Transformation involves vast changes to technology, business models and ways of working that may prove challenging during a pandemic like COVID-19; especially for management teams tasked with keeping their companies operational while protecting employees and customers.
McKinsey research indicates that for transformations to succeed, they must be built into both strategy and operating model. McKinsey research indicates this approach as essential in creating value.
1. Embrace Change
Business transformation is essential to business success; whether that means changing how you sell, provide services or develop strategies. According to McKinsey’s analysis, organizations who successfully transform outperform those that don’t by an impressive margin.
Transformation requires clear vision, strong leadership, effective governance and in-depth analysis of current situation as well as effective communication. Achieve success requires striking an optimal balance between short and long-term interests while remaining flexible enough to adapt with changing market dynamics and customer needs.
However, large-scale business transformation is complex process which demands more than the appropriate people to implement it. It involves developing strategies to ensure changes are sustainable as well as time to overcome cultural resistance and shift mindsets; hence it is essential that an independent team manages this entire process.
Once the right people are on board, it’s essential to communicate the reasons for and scope of change effectively and transparently – helping employees feel at ease that this new direction will bring positive outcomes. Furthermore, leaders must be open to suggestions from others within their team.
Before embarking on any project, it is critical to establish clear goals and set key metrics to monitor its progress. This allows teams to quickly identify any hurdles or obstacles and manage them effectively. Furthermore, it’s crucial that people involved understand how changes might impact other departments – for instance how it could alter the way finance processes data and reports.
Prioritize and invest in the technology needed for business transformation. This should be a continuous commitment from leaders. Survey respondents identified effective use of technology as one of the two biggest contributors to its successful application in transformations; inadequate usage was considered one of the major culprits behind underperforming transformation efforts. Taking the time now to invest in technologically enabled processes will make your journey much smoother!
2. Invest in People
Transformation requires significant investments in people, and ensuring the appropriate talent is on board is crucial to its success. This may mean recruiting consultants to assist with transformation or creating more opportunities for growth within your organization.
Recognizing and rewarding employees who contribute to business transformation efforts is also critical, and one effective method is through peer recognition and celebrating accomplishments on a regular basis. By doing this, organizations can build momentum essential for a successful transformation.
As part of any transformation effort, it’s vital to have the appropriate structures in place. This might mean appointing a Programme Director with overall responsibility for overseeing delivery as well as identifying leaders not bogged down with daily ‘business as usual’ duties such as regulatory updates and maintenance – this will prevent their agenda being disrupted and prevent transformation efforts being impeded.
Assuring the right people are present is key to driving successful business transformation, but ensuring they have access to all of the tools needed for success can also play a vital role. This may involve providing access to an expert technology team experienced with emerging technologies dedicated to supporting transformation projects. It’s also crucial that sufficient capacity exists within an organisation for transformation while meeting business as usual requirements, or bring in interim executives as extra capacity if required.
In order for a business transformation to succeed, clear measures must be established that align with both its desired operating model and key performance indicators (KPIs). This will enable it to understand when and how it can reach its desired state as well as provide a roadmap of what must occur to achieve success.
An often-cited indicator of success for business transformation projects is increased productivity or reduced headcount; however, these measures can be misleading and should be avoided wherever possible. A more meaningful metric would be focused on outcomes such as new ideas generated or better customer experiences.
3. Focus on Business Capabilities
Success of any business transformation lies in its ability to identify key capabilities that impact how successful the company will be in finding new ways of differentiating itself, gaining a competitive advantage and competing. But this can be challenging in an ever-evolving business environment, so transparency must be fostered among project team members, management at all levels and the wider organization as a whole – this can be accomplished using internal communications technology which provides access to key information while supporting two-way employee communication.
To get underway, teams need to create clearly-stated goals and an outline of potential steps towards meeting them. Following that, they should draft a mission statement for each capability directly related to and supporting transformation ambitions – this statement should include clear roles, decision rights and policies that facilitate its execution as well as providing insight into how it adds value for customers and differentiates itself from competitors.
Teams should also identify key metrics that measure whether their strategy is working successfully and identify any obstacles such as funding, departmental control or communication which require further exploration.
Step two is developing an implementation plan. This must reflect each capability’s specific needs as well as those of their company, with roles and responsibilities assigned per workstream and an appointed programme leader for maximum effectiveness of transformation. Following such a structured approach can ensure its success and ensure lasting change for everyone involved.
Transformation in an ever-evolving business environment is crucial in order to stay relevant and keep pace with competition. Traditional firms that rely on industrial-era manufacturing and marketing methods are starting to lose ground to innovative start-ups with customer-focused business models that focus on offering superior services or compelling value propositions, taking advantage of new technology or simply staying relevant.
4. Invest in Technology
Technology shapes many aspects of how businesses run, from how they engage customers to product and service delivery and data management. Technology upgrades have become an integral component of modern business – with Deloitte reporting that those businesses who have successfully navigated digital channels experience four times greater revenue growth than less engaged ones.
Business leaders must be careful when investing in technology or allocating their resources – business transformation requires an integrated approach, so changes to how one part of the organisation does its work could have ripple effects across other parts of it – for instance, altering how finance processes data could alter how it links with HR or reports are created – an efficient digital transformation can ensure these transitions occur seamlessly while simultaneously building out a truly integrated system.
Technological innovations enable employees to complete tasks more efficiently, which allows them to do more in less time and save both money and improve overall business operations. An increase in productivity will save money and improve business operations; additionally, it will allow a business to expand without incurring as many labor costs for growth purposes. Furthermore, technological innovations will strengthen data security to ensure sensitive information remains safe at all times.
Although no single action defines success in business transformation, leaders who prioritize tangible changes to existing structures, systems, and processes; prioritize transformation as the main event; and keep long-term thinking can give themselves the best chance at realizing their ambitions for change. Doing this will allow them to provide value that is both revolutionary and evolutionary – for more on how this can be accomplished download our guide on six keys to successful business transformation!