Why agile transformation hinges on a leader’s emotional intelligence: Interview

Peter Drucker famously states, “The greatest danger in times of turbulence is not the turbulence. It is to act with yesterday’s logic.”

Yet, Shami Ahuja, VP, Global Client Delivery & Business Agility at Nisum, too often finds clients fall back on old practices when in doubt about how new processes work.

“There must be open communication channels when rolling out any form of organizational transformation. People need to feel they can ask for help and there will be lots of moments where queries arise, or things don’t work as they should right away. These are crucial pinpoints, that when brushed under the carpet, hinder new tools’ success.”  

Gartner found the failure rate for digital transformation efforts is averaging around 70%. While reasons vary, Shami notes the gap between what companies are trying to do and what they’re actually achieving is commonly driven by leadership style.

Leaders must encourage employees to “fail fast and fail safely, by celebrating team progress and creating a psychologically safe environment for teams. Introducing objective key results (OKRs) helps to align and engage teams around measurable goals and security best practices.”

The Business Agility leader highlights the importance of developing emotional intelligence (EQ) to manage self and teams and urges that this be compulsory learning for leaders or agile change agents who govern the teams’ transition. 

Since the launch of ChatGPT in late 2022, a massive jump in how businesses are using AI has troubled leaders and their employees. Those in charge are scrambling to understand what this means for them, their teams, and the digital transformation projects they’re leading. AI isn’t just automating simple tasks anymore; it’s changing processes fundamentally. This means executives and beyond need to rethink everything and adapt quickly.

This disruption to the status quo sends leaders and employees on an emotional rollercoaster, where leaders default rational and logic-based decision-making can, in fact, do more harm than good. Initial enthusiasm tends to peter off, turning into stress and anxiety — and resistance to change — without proper self-awareness, self-regulation, empathy, and social skills to face the uncertainty and inspire employees through the transformation period. 

“Talented IT teams are upskilling, outsourcing, and collaborating with talented product managers. There is a reshuffle internally and externally, and leader EQ is the glue that smooths these new relationships.” But beyond self-regulation and empathy, the Business Agility leader points out, organizational awareness drives transformation leaders, and maintains focus.

Despite 89% of large companies globally with AI transformation underway, they’ve only achieved a fraction of the anticipated benefits, capturing 31% of the expected revenue lift and 25% of cost savings.

Companies can assess their readiness for a large-scale digital transformation initiative by evaluating their level of maturity and effectiveness of organizational practices, Shami adds. By asking straightforward questions that define the foundation, planning needs, leadership styles, quality of existing processes and data, and organizational culture, companies can pinpoint areas needing enhancement for a successful agile transformation.

1. Foundation (vision, team structure, roles, delivery, and tools)
2. Planning (portfolio planning, product roadmap, iteration and estimation)
3. Team culture (values, accountability, and empowerment)
4. Leadership (navigation, strategy, and EQ)
5. Quality (backlog, metrics, and resolution)
6. Organizational culture (autonomy, sustainability, consensus decisions, continuous learning, and innovation)

“People need the mental stamina to focus on productive work. But when their minds are constantly scanning for problems or chasing new solutions, it’s easy to get tunnel vision and miss the bigger picture.” Organizational awareness and careful planning help eliminate uncertainty and prepare leaders for upcoming roadblocks, Shami endorses.

Employees are the key to successful transformation, but their peak performance is facilitated by a stress-free environment where they have direction. Leaders must lead by example, and create a safe and supportive space for their teams to innovate and navigate the complexities of transformation.

This article includes a client of an Espacio portfolio company