Disruption used to be an exceptional event that hit an unlucky few companies — think of the likes of Kodak, Polaroid, and Blackberry. But in today’s complex and uncertain world, as we face challenges ranging from climate change to digitization, geopolitics to DEI, organizations must treat transformation as a core capability to master, as opposed to a one-off event.

At the same time, leaders must recognize that transformation is fraught with risk. In 1995, John Kotter found that 70% of organizational transformations fail, and nearly three decades later, not much has changed. Our own research, in which we spoke to more than 900 C-suite managers and more than 1,100 employees who had gone through a corporate transformation, showed similar results: 67% of leaders told us they had experienced at least one underperforming transformation in the last five years.

Considering that organizations will spend billions on transformation initiatives over the next year, a 70% failure rate equates to a significant erosion of value. So, what can leaders do to tilt the odds of success in their favor? To find out, we interviewed 30 leaders of transformations and surveyed more than 2,000 senior leaders and employees in 23 countries and 16 sectors. Half of our respondents had been involved in a successful transformation, while the other half had experienced an unsuccessful transformation.

So what tactics did the leaders of successful transformations use to manage the emotional journey? To find out, we built a model to predict the likelihood that an organization will achieve its transformation KPIs based on the extent to which it exhibited 50 behaviors across 11 areas of the transformation. This model revealed that behaviors in six of these areas consistently improved the odds of transformation success. Organizations that are above average in these areas have a 73% chance of meeting or exceeding their transformation KPIs, compared to only a 28% chance for organizations that are below average. Our research suggests that any organization that can effectively implement these six levers will maximize their chances of success.

Our research also found that a key difference in successful transformations was that leaders embraced their employees’ emotional journey. Fifty-two percent of respondents involved in successful transformations said their organization provided the emotional support they needed during the transformation process “to a significant extent” (as opposed to 27% of respondents who were involved in unsuccessful transformations).

Transformations are extremely difficult on a personal level for everyone involved. In the successes we studied, leaders not only made sure their teams had the processes, resources, and technology they needed — they also built the right emotional conditions. These leaders offered a compelling rationale driving the transformation, and they ensured employees had the emotional support they needed to execute. This meant that when the going inevitably got tough, employees felt appropriately challenged and ultimately energized by the stress.

By contrast, leaders of the unsuccessful transformations didn’t make the same emotional investment. When their teams hit the inevitable challenges, negative emotions spiked, and the team entered a downward spiral. Leaders lost faith and looked to distance themselves from the project, which led employees to do the same.

The Six Key Levers of Transformations

So what tactics did the leaders of successful transformations use to manage the emotional journey? The six levers that maximize the chances of success, according to our research are:

1. Leadership’s own willingness to change

Many people believe that a leader’s job is to look outward and give others guidance, but our research suggests that to help their workforce navigate a transformation, leaders need to look inward first and examine their own relationship with change. “If you are not ready to change yourself, forget about changing your team and your organization,” as Dr. Patrick Liew, executive chairman at GEX Ventures, told us.

In our interviews, leaders spoke of working on their own development, including engaging more with their emotions and becoming accustomed to the discomfort that accompanies personal growth. Leaders needed to “look into a mirror,” as one told us, and realize that they were part of the problem before the shift to a positive trajectory could take place. They needed to remove their own fear before they could help their employees get through this change.

“As someone who was tasked to lead this [transformation], if I’m being honest with you, it was pretty unsettling at the start, because I think by nature most of us like to know the path we’re going on,” as one COO from the automative industry told us. And a senior vice president in the global business services industry described needing to become more vulnerable and honest on their path to self-discovery: “I think I became even more aware of myself, who I am.”

2. A shared vision of success

Creating a unified vision of future success is another all-important foundation point of a transformation. In our research, 50% of respondents involved in successful transformations said the vision energized and inspired them to go the extra mile to a significant extent (as compared 29% of respondents in low-performing transformations).

Employees must understand the urgent need to disrupt the status quo. A compelling “why” can help them navigate the inevitable challenges that will arise during a transformation program. Many of the workers who took our survey said that they “wanted” and “needed” the vision to be communicated clearly. When leaders share a clear vision, the workforce is more likely to get on board. But if people don’t understand the vision or need for transformation, success is hard to achieve.

“It’s not about me telling people ‘This is what’s going to happen,’” as a managing director in the medical device industry told us. “It’s about me creating this shared sense of ownership…and then [coaching] my team on what they need to achieve. We very consciously want our teams to really buy into this is how we, as a collective, want to work.”

3. A culture of trust and psychological safety

Trust and care from leaders can make a difficult transformation more emotionally manageable. At the most basic human level, we all know what it feels like to be seen, listened to, and heard by another person. It can validate our effort, motivate us to work harder, and help assuage emotions like doubt, fear, anger, and sadness. Workers in our study shared that they wanted leaders who were patient and who also had, in the words of one employee, a “calm and teachable spirit.”

