Organisations continue to approach transformation with a deceptively simple framing: should change be funded through savings, or should it be fuelled by new investment? It’s an attractive binary, particularly in a financially constrained climate, but starting with the funding model often masks the real issue, according to Richard Churchill, principal consultant at Leading Resolutions.
Most transformation failures stem from a failure to understand the organisation as it truly is, not necessarily from flawed ambition or intelligence. Delivery capacity, internal constraints, leadership pressures and organisational fragility are routinely underestimated. As a result, many transformation strategies are built for the organisation leaders wish they had, not the ones they are asking to change.
Arguments about whether change should pay for itself tend to reveal something deeper: a lack of institutional confidence in delivery.
Empathy-led transformation (understood as disciplined realism rather than sentimentality) begins with recognising that maturity develops incrementally. Early steps must build credibility before organisations attempt large-scale redesign.
However, many organisations are still repeating the same unproductive, failed transformation patterns. This can range from over-scoped programmes and premature expectations of benefits to massive changes unsupported by realistic delivery capability.
The result is endless cycles of stalled, reset or abandoned transformations, rather than sustained forward progress.
Two faulty funding positions that organisations keep repeating:
1. “If it can’t fund itself, it’s not real transformation”
This stance assumes execution capability already exists, often when it doesn’t. Leaders expect significant, cashable savings early, regardless of whether their organisation has yet earned cost transparency or cross-functional trust. This pushes teams into over-ambitious scopes designed to justify those savings, rather than scopes that accurately reflect delivery reality.
Absolute adherence to self-funding then becomes less a discipline and more a constraint, driving teams to over-scope change and under-deliver attempted programmes, only to be replaced by yet another reset transformation.
2. “Savings-led transformation limits ambition and kills value”
Often used to justify early investment in technology, M&A or operating-model change, this argument can be a convenient way to bypass true organisational readiness.
In reality, savings-led approaches can be highly effective when treated as capability-building rather than cost-cutting. Small, localised initiatives that deliver early wins contribute to the momentum and confidence to reinvest and expand further.
Large, durable and sustainable savings are rarely a starting condition for change, but rather evidence of transformation maturity, not the precursor to it. Its objective is to prove execution capability and justify the right to expand through building institutional confidence. Experimentation is expected, but failing can be small, fast and designed in, rather than excused after the fact.
Building maturity through compounding capability
No funding model universally guarantees success. Both savings-led and investment-led approaches work – and both fail – depending entirely on an organisation’s maturity, trust levels, and governance discipline.
Copying another organisation’s approach is risky, as funding should reflect individual context. Funding from savings is appropriate only once the organisation can demonstrate consistent execution capability – a result of transformation maturity, rather than a starting condition.
As organisations diverge in their ability to adapt to increasingly unsettled environments – political, economic, social, etc. – this gap between those that can adapt and those that can’t only widens further. Here, empathy-led transformation becomes a competitive differentiator. Not empathy as sentiment, but as leadership discipline — the ability to recognise an organisation’s current maturity honestly, design change that people can realistically absorb, and build confidence through small, credible successes that earn the right to scale.
Starting with reality over aspiration
Executives today face a growing set of practical questions to clarify the right approach for their organisation: how well costs are currently understood; what changes as transformation accelerates; and where trade-offs exist between near-term progress and longer-term sequencing. Rather than funding ideology, these questions determine whether transformation compounds or stalls.
The real choice isn’t between savings and investment; it’s between leading the organisation they actually have, or pretending it’s the one they hope to fast-forward to. Where leaders are clear-eyed about current capability, transformation programmes are right-sized, properly sequenced and grounded in delivery reality. Small, credible steps build the trust required to unlock more substantial, durable savings later.
Transformation doesn’t fail because leaders choose the wrong funding mechanism. It fails when leaders assume a level of organisational maturity within their operations that they simply haven’t unlocked yet. Fund the organisation you have, and eventually you’ll earn the organisation you want.
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