5 Red Flags Your Transformation Will Fail
Introduction
Six months into a £12M transformation project, the CIO called an emergency board meeting.
The project wasn't visibly failing. There were no public disasters. The SI was delivering features on schedule. But the CIO knew something was wrong. She could feel it.
"We're headed for failure," she told the board. "Not immediately, but inevitably."
The board was confused. Projects were on track. Budgets were holding. What was the issue?
The issue, she explained, was that they were seeing warning signs they'd ignored from day one.
In my experience, transformation projects don't fail suddenly. They fail gradually, with warning signs appearing weeks or months before the crisis hits. The organizations that recover are the ones that recognize these warning signs and act decisively.
Research consistently shows that failure patterns are predictable, which is why understanding why 70% of transformations fail is critical before any large-scale change begins.
Here are the five red flags you should watch for.
Red Flag #1: Strategic Confusion
The Warning Sign: Ask five leaders what success looks like for this transformation. You get five different answers.
Some leaders think success is cost reduction. Others believe it's competitive differentiation. Some see it as operational efficiency. Others prioritize customer experience.
This isn't a minor disagreement. Strategic confusion is transformation's death sentence.
When leaders don't agree on the transformation's purpose, they can't make aligned decisions. When priorities conflict, trade-offs become political battles. When success looks different to everyone, you're guaranteed to disappoint someone.
This breakdown often stems from the absence of a formal governance structure, something we explore in detail in our guide on building transformation governance.
What to do:
Stop everything. Bring your leadership team together. Spend a day—literally a full day—aligning on:
What problem are we solving?
What does success look like in business terms (not technology terms)?
What trade-offs are we willing to make?
How will we measure whether we've succeeded?
Don't proceed until your leaders can all articulate the same strategic intent.
Red Flag #2: No Change Management Plan
The Warning Sign: Your transformation plan focuses entirely on technology and process changes. There's minimal discussion of how you'll help people adapt.
The SI is implementing new systems. Processes are being redesigned. Workflows are changing. But there's no comprehensive strategy for helping your 1,000 employees understand why, how to adapt, or how to thrive in the new environment.
This is where 70% of transformations actually fail—not in the technology, but in the people.
Many organizations underestimate readiness at this stage, which is why conducting a transformation readiness assessment early can prevent costly adoption failures.
What to do:
Immediately develop a change management plan that includes:
Communication strategy (how you'll keep people informed)
Training programs (how you'll build required skills)
Leadership engagement (how you'll get line managers actively supporting adoption)
Resistance management (how you'll identify and address concerns)
Feedback loops (how you'll listen and adjust)
Make this a core workstream, not an afterthought.
Red Flag #3: Scope Creep Without Governance
The Warning Sign: You're six months in. The original scope was clearly defined. But the project is now twice its original size.
Changes started small. Someone in operations suggested an enhancement. A department requested a customization. Suddenly you're implementing features that weren't in the original business case.
Scope creep feels like progress. It's not. It's usually a disguised failure.
Unchecked scope expansion is one of the most common signals discussed in analyses of why digital transformations fail at the enterprise level.
Uncontrolled scope expansion means:
Timelines slip
Costs overrun
Quality suffers
Team morale declines
Originally promised benefits get delayed
What to do:
Implement strict scope governance immediately:
Create a change control board (clear decision-makers)
Define the change approval process (quick and transparent)
Assess every change against: "Does this align to our strategic intent? Does this preserve our timeline and budget? What's the opportunity cost?"
Say "no" to changes that don't meet the criteria
Protecting your original scope is not being rigid. It's being disciplined.
Red Flag #4: Leadership Engagement Declining
The Warning Sign: Your executive sponsor was deeply involved in the first three months. Now they're barely visible.
In the beginning, they were in steering committees, asking hard questions, pushing the team. Now they're delegating the whole thing to a PMO and checking in occasionally.
This signals that leadership has moved on emotionally, even if the project still has 12+ months to run.
When leaders disengage, several things happen:
Decision-making becomes slower (nobody's empowered to decide)
Issues escalate more frequently (no executive air cover)
Organizational alignment fractures (leaders stop reinforcing importance)
Team morale declines (people sense leadership doesn't really care)
Transformation is a marathon that requires sustained executive energy. When leaders check out, failure follows.
What to do:
Schedule a direct conversation with your executive sponsor:
Remind them of transformation's criticality
Ask what they need from the project
Get them re-engaged in governance and decision-making
Create visibility and recognition for progress
Make transformation a standing agenda item in executive leadership meetings
Leadership engagement isn't optional. It's fundamental.
Red Flag #5: The System Integrator Isn't Your Partner
The Warning Sign: Your conversations with the SI are becoming adversarial.
In the beginning, they were collaborative. Now every discussion feels like a negotiation. Every change request is challenged. Every issue becomes a contractual battle.
You're no longer working with them. You're working against them.
Choosing the right SI upfront—and structuring the partnership correctly—can prevent many of these issues, as outlined in our guide on how to choose a system integrator.
This adversarial dynamic means:
Problems surface late (SI hides them rather than discussing early)
Solutions are defensive (SI protects itself rather than solving problems)
Innovation stops (collaborative thinking gives way to contractual minimalism)
Your relationship becomes transactional (nobody's invested in success)
What to do:
Have a courageous conversation with your SI leadership:
"I'm sensing some tension in our partnership. That concerns me."
"Transformation is hard. We need to work through challenges together, not adversarially."
"I want to understand what's frustrating you. What can we fix?"
"Let's reset our working relationship. Here's what I need from you..."
If the SI can't genuinely reset the relationship, you may need to consider escalation or contingency planning. A partnership that's become adversarial is broken.
The Meta Red Flag: You're Ignoring Warning Signs
Here's the real danger: Most organizations see these warning signs and ignore them.
They rationalize:
"Strategic confusion is normal. We'll align during implementation."
"Change management is someone else's job."
"Scope creep means we're being responsive to business needs."
"Our sponsor is busy. That's fine."
"The SI tension is just normal project conflict."
It's not. These are warning signs. Ignore them at your peril.
The organizations that recover from transformation challenges are the ones that recognize these signals early and act decisively. They pause the project, address the underlying issue, and recommit.
What To Do If You See These Red Flags
Acknowledge them. Don't rationalize. Name the problem clearly.
Assess the severity. Is this fixable with course correction? Or is the project fundamentally broken?
Communicate transparently. Tell your board, your SI, your team: "We've identified issues that need addressing before we continue."
Take corrective action. Address the root cause, not the symptom.
Re-establish confidence. Once you've corrected the course, recommit visibly to the transformation.
The Cost of Action: A few weeks of course correction.
The Cost of Inaction: 18+ months of failure, millions in wasted investment, organizational demoralization.
Choose action.
Conclusion: Early Warning = Early Prevention
Transformation failure isn't sudden. It's predictable. And it's largely preventable if you recognize the warning signs and act decisively.
Watch for strategic confusion, change management gaps, scope creep, leadership disengagement, and SI partnership breakdown.
When you see them, don't ignore them. Act immediately.
Your transformation's success depends on it.