People Led Transformation - the new normal for organisational success

Organisations are leveraging digital technologies to create new products and services, they are redesigning ways of working and they are rethinking their purpose to reflect the fundamental shifts in attitude that have gained momentum since the pandemic – all of which means delivering an exciting, ambitious level of transformational change.

Despite risk volatility, KPMG’s CEO Outlook shows 60% of CEOs are confident about growth prospects and are therefore investing more than ever in ‘the fresh start effect’.  Transformation is now a process of continual change, where organisations may not even be able to see the final outcome. Programmes will constantly pivot to reflect changing circumstances, such as new opportunities, evolving customer demands, changes to business strategy or new regulatory requirements.

Employee resilience is being challenged

In all this, it’s easy to see why many employees are weary of change. “Employees are constantly being asked to work in new ways, within new structures, to meet new goals – and may not even be consulted on what’s working and what’s not,” says Surbjit Laroya-Annan. “As a result, many feel disconnected from the organisation’s purpose.” Yet it’s precisely the degree to which employees are invested in achieving transformation goals and in the journey to get there that determines how fast and how successfully transformation can happen.

New thinking is needed

Many business leaders are already starting to recognise that a fundamentally different approach is required. In our Future of HR report 2022, 95% of organisations say they are prioritising employee experience – seeking to understand how it feels to work for the organisation and to build this understanding into the way work is planned and carried out. Over six in ten organisations agree that they must ‘pass the culture test’ and ensure that people and organisation are aligned on purpose.

This shift in thinking is vital. “Without a new approach, organisations risk squandering the massive investment in transformation they are making,” says Sara Belchamber. “In short, a transformation approach that has until most recently been led by tech or business needs must become a transformation approach led by the needs and experience of people ­– both customers and employees.” With this in mind, KPMG’s ‘people-led transformation’ identifies six areas of focus to enable successful transformation in the new reality. 

Leadership

The growing complexity of transformation brings fresh challenges for leaders – requiring them to stay true to their purpose and values while remaining agile. Our Leading through flux model identifies key questions to ask across four areas to achieve this:

• Strategy Making – am I keeping on top of changes and listening to peers?
• Test and Learn – can I change course when needed?
• Execution – am I making the hard choices when necessary?
• Sustainable – am I working towards lasting change?

Psychological safety

Transformation can only succeed in an environment where people feel safe to challenge established ways of thinking and working. So, organisations must create an environment where new approaches can be tried and allowed to fail – fast and without blame – if necessary. As hybrid working becomes widespread, organisations must also ensure their people have ways of coming together to share ideas, learn and grow close as a team.

Employee Experience

Transformation initiatives usually focus on transforming processes, but more attention needs to be given to transformation from employees’ perspective. It’s not just about achieving the end state, but about how you get there. Exploring the moments that matter for employees and understanding their pain and gain points are key to designing a solution that works for the people who will eventually deliver transformed processes.

Behavioural science

With their power to encourage (or ‘nudge’) the right behaviours, behavioural science techniques can be invaluable in communicating business transformation and achieving lasting change. Traditional communications, anchored on a central change narrative are not enough.  Deep rooted behavioural science techniques are increasingly in demand and need to become the new norm to drive the right behavioural outcomes.

Data-driven change

Insights from data enable organisations undergoing transformation to assess how much change the organisation can absorb and to prioritise change efforts accordingly. KPMG’s Change Cloud tool enables this approach, creating an holistic view of all change initiatives and allowing change leaders to design a change experience that is personal to different groups of affected stakeholders.

Sustainability

Change will remain a constant and a challenge for businesses everywhere. This means organisations must build deep capabilities in people-led transformation into their DNA. These capabilities will be key to coping with organisational pivots and ensuring ongoing transformation creates sustainable change.

Achieving lasting impact from people-led transformation

For transformation to succeed, employees need to be fully invested in the process. Without their buy-in, initiatives are destined to deliver only superficial results rather than lasting, sustainable change. This is the best argument for putting people at the heart of transformation. As businesses dial up investment to take advantage of new growth opportunities, the argument will become more important than ever.