovation since has created more jobs, not less jobs.

[00:22:47] And so one thing is when we think about AI and looking ahead in the role of a consultancy, the first thing is getting rid of AI searmongering, right?

[00:22:59] Getting organizations to understand that AI is an important tool in the sandbox, but it isn't the only tool.

[00:23:06] So I think the role of the consultancy will be to continue to do capability development in areas like product management.

[00:23:15] So teaching people how to build products with good practices.

[00:23:19] And also, how do you incorporate things like AI into the human workflow that's happening in developing a product or a service?

[00:23:28] I think the other thing that the role of a consultancy will be effective in is operating models that are efficient, modern, and incorporate the use of AI in data and analytics, but also can measure the productivity from it.

[00:23:44] And the last thing is probably what we said a minute ago is making sure that these consultancies can really be effective in educating companies on policies and how to adapt the change inside an organization.

[00:23:57] Because unless you have that combination, it's going to be hard to be competitive and it's going to be hard to be a trusted partner.

[00:24:04] Because I think right now, AI is also scaring some organizations or they still don't know how to trust it.

[00:24:13] And I think where they can find trust is as a partner who actually understands it and has good examples of where they've helped organizations solve it.

[00:24:22] Wow. I completely agree with everything you say at that.

[00:24:25] A powerful point and a powerful moment to end on.

[00:24:28] But before I let you go, I always like to have a bit of fun with my guests.

[00:24:31] Yes, you've shared your insights with everyone today, but I'm going to ask you to leave one final gift for everyone listening.

[00:24:37] And that is a song that we can add to our Spotify playlist or a book for our Amazon wishlist.

[00:24:43] Or I don't mind which it is, but what are you going to leave everybody listening and why?

[00:24:49] Well, if I had to say a song, you know, I think I'm a nostalgic person.

[00:24:55] I love Ennio Morricone, who was a great composer from the past.

[00:25:00] Gabriel's oboe is my favorite Ennio Morricone song.

[00:25:04] So every time that comes on, it takes me to another place.

[00:25:08] But if I had to add a book, The Right Kind of Wrong by Amy Edmondson is the book I ask many people to read.

[00:25:16] It's inspirational and it would really help with people struggling with fatigue and change.

[00:25:21] Oh, wow. Well, first of all, we'll get that book added to the Amazon wishlist.

[00:25:25] But I think you must be my spirit animal because that track is just so powerful that you mentioned there.

[00:25:31] And it almost brings a tear to my eye every time I hear it.

[00:25:34] And I've often said that I'd love that at my funeral.

[00:25:37] That would be my funeral.

[00:25:39] So I've got the very beginning.

[00:25:40] It's just so powerful.

[00:25:41] So I'll be getting that added to the Spotify playlist as well.

[00:25:45] And for everyone listening, just wanting to find out more information about you or the report we mentioned or just find out more information.

[00:25:54] Where would you like to point them?

[00:25:56] Yeah, I mean, I'm easy to reach.

[00:25:58] You can anyone can email me at alex at emergent dot com.

[00:26:02] Very simple.

[00:26:03] I'm a good responder.

[00:26:04] Happy to be contacted.

[00:26:06] Or they can go to the company's website, emergent dot com.

[00:26:09] They can find all our research, all our articles, and I think it would be rich and informative for them.

[00:26:15] Awesome.

[00:26:16] Well, I'll make sure all the links are added so people can find you nice and easy.

[00:26:21] And I just can't thank you enough for taking the time to sit down with me today.

[00:26:25] Discuss the reality of transformation fatigue and the reason you published that paper on it and what you're seeing in large global enterprises dealing with it.

[00:26:33] And most importantly, how they can work towards solving it.

[00:26:37] Love to hear people's thoughts on today's conversation.

[00:26:40] But thank you for starting it today.

[00:26:42] Thank you for having me.

[00:26:43] It was a pleasure to see you.

[00:26:44] Thank you.

[00:26:45] So we talked about a lot there, didn't we?

[00:26:46] From discussing the realities of transformation fatigue and the innovative approaches that emerge and employs to not just manage but master these challenges.

[00:26:56] And Alex also shared valuable insights into making large enterprises more agile, more autonomous.

[00:27:03] Emphasizing, though, the importance of culture, incremental improvements and ethical AI integration.

[00:27:11] So if today's conversation sparked your interest, remember you can learn more about Alex's work and Emergen's unique strategies by visiting their website.

[00:27:20] I'll leave all the links that you need there.

[00:27:22] But over to you.

[00:27:23] What are your thoughts on combating transformation fatigue in your organization?

[00:27:27] Have you seen effective strategies in action?

[00:27:30] What worked well?

[00:27:31] What didn't?

[00:27:32] Please share your experiences with me and we can continue this crucial conversation.

[00:27:37] All you need to do is email me techblogwriteroutlook.com, x LinkedIn, Instagram, just at Neil C. Hughes.

[00:27:46] Let me know your thoughts.

[00:27:47] Other than that, I'll be back tomorrow with another guest and hopefully you can join me again.

[00:27:51] But it's time for me to go now.

[00:27:53] So speak with you tomorrow.

[00:27:55] Thank you.