Is Your Transformation Off Track? How to Spot and Steer Through Critical Turning Points

What Are Turning Points in Organizational Transformations?

Turning points are critical junctures in the transformation journey - moments when progress stalls, team morale dips, or external events force a re-evaluation of the transformation strategy. These moments can arise from a variety of factors, both internal and external. Whether it’s a global economic shock, technology integration issue, or internal resistance to change, these turning points require leadership to take decisive action to keep the transformation on track.

According to a study involving over 800 senior executives, 80% of leaders agree that how they navigate turning points directly impacts the success or failure of the transformation. Successfully steering through these moments can increase the likelihood of transformation success by nearly 1.9 times.

Common causes of turning points include:

• External disruptions: Market volatility, regulatory changes, or global crises like the COVID-19 pandemic.
• Internal challenges: Misaligned operating models, employee resistance, or governance and oversight failures.
• Human dynamics: Shifts in team morale, engagement, and emotional energy signal deeper issues within the transformation process.

When ignored, these turning points can derail the entire transformation effort. However, they can provide a valuable opportunity to course-correct and renew momentum when addressed proactively.

1. Detect Emotional Shifts Early: Reading the Pulse of Your Team Your team's emotional energy is one of the most reliable early indicators of a transformation going off track. Transformations often begin with excitement and optimism. Teams are eager to embrace new technologies, processes, or strategies that promise to enhance efficiency and drive innovation. However, as the reality of implementation sets in, that initial enthusiasm can wane. Detecting these emotional shifts early is crucial to preventing minor issues from escalating into full-blown crises.
   
   Research shows that emotions - particularly harmful emotions - are often the earliest warning signals that a transformation is veering off course. Leaders attuned to their teams' emotional energy can detect when frustration, anxiety, or disengagement sets in, allowing them to intervene before the situation worsens.
   
   Example: At a leading MNC Manufacturing company, during a finance transformation involving robotic process automation (RPA), leadership noticed a subtle shift in team morale. The team’s confidence in the external consultants leading the transformation was waning due to a lack of clear answers to critical questions. By detecting this emotional shift early, the transformation leader was able to bring in a new consulting team that better aligned with the company’s needs, averting a potential failure.
   • Key Indicators of Emotional Shifts:
     • Anxiety and Confusion: Team members may express uncertainty about their roles, responsibilities, or the transformation’s goals.
     • Frustration and Slow Progress: Missed deadlines, frequent mistakes, or lacking momentum can indicate rising frustration.
     • Withdrawal and Silence: When previously vocal team members stop contributing ideas or offering feedback, it’s often a sign of disengagement.
   Leaders must develop heightened emotional intelligence (EQ) to detect these signals. While dashboards and metrics can provide lagging performance indicators, your team's emotional energy indicates potential issues.


2. Understand the Underlying Causes: Don’t Just Treat the Symptoms Once you’ve identified an emotional shift within your team, digging deeper and understanding the root causes is essential. Too often, leaders respond to the symptoms - missed milestones, low morale, or resistance to change - without addressing the underlying issues driving these behaviours.
   
   Surface-level solutions, such as reprimanding teams for missed deadlines or pushing harder for results, may temporarily mask the problem, but they won’t solve it. Instead, leaders must take the time to involve their teams in a collective problem-solving process. Bringing stakeholders together to explore the root causes fosters a sense of ownership and ensures the solutions are more effective and sustainable.
   
   Example: At a leading Automotive Giant, a transformation turning point occurred when engineers working on both electric and combustion-engine trucks struggled to adapt to new processes. The factory floor dynamics—combining traditional internal combustion engines with electric vehicle assembly—created confusion and frustration among team members. The transformation leader responded by organising Kaizen meetings, which allowed employees to voice their challenges and collaboratively develop solutions. This approach resolved the issues and reinforced team alignment around the transformation goals.
   • Steps to Uncover Root Causes:
     • Ask Why, Then Ask Again: Go beyond surface-level explanations by asking “why” until you reach the core issue.
     • Foster Open Dialogue: Create spaces for teams to openly discuss their concerns, frustrations, and ideas for improvement.
     • Involve Cross-Functional Teams: Different departments may have unique insights into the transformation challenges. Including diverse perspectives leads to more comprehensive solutions.
   By understanding the root causes of emotional shifts, leaders can design interventions that address the core issues rather than merely managing the symptoms of disengagement or frustration.


3. Act Quickly and Decisively: Speed Matters at Turning Points Once you’ve identified the underlying issues, the next step is to act quickly. Turning points represent a window of opportunity for leaders to course-correct, but that window doesn’t stay open forever. Leaders who hesitate risk allowing disengagement, frustration, or confusion to spread, making it much harder to regain momentum.
   
   The most successful transformations are led by leaders who make bold decisions, even when the way forward isn’t entirely clear. This may involve realigning priorities, shifting resources, or even temporarily halting parts of the transformation to reassess the strategy.
   • Key Actions Leaders Can Take:
     • Realign Priorities: Ensure that teams are focused on the most critical aspects of the transformation. This may require pausing less urgent initiatives to free up capacity for critical projects.
     • Reinforce the Vision: When teams lose sight of the bigger picture, their energy and focus can dwindle. Leaders must consistently communicate the transformation's overarching goals to remind teams why the change is necessary.
     • Provide Targeted Support: Emotional shifts often stem from a lack of confidence in new skills or processes. Leaders should invest in training and development programs to equip their teams with the tools they need to succeed.
     • Example: At an MNC bank undergoing a cloud transformation, a critical turning point emerged when legacy IT staff began to resist the new cloud technologies. The resistance stemmed from a lack of familiarity and comfort with the latest systems. By implementing a cloud skills development program, the leadership addressed the resistance and turned these previously sceptical employees into transformation champions, driving adoption across the organisation.

Why Speed Matters:

• Prevents Spread of Disengagement: If addressed, emotional shifts can spread across teams, making it easier to regain focus.
• Builds Trust and Confidence: When leaders act decisively, they signal to their teams that they are committed to the transformation's success. This builds trust and motivates employees to re-engage with the process.

The Importance of Emotional Intelligence in Leadership

The leader’s ability to harness emotional intelligence (EQ) is at the heart of successfully navigating turning points. Transformations are, by nature, human experiences, and emotions—whether positive or negative—play a central role in determining success. Leaders with high emotional intelligence are better equipped to:

• Detect early signs of trouble, such as anxiety, frustration, or disengagement.
• Respond empathetically to the concerns and challenges of their teams.
• Maintain trust within the organisation, even during challenging periods.

Emotional intelligence allows leaders to balance the technical demands of transformation with the human dynamics that often define success or failure. By cultivating EQ, leaders can create environments where employees feel supported, valued, and empowered to contribute meaningfully to the transformation effort.

Building Psychological Safety: The Foundation of Successful Transformations

One of the most effective ways to navigate turning points is to build a culture of psychological safety - where employees feel comfortable expressing concerns, sharing ideas, and taking risks without fear of negative consequences. Psychological safety fosters open communication, enabling leaders to detect early warning signs and address issues before they escalate.

How to Build Psychological Safety:

• Encourage Vulnerability: Leaders should model vulnerability by openly discussing their challenges and uncertainties, signalling to employees that it’s okay to do the same.
• Foster Open Dialogue: Regular check-ins, feedback sessions, and team retros practices allow employees to voice their concerns and ideas.
• Celebrate Mistakes as Learning Opportunities: When teams fear making mistakes, they are less likely to experiment or innovate. By framing mistakes as learning opportunities, leaders create an environment encouraging experimentation and growth.
  A psychologically safe environment helps leaders navigate turning points and fosters a culture of continuous improvement, where teams are empowered to learn from setbacks and move forward stronger.

Communication: The Lifeblood of Transformation

A common cause of transformation turning points is miscommunication or lack of communication. When employees don’t understand the vision, strategy, or their role in the transformation, confusion and disengagement follow. Clear, consistent, and transparent communication keeps everyone aligned and motivated.

Best Practices for Effective Communication:

• Provide Regular Updates: Keep teams informed of progress, challenges, and changes to the plan. Transparency builds trust.
• Tailor Messaging: Different stakeholders need different levels of information. Ensure that communication is relevant and tailored to the audience, whether senior leadership, middle management, or frontline workers.
• Create Feedback Loops: Communication should be a two-way street. Regularly seek feedback from teams and adjust based on their input.
  
  In transformations, communication isn’t just about delivering information - it’s about ensuring every team member feels connected to the transformation’s purpose and goals.

Conclusion: Leading Through Turning Points

Turning points are inevitable in any transformation journey but don’t have to be detrimental. Emotionally intelligent leaders who understand the root causes of emotional shifts and act swiftly can turn these moments into opportunities for growth and success.

In the BFSI and GCC sectors, where digital transformation is urgent and complex, navigating turning points with empathy, strategic insight, and decisiveness is a critical leadership skill. By focusing on their teams' emotional dynamics, fostering psychological safety, and communicating transparently, leaders can ensure that their transformation efforts remain on track - even in the face of adversity.

By focusing on emotional intelligence, creating an environment of psychological safety, and acting quickly, leaders can turn transformation turning points into springboards for long-term success. As we continue to lead in an era of unprecedented change, let’s commit to driving transformation with purpose, clarity, and empathy.