People and culture risks in transformation: PwC

This series explores how taking a portfolio-wide approach can help organizations align transformation efforts, reduce risk, and drive meaningful outcomes across business, tech, and controls.

Every transformation is a people and culture transformation.

It doesn’t matter whether you’re about to gain more people (a merger or acquisition), have fewer people (a divestiture or reduction in force), work with new people (offshoring or reorganization), or have the same people work in different ways (operations transformation). Any transformation has a people and culture dimension. And that means any program can be subject to people-related risk exposures, along with other transformation risks.

You’re a transformation leader — not just of programs and data, but of people. You should understand how strategy impacts people — and how to empower them to shape it. Even an otherwise successful transformation can be undone by poor communication, and that means your people can lose a step — or you can lose them.

Here are three big questions you should be asking.

95%

of tech leaders are prioritizing employee development and upskilling

PwC Pulse Survey, May 29, 2025: base of 678, CIO/CTO base of 8

What are some of the most pressing people and culture risks today

At their root, many of the greatest people risks for a transformation stem from uncertainty. Opaque communications. Vague accountability. The rumor mills that can spin up around change. When your transformations allow uncertainty among your people, your organization can open itself up to risks.

Let’s look at a few common issues we’ve seen in the work we do.

Poor communication: Unclear messaging can create uncertainty, anxiety and potential speedbumps that can slow your progress. Conflicting or missing information can result in stalled efforts and confusion among your teams. Mistimed or misaligned communications can alienate your teams from your broader business goals.
Example: Your company is about to roll out a new timekeeping platform and you need employees to have all their hours logged in the legacy system by a certain date. When deadlines — and why they matter — aren’t clearly communicated, people can lose track. That can lead to missed hours, lost wages, and even lost revenue.
Lack of accountability: Similarly, blurred ownership and misaligned or uninvolved leadership can slow momentum and cause missed deadlines or redundant, wasted efforts.
Example: Your team is tasked with streamlining the integration process for teammates from a recently acquired company. But senior leadership doesn’t clarify who owns the decision-making or how efforts should be coordinated. Without that accountability, both your team and another group under the CHRO work in parallel, unaware of each other. When recommendations are presented, they diverge significantly — showing how absent leadership allowed duplication and misalignment.
Lagging adoption: Without a clear path through implementation, even an otherwise well-managed project can experience a lackluster rollout.
Example: Each employee at your organization is told they need to complete a training course as a result of recently passed legislation by a certain date. With no clear explanation of consequences or rationale, a significant number of workers prioritize other tasks and fail to make your deadline. As a result, you fall out of compliance with local regulations and incur financial penalties.
Brain drain: Losing employees mid-transformation can disrupt timelines, lead to knowledge loss and leave critical tasks at risk. Employees in key positions or with specialized knowledge may choose to exit your organization — whether it’s a fear of change, a new opportunity, a life event or even just a planned retirement.
Example: During a reorganization, you plan to move certain responsibilities from one team member to another. You allot three months for an effective knowledge transfer, so the new owner can get up to speed. However, the outgoing owner accepts an external offer and puts in their notice. In addition to having insufficient time to facilitate the changeover, you now have internal controls with no one able to operate them.

What can I do to help reduce people and culture risks right now?

The first thing you should do to help reduce people risks is expand your definition of what transformation is. It’s not just completing an acquisition or standing up an acceleration center. It’s also the people involved and the culture you foster.

You can navigate change more smoothly and realize greater returns by taking a transparent, controlled approach to communicating, championing and enabling the stages in your process. Gain an early understanding of business impacts and use this as your guidepost in determining communications messages and timing.

Here’s what you can do:

Design your transformation: Before you begin, plan out each process and key milestone. This doesn’t mean micromanaging. This is about building out agile, responsive processes that can allow engaged teams to act and communicate clearly throughout — and across — transformations, within your existing resources.
For example: Say you're replacing an aging ERP. You should be using the opportunity to redesign legacy processes and create efficiencies that can add value to your organization. But consider whether you have enough resources to implement these new processes while continuing to maintain current business functions. Have you mapped out the resource inter-dependencies between the two workstreams? Have you allotted sufficient time to meet the project timelines?
Build and test: This doesn’t just go for system transformations. As you implement new plans and processes, evaluate their efficacy and adoption the same way you would a new software tool. Stay nimble and be willing to adapt as business needs change.
For example: What if you acquire new people from a merger — how do those existing job duties support your current strategy? You should build a new, holistic talent architecture that supports your business needs. Help avoid redundancies by retraining new talent with the skills to aid your organization in new ways.
Pre-go-live: You should use this time to upskill your teams and make sure they’ll be able to effectively transition to your new tools, processes and organizational structure. If responsibility for duties shift, you should effectively transfer that knowledge before the changeover.
For example: Your company decides to transition financial reporting duties to an overseas team that you’ll manage. You should train offshore employees on regional data and privacy regulations before the change occurs — to maintain compliance post-transformation.

Where can I get help?

An objective third party can help you get a better handle on your transformation risk, especially when it comes to your people and culture. At PwC, we’ve come up with four levels of assessments to help analyze your risk readiness at each stage in your transformation journey.

Phase zero assessment: At the earliest steps, we focus on understanding potential high-level impacts to your operations model, your company culture and its alignment with planned changes, and your available toolsets.
Design stage assessment: In design, our focus is on defining successful change, business engagement, and communications alignment. We review your documented communication plans, plus potential impacts to business relationships and key stakeholders — and how you plan to address them. We also check resource allocation, schedule management plans, training needs and your organizational support plan. Crucially, we evaluate leader and stakeholder alignment, organizational awareness and support.
Build and test assessment: Here, we go over your updated organizational alignment and role definitions, as well as your proposed job or role mapping. We carefully assess your training plans for things like goals, objectives, audience identification and delivery modes, and your training plan for elements like subjects, courses, timing and tracking. We also look at engaging change agents within their departments and business involvement in testing and deployment planning. We then compare all of that to industry leading practices.
Pre-go-live assessment: When you’re ready to implement, you should know your teams are ready too. PwC assesses your user-to-technical role mapping process, updates to your end user training plan, your process for tracking training delivery status and even how you plan to evaluate user proficiency and your post-go-live support structure.