In a workplace with a high degree of psychological safety, employees feel confident that they can share their honest opinions and concerns without fear of retribution. When trust and psychological safety are missing, it’s difficult to persuade your workforce to make necessary changes. For example, one senior leader told us that employees at their company were extremely fearful of the transformation and didn’t feel that they could speak up about the problems they saw. Not surprisingly, the transformation did not go well.

4. A process that balances execution and exploration

Transformations obviously need disciplined project management to drive the program forward. But our research showed that leaders of successful transformations created processes that balanced the need to execute with giving employees the freedom to explore, express creativity, and let new ideas emerge. This empowers the workforce to identify solutions or opportunities that better meet the long-term goals of the transformation.

“Innovation requires the right people and processes,” said one respondent to our anonymous survey. “Both are critical to encourage collaboration and experimentation.”

We also found that creating space for small failures can ultimately lead to big success, whereas fear of any failure can lead to missed opportunities. Forty-eight percent of our respondents involved in successful transformations said the process was designed so that failed experimentation would not negatively impact their career or compensation to a significant extent. By contrast, only 29% of respondents in unsuccessful transformations said the same.

5. A recognition that technology carries its own emotional journey

The leaders in our study ranked technology as the biggest challenge they faced in their transformation efforts. There are a lot of emotions to manage when new systems or technology are introduced, from stress over how it works to fear about whether it will cause job loss or slow down the system.

In the underperforming transformations we studied, we saw the narrative shift away from the vision to focus on the technology itself. Whereas in the successful transformations, leaders ensured that technology was seen as the means to achieve the strategic vision. Furthermore, they prioritized quick implementations of new technology — focusing on a minimum viable product rather than perfect implementation. Lastly, they invested resources into skill development to ensure the workforce was ready to create value using the new technology.

“There were kickoff sessions with our senior managers to bring them in at the beginning of the process,” a vice president of a company in the media/advertising industry explained. “These sessions aimed to show them that what was being built was something that they had helped design, rather than something that was presented to them as a fait accompli…This minimized the numbers of active detractors.”

6. A shared sense of ownership over the outcome

In the successful transformations we studied, leaders and employees worked together to co-create an environment where everyone felt a shared sense of ownership over the transformation vision and outcome.

A prime example of this is many companies’ rapid shift to virtual and remote working during the pandemic. Because of the speed and urgency of the change, leaders needed to collaborate closely with the workforce to create new ways of working and be much more responsive to their views on what was or wasn’t going well. This mass co-creation helped build a sense of pride and shared ownership across both leadership and the workforce.

“In a transformation, things pop up all the time,” as Christiane Wijsen, head of corporate strategy at Boehringer Ingelheim, told us. “When you have a movement around you, supporters will buffer it and tweak it each time. When you don’t have this movement, then you’re alone.”

. . .

To conclude, it’s worth reiterating that all transformations are tough. Even during successful programs, there will come a time where people start to feel stressed. The skill at this difficult stage is being able to energize your workforce and turn that heightened pressure into something productive, as opposed to letting the transformation spiral downward into pessimism and underperformance.

What we saw throughout our research is that leaders who are truly working with their employees are much more successful. They acknowledge and manage emotions, rather than pushing them aside or ignoring them. The best leaders create vision across the organization and a safe environment to work together and listen to each other.

“You’ve got to be very, very respectful of people at a working level,” as Thomas Sebastian, CEO of London Market Joint Venture at DXC Technology, told us. “You’ve got to understand the emotional side and consider a completely different perspective, such as how is this transformation going to make their life easier.”

Success begets success. Once a workforce has undergone a successful transformation, they will be ready to go again. And given the pace of change in the world, organizations have got to be ready to go again.

A tired employee is updating shipping orders late at night at a textbook brokerage. They make a mistake in the code and accidentally ship outdated management textbooks to an important customer. Three days later, classes have begun, and with demanding course loads, the students already feel behind. Many are seeking immediate replacements. Cue the angry phone calls and emails.

Thankfully, it is possible to repair the damage done. In fact, if this delicate situation is managed correctly, the company might actually come out ahead with its customers, a phenomenon known as the service recovery paradox.

The service recovery paradox is a phenomenon in which a customer who experiences a problem with a product or service, but has that problem effectively resolved, is more likely to have a positive impression of the company than a customer who never experienced any problems. Essentially, when a company is able to effectively recover from a service failure, the customer’s satisfaction can actually increase beyond what it would have been if the failure had never happened.

How can your company use this paradox to its advantage? Every department in a company can make a mistake that sends out ripples. It all comes down to your apology message — and how you document, memorialize, and share the apology process both internally and with external stakeholders.

How to Craft an Apology Message

1. Restore lost value.

Your customer believes the balance of “fairness” has been thrown off by this problem. They want to know what you’re going to do to restore the perception of lost value they have incurred. Offer to repair the situation to secure the attention and trust of your customers. If you don’t lead with this step, the rest of the message won’t be nearly as effective.

In the textbook situation, examples could include sending additional resources related to the book that provide additional learning value. Perhaps there are videos, simulations, or other materials the school or students didn’t pay for that enhance the learning experience. The key is providing something that has perceived high value to the customer, but lower cost to you.

2. Acknowledge responsibility.

This doesn’t need to be overly complicated, but it is critical that you distinguish between offering an excuse for what happened and accepting responsibility for the mistake.

After the example coding mistake, pointing blame at another entity, like a supplier or distributor, would cause distrust and derail the apology. Your message has to clearly say that you take full responsibility for ensuring that the problem is resolved in their best interest. That your aim is to regain their full faith and confidence in you as a partner. And that you’re taking proactive and preventive steps to protect them from any further issues.

3. Explain the problem.

Customers want to know you have been able to precisely identify the problem and its root cause. This increases confidence that your proposed fixes will protect them from the same problem happening again.

In the case above, the textbook broker should explain that the code, while always functional, was referencing an outdated set of tables in the company’s database because of a manual coding error. You can acknowledge the mistake, and because you told customers that you’re creating multiple safeguards to fix the problem — tailored to the specific issue — the apology is much more likely to be received well.

4. Describe how you will fix the issue.

In this step, you are specifically explaining how you have fixed the problem and describing what measures you put in place to ensure it doesn’t happen again.

In the textbook example, this could include performing random audits of shipping orders to ensure additional, manual verification, as well as creating redundancies in the coding software that provide further checks on orders — such as checking whether a book going out is more than a year or two old, which could mean it’s a mistake and warrants extra attention. It could also include changing your process to not perform updates during peak busy seasons.

5. Express your regret.

The actual expression of regret (the “we’re sorry” part) is most effective once you’ve sufficiently addressed the concerns above, making your expression of regret even more sincere because it’s backed up with a lot of action. Customers respond better to a sincere apology. It’s important not to lose sight of the fact that your customer’s business was damaged, so acknowledge those effects.

In the textbook example, the broker should say something along the lines of, “We are sorry for the disruption to your business during a busy season for you. Hopefully, you can see and feel our commitment to retaining your confidence and trust. We apologize to both your company and your customers.”

This kind of statement conveys true regret and sincerity while also stressing that the problem is being addressed.

Sample Apology Message

Here’s an example of an apology message to use as a guide. In this case, a company is apologizing to a customer about a software outage that happened during one of their busiest times. It covers all of the critical parts you want to include in an apology message.

I want to attempt to repair any possible problems this outage caused for you, your team, or your employees. First, I have been approved to provide your company with a one-month refund, twice the length of your benefits sign-up period. It is an expanded refund in recognition that this happened at a peak time for your company. I have also directed our customer service team to manually check all sign-ups that occurred after the software came back online to be sure they were captured accurately. I will let you know the outcome as soon as it is complete, no longer than one week from now.

The software outage was entirely our fault. It should not have happened at all, let alone during such a critical time for your business. We take full responsibility and are committed to ensuring it will not happen again.

I fully regret that this outage occurred, and our teams are making the necessary changes to make sure it does not happen again. Our outages should be reserved for planned downtime, with advance communication, and we regret that we failed on both accounts in this situation.

To let you know what occurred, your software went down after a major power outage at one of our data centers. Your workload was rerouted to our other data centers, as part of our backup plan and service agreement. However, the second center your content was assigned to was down due to preventive maintenance and a hardware update. This caused your system to go down for a period as the system reconfigured to find the next alternative for your workload. We have now updated our redundancy system to avoid anything like this in the future.

I am exceptionally sorry for this outage, and as soon as I knew about it, I was in constant communication with our technical teams until it was resolved. On behalf of our company, I would like to apologize not only to you, but to your leadership team and all affected employees.

Document, Memorialize, and Share Your Apology Process

It is critical to explicitly document the apology effort made to the customer. That way, if someone makes another mistake in the future, the company can turn to an objective framework to craft a new apology message. By learning from the company’s past, your employees can avoid what didn’t work and provide better responses to future service failures.

Your apology process should also be shared and shown to outside stakeholders. This phenomenon, known as boundary spanning, is critical to the service recovery paradox because it not only shows vulnerability from the organization, but also shows other customers that the company can be relied upon in times of distress.

Businesses are bound to make mistakes and disappoint their customers. But how you build your apology message and your careful attention to executing it appropriately can make the difference between losing those customers or increasing their loyalty.