Business transformation is a process that requires great diligence. In fact, years of research show that the success rate for efforts to transform business is consistently low: less than 30% succeed.
Business transformation is a change management strategy that can be defined as any shift, realignment, or fundamental change in business operations.
The aim is to amend processes, people, or systems (technology) to better align the company with its business strategy and vision.
However, only 16% of respondents say their organizations’ digital transformations have successfully improved performance and equipped them to sustain changes in the long term. An additional 7% say that performance improved but that those improvements were not sustained.
Often, lack of employee communication, engagement, and alignment with the new goals are the main reasons for such a high failure rate.
In this article, we will cover the best practices for implementing business transformation successfully in 