Take a good look at any company today and chances are, there’s a transformation underway. Businesses are moving quickly to respond to market changes, while technological advancements are disrupting entire business processes and economic pressures are sparking operational improvements.

At the same time, regulatory changes are forcing companies to adapt, and globalization and increased competition further drive the need for transformation. If you’re not transforming, you’re falling behind.

But while everyone’s transforming, the goals of transformation are different for every organization. For some, it’s about leveraging new technology. For others, it’s about overhauling internal processes, culture or even how they manage their finances. At its core, transformation is a fundamental change in how a company does business, with a broad impact across multiple domains or C-level organizations.

Implementing lasting change

Urgency and complexity elevate a transformation program from a normal portfolio backlog to a higher priority initiative requiring its own governance and leadership. These efforts require coordination across teams and functions.

But too often – 88 percent of the time, according to a 2023 Bain report – transformations do not achieve or exceed expected results. This is often because there’s no clear rationale, aligned sponsorship, adept operational leadership or effective change adoption.

To succeed in transformation, you will need more than just traditional project management. You will need a strategic approach that brings the whole organization along for the ride – from investors to executive sponsors and individual employees.

To truly transform, you need to set up the right foundation, with five critical elements that can help you kick-start an enterprise transformation and position it for success.

STEP ONE: Define the business case

Many companies embark on a transformation without a clear definition of what it means to transform and the value it will bring. It’s important to define and quantify the business reasons to execute the transformation – and not just to get the board of directors to say ‘yes’ to hundreds of millions of dollars in investment.

A crisp business case will also play a critical role in inspiring teams, tying transformation to strategy, tracking actual progress against projections and enabling leaders to correct course along the way.

Defining the business case typically involves financial modeling to compare investment with value creation or cost savings. This will become the basis for your tracking during execution, so be rigorous in your definition of success. Also, retain your assumptions and methodology so you can adapt the model and make informed decisions as conditions change.

STEP TWO: Establish executive sponsorship

Since all transformation by definition is a cross-functional and cross-organization effort, it will go much more smoothly with the full backing of the executive leadership team. A horizontal execution engine – like a transformation office – is often implemented quickly without the essential commitment of the organizations who will actually do the work and adopt the transformation.

This is very risky, and often causes a transformation to be destined for failure due to lack of sponsorship. To establish effective sponsorship and alignment, map out the paths of influence in your organization and the role of sponsors across multiple organizations.

Leverage senior executive relationships and CEO or board-level endorsements of the business case to ensure alignment on value proposition before you begin.

Doing this before you kick off any transformation office will allow you to enlist the true sponsorship and commitment you’ll need at the highest levels to meet your transformation goals.

STEP THREE: Design the operational model and governance

Creating a governance model that works, regardless of the number of dotted lines involved, is challenging, but it’s worth the investment of time and energy up front to set a transformation up for success.

Transformations always require a common set of core central functions, like financial management, change management, workforce strategy and often central project or portfolio management. These contributions, which often make up a transformation office, can report centrally into a chief transformation officer or be dotted-lined zones of accountability.

Either way, the core functions need to have named ‘owners’ at the right level in the company and empowered to be responsible for delivering their function.

The organizations whose technology, processes and people are impacted by the transformation also need to be a part of the operational model. These can be product teams, engineering teams, delivery teams or any other dimension of the company that is being transformed. These organizations do not report directly to the transformation officer but are a key part of the operational governance model.

Each involved group will have a sponsor and someone who is a day-to-day representative to liaise with the transformation office. Sometimes each team will also have a lead program manager who will report back to the transformation office on plans and progress against the business case.

Clarifying the roles and responsibilities of each area as part of the operating model will bring a shared understanding of how the work will get done. It will also enable thoughtful assignments from leaders who tap team members to take roles associated with the transformation.

It creates a sort of ‘contract’ between teams and the transformation office about the expectations from each side. This can prove critical later, when risks, delays or changes arise.

STEP FOUR: Bring the organization along

Transformations often involve multi-year efforts, reskilling and organizational change. When changes impact an employee’s job role or function, they will inherently create anxiety in the workforce, and this can impact execution and adoption.

Effective change strategy, deployed very early in the life of the transformation office (often in parallel with business case creation), plays an essential role in crafting and conveying the narrative of the transformation. This turns transformation into a motivating source of confidence, rather than invoking fear and resistance to change.

A solid change management strategy ensures that the entire organization understands the ‘why’ behind the transformation. Leaders will need to communicate frequently and effectively, with proactive and consistent messaging, to build awareness of the change, the expected impact on the organization and the part each team and individual will play.

The change management team becomes the orchestra conductor behind the messaging to ensure that communications are focused, clear, consistent and accurate. This empowers leaders to own the coordinated narrative and drives workforce confidence in the success of the transformation.

Further, change management strategy will also support workforce readiness in the form of upskilling or training to prepare for change adoption.

STEP FIVE: Bring the investors along and prove the value

Transformation isn’t just about the internal team; ultimately, investors are relying on transformation leadership to deliver on the value promised in the business case. Tracking progress effectively – in the simplest form of costs versus return – is a piece that is overlooked surprisingly often.

It’s going to take time up front to develop a reliable methodology to report real progress in the form of projected timelines, cost savings, core business metrics and tech and labor investment spent. But without this rigor, executives and investors may lose trust in leaders’ ability to deliver on the business case.

In any multi-year project, things often deviate from the plan; outside market dynamics, external factors or changes to the plan can compel you to reevaluate or modify the business case. Ensure that your financial management team is positioned to not only track forecast versus actual progress but also to readily perform situational analysis to re-model outcomes based on real-time changes.

This ‘tension in the system’ is essential for informed sponsor decision-making during the process. Without this ability to measure the impact of a pivot, the transformation will not effectively serve the investors and will eventually be rendered as a powerless administrative function, instead of a strategic engine for the company.

The blueprint for transformation success

The ability to routinely transform has become essential for businesses today, and most organizations already have what it takes to execute a large transformation. Where they often fall short is in laying the groundwork effectively.

By defining a clear business case, securing executive sponsorship, designing the right operational model, and bringing the organization and investors along for the ride, you can sidestep the most common transformation pitfalls.

Follow these steps as you kick-start your transformation and you will greatly increase the likelihood of achieving – or even exceeding – desired transformation outcomes.