Change and transformation in organizations

Interview with Silvia Heredia Minthorne de Kläner and Sabeel Asghar

21 years have passed since Rolf-Jürgen Moll and Oliver Schmitz founded LucaNet. During this time, not only have the demands on finance departments changed, but also LucaNet as a company has changed. Silvia Heredia Minthorne de Kläner, Team Lead People & Organizational Development, and Sabeel Asghar, Senior Organizational Development & Strategy Manager, lead and accompany this transformation process. In this interview, they tell us what change essentially means, how to motivate employees and what LucaNet and Rome have in common. 

Do you know the song “Changes” by Bowie? 

Sabeel: Yes, of course ch-ch-ch-ch changes … (laughing)  

Silvia: Yes, although my personal favorite “change song” is “The Times They Are a-Changin” by Bob Dylan. The song is about the longing for change, and Bob Dylan expressed this feeling very well. 

What is change actually, and why does it matter so much in the digital age? 

Sabeel: When we talk about change in the digital era, we are talking about the evolution of the digital era in the past years and its impact on the business ecosystem. One of its impacts is forcing organizations to go through organizational transformation and work on topics such as Digital and Culture Transformation, Digital Leadership and Digital Learning.  

This is because the digital era has built up an increasing concern to cope with technological advancement, globalization, and intensifying competition in the business ecosystem, and organizations must be equipped to respond to them.  Research from Salesforce and IMD, reflects these challenges in numbers. 

  • 76% of customers now report that it’s easier than ever to take their business elsewhere. 
  • 63% of customers expect companies to provide new products/services more frequently than ever before. 
  • 62% of executives consider a sustainability strategy necessary to be competitive today, and another 22% think such a strategy will be necessary in the future. 

Individuals now have the resources and technology to compete with any large business, which increases the competition. Blockbuster and Netflix provide just one example of how a new kid on the block was able to disrupt the market and bring down a giant.  

Silvia: Just as an addition to what Sabeel just said, I believe it is crucial to differentiate change and transformation. Both are good and can be necessary for the organization, but the objective, outcome, and processes are different, and that is very important to understand for everybody involved. I really like the quote from Tanmay Vora: 

“Change fixes the past. Transformation creates the future.” Change is all about improving the past and that directs all change activities. In transformation mode, it is the future that will direct our actions. It is about inventing the future and possibilities are only limited by our imagination and courage.  

Having said that, we are currently in a transformation process to reinvent LucaNet 2.0, inspired by our customer needs and successful history so that we can achieve our corporate vision defined in 2019. Change is obviously required and part of it, but our focus is the future, so our change is definitely transformational. 

What factors can trigger changes that are so fundamental that a change process in the company becomes inevitable?  

Silvia: Many change processes are triggered by increasing competitive pressure, such as a new competitor entering the market or changed customer needs. In addition, there are of course also internal processes that can trigger changes, even major changes, such as new majority structures, new investors or M&A processes, or smaller ones, such as the introduction of a new system, a new process, or a new structure. What these triggers have in common, however, is that they mostly pursue the goal of keeping or making the organization fit for the future and successful again or ensuring success.  

At LucaNet, the Board decided to revise the company vision in 2019 and that was the trigger for us as a company to look at our future sustainability, our corporate culture, in our 20th anniversary year. Our main motivation was to set the course in good time so that we could continue to be successful for another 20, or even better, 200 years. 

Sabeel: In general, there can be several reasons why an organization chooses to transform or change. It could be associated with a response to creating or responding to competition, challenging the status quo, responding to trends or just wanting to monetize growth opportunities.

Change processes rarely run smoothly in the company. Which factors are decisive for successful change management?  

Sabeel: During the past year, we have learned about three essential factors during a transformation process:  

  1. Lead, open and facilitate conversations. This means not enforcing a top-down information flow, but rather building channels and platforms to allow open exchange of information surrounding the same topic. Therefore, at LucaNet, we have introduced methodologies like peer coaching and focus circles to have a conversation around transformation. We also created a group of ambassadors who have become the voice and consultants of the transformation with a diverse background of experience, knowledge, level of the hierarchy, gender and region.  

Silvia2. The second extremely important aspect is to enable and foster continuous learning: The ability of the workforce to learn new skills, model new behaviors, and adapt continuously is key to sustained success in a transformation process. That is why we are introducing a Learning Management Platform, and events like Skill Summit to foster a continuous exchange of knowledge within LucaNet. 

Sabeel3. And last but not least, Rome wasn’t built in a day: This is something our board member Oliver Schmitz says to us, and we keep this with us as a reminder. Transformation requires patience with yourself and your people. It is crucial you sow your seed, nurture it and thus let it bloom with time. 

Humans are creatures of habit; very few people like change. Are there perhaps methods or tricks that can be used to inspire, convince or enthuse employees? What role does management play in a successful change process? 

Silvia: In addition, we know that compelling storytelling, leading by example, and coaching are essential to enable people to be part of the transformation and make change adaptable. This is applicable for everyone within an organization, but the leadership team must use them to make change more exciting and inspiring. Managerial support is essential to every transformation success. The openness of the leadership team to transform as well as their guidance and support throughout transformation impacts the ability of the team to make the change. 

As part of our leadership training, we identified three main tasks for leaders in a transformation situation: 

  1. Lead themselves: In order to transform and lead others, leaders must be willing to create change within themselves. This means using introspection as an essential tool for being self-reflective.  
  2. Lead others: Apply transformational leadership skills to enable and engage their team in the transformation. 
  3. Lead the organization: Take an active role in shaping the transformation. Realign operations, strategies and structures to enable the vision and support the transformation. 

Sabeel: When working with transformation, we know we won’t get far without addressing hearts and minds. Thus, we started off with an integrated set of initiatives to invest more in our people, and transform our culture through revising our values and establishing a learning ecosystem. As a result, we are fostering world-class capabilities and embedding new behaviors at each level of our organization to improve our business environment and enhance our employee and customer experience.  

What was your most significant personal change in life?  

Silvia: I would say, all the major changes in my life were around or connected to people. So, meeting my husband, marrying and becoming a mother to my beautiful twin daughters at the age of 24 while first studying and then starting my career was the most significant personal change in my life. Being a working mom of now three children, my everyday life is of course characterized by lots of small and big changes, which is thankfully a guarantee that it never gets boring. 

Sabeel:  I was raised in more than 11 countries and cities, and have moved every one to three years to a new place. So, change comes very naturally to me. I’m quickly able to adapt to new people, cultures and structures. So, it would probably be tough for me to narrow down something more specific.  

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