Theunis van der Linde
The long and short of business transformation
What is business transformation?
Within the many companies I have worked and advised for, the topic of what business transformation means always comes up in discussion at some point in time. Naturally there are many different concepts and interpretations of what business transformation means, and how it can be achieved.
I am not a proponent of a single definition or understanding of business transformation, but I rather choose to focus on a few critical aspects that are synonymous with transformation: such as the fact that it is an intentional decision to change whatever needs changing, in order to cause a shift in thinking or different way of doing things to address or satisfy a specific problem or need in a sustainable way.
The outcome of business transformation and what it should aim to achieve; is to drive changes to processes, people, or systems (technology) to better align the company with its business strategy and vision. A strategy and vision of which may also change to navigate, avoid, and capitalize on the plethora of external factors influencing the business.
Whether such change and transformation is aimed at addressing the long or short term challenges, or solutions.
Why is business transformation important?
There are many reasons a business might consider transformation. One thing is certain, that at the end of the day it must provide an answer a critical business question, or solve a defined business problem.
In my mind, the answer or solution to such a question or problem can be categorized in one of two ways:
Drive change to do things better
Drive change to do things differently
This will allow the business to understand the focus, effort, and 'time to value' of the change. The concept of 'time to value' includes the anticipated implementation time to achieve the change, and the time taken for the change to start driving a valuable return for the business.
Consider the illustration below.
As you move from left to right, each degree of business transformation demands a higher level of effort and focus. Which will require a larger degree of change, has the potential to add more value, and is typically associated with a longer 'time to value' period.
That's why it is so important for businesses to understand the business problem to be solved, prior to embarking on the journey to commit and follow through with an execution.
What degree of business transformation is right for your business?
The answer to the question directly relates to the business problem to be solved. The matrix below can help act as a guide as it expands on the 'Why' and 'What' aspects associated with the degree of transformation.
True transformation does not only mean focusing on the long term but can also be intentionally directed to address short term challenges. The key is to ensure that sustainable change is achieved, hence transforming the way things are done (as compared to the past).
One of the most critical aspects to understand and questions to answer for a business is "Why do we need to transform"? True transformation will be a waste of time, money, and effort if done for the wrong reasons.
If good enough reasons do not exist internal to the business, many times the catalyst and need to transform is pushed onto the business in aspects such as the availability and affordability of new technologies, shifts within the market, regulatory and legislative changes, political landscape changes, mergers and acquisitions, and new skill sets introduced into the market.
It may involve changes to the entire business, such as vertical or horizontal integration through a merger or acquisition. Or it may involve a change to a specific function, such as Operations, Maintenance, Warehousing, or Finance. Or it may involve specific projects, operations, or plants.
What is important to keep in mind when it comes to transformation?
One thing that is constant for all degrees of transformation initiatives, is the involvement and inevitable impact that it will have on either one, many, or all the dimensions of people, processes, and tools (systems or technology).
It is mainly through change in people (behaviour) and processes that transformation will be introduced and sustained, whether as strand-alone or as part of supporting new tools / technologies. And those same dimensions can make or break transformation efforts.
Here are some key considerations to keep in mind to drive successful transformation:
Establish transformational leadership: A business transformation involves many parts. The complexities of your business processes mean a change in one area of the organisation will have an impact on other areas. Cultivating transformation with leaders and appointing leaders to provide oversight and support for transformation efforts is key.
Build resource capability: To achieve changes successfully, you need the appropriate capability at each step of the transformation effort. It’s about having the right people, in the right roles, at the right time
Ensure you have the bench strength: The capacity to deliver transformation whilst simultaneously running the day to day business is fundamental. You need people to have the time and focus if you’re asking them to help you deliver change.l.
Know when to act: Recognising the need for change and knowing when to take action is key. Often the symptoms show themselves long after the sickness has taken hold – meaning by the time you realise you’re in trouble, you’re probably already in it deeper than you think.
Creating a clear vision: Establishing a clear vision and aligning the effort and resources around what transformation will look like is crucial. Once achieved, the challenge shifts to maintaining momentum and alignment around all elements of the transformation effort.
Planning and scoping: A detailed transformation roadmap to help you achieve your vision sounds elementary but is really necessary. Things such as clear objectives, milestones, scope, timeframes, and budget help set direction and maintain progress.
Set your pace: Transformation can often involve accelerating five years of change done in a year, often forcing organic change into acceleration. It’s important to build the expectations into the process. The other challenge is related to the size and the length of a transformation, which can easily result in the business being fatigued.
To end off with, I will leave you with a quote from Jim Collins:
"Great companies foster a productive tension between continuity and change"
True transformation finds that appropriate balance and focus that will sustain and improve your business, and target exactly what is needed to successfully deliver.