Creating Cultures For Successful ERP Organizational Change Calls For a Transformational ERP Leadership Model

Transformational ERP Leadership Factors Affecting Culture

A transformational leadership model advocates an organizational culture that transitions employees beyond self-interests, creates a highly motivated culture, promotes a robust learning environment and is highly considerate of others’ well-being.

Transformational leaders are well suited for ERP organizational change through encouraging, inspiring and establishing trust to best accomplish a successful implementation (Goldston, 2020; Nestell, 2020). Research suggests that transformational leaders are strong advocates of the organizational change process through creating team decision-making while being mindful of and managing behavior with empathy and understanding.

Transformational leadership factors that build a culture for successful organizational change include leaders as exemplary role models and advisors, associate buy-in to the organization’s vision and critical thinking and problem-solving.

Transformational ERP Leadership Value and ERP Organizational Change

Organizations may benefit from recognizing the value and application of transformational ERP leadership. As ERP organizational change agents, it is essential to understand, assess and be honest about leadership styles and their strengths and weaknesses. ERP organizational change efforts often consist of:

• An iterative process of improvement
• Business process re-engineering
• Increased demands on internal time and effort
• Diversity in terms of experience, perspectives, opinions, and knowledge
• Organizational change mitigation strategies

In other words, ERP organizational change can be quite disruptive to the norm and require significant organizational resources (time, money, effort). Burns and colleagues (2013) describe transformational leaders as possessing organizational cultural characteristics such as strategic vision, celebrating successes, employee support, innovation, goal setting and organizational culture orientations and identification that exceed some of the cultural orientations of transactional leadership.

Burns et al. (2013) also suggest that transformational leaders may be best oriented to provide, promote and develop a more adaptive organizational culture in times of crisis and significant organizational challenges. Bass and Avolio (1990) state that transformational leaders can stay in tune with employees’ desires and maintain the alignment of realities and expectations required for a successful ERP organizational change.

Transformational leadership focuses on driving the organization to outperform expectations, working through difficult situations and adapting to change. As a result, transformational leadership is a significant cultural influence on the success of ERP organizational change.

Successful ERP Organizational Change is Dependent Upon Transformational Leadership

Three highly relevant principles contribute to the notion that successful ERP organizational change is dependent on transformational leadership. 

1. The first principle is that those leaders who are more satisfying to their followers, and who are more effective as leaders, are more transformational and less transactional (Avolio & Bass, 1991). 
2. Second, transformational leadership enhances followers’ commitment, involvement, loyalty and performance and helps deal with stress among followers (Bass, 1998). 
3. And third, there are strong links between aspects of transformational leadership and work performance (Lowe et al., 1996). 

These principles suggest that executive stakeholders benefit from further understanding and not assuming their leadership abilities, characteristics, weaknesses and strengths. Furthermore, these principles would also indicate that executive stakeholders understand the different transformational leadership styles. Accordingly, the executive team should survey leadership style and then participate in educational sessions to discuss results and the value of transformational leadership during an ERP organizational change effort.

ERP Success Factors: Learning From Others

Shao and colleagues (2012) presented one of the first studies that examined the triad of transformational leadership, organizational culture, and knowledge sharing in the context of ERP success. They collected and analyzed data from 115 information systems executives and 413 ERP system end-users across 115 organizations. 

Results indicate that transformational leadership is indirectly related to, but critical to, ERP organizational change success. Furthermore, Shao and colleagues suggest that the research can be beneficial in guiding executive stakeholders in promoting organizational culture to facilitate ERP organizational change success.

Elkhani and colleagues (2014) suggested that transformational leadership and ERP system self-efficacy are critical ERP success factors. Elkhani and colleagues deployed a survey with 151 usable responses. Their findings indicate that transformational leadership can directly impact the recognition and understood usefulness via the utilization and understanding of self-efficacy application and measures.

The work of Elkhani and colleagues has practical implications because transformational leadership development programs would encourage ERP organizational change methodology that could increase assimilation and application of self-efficacy when deploying and utilizing ERP systems. Elkhani and colleagues contribute a better understanding of how ERP practitioners can leverage transformational leadership knowledge and behavior to motivate and promote employee self-efficacy to achieve ERP assimilation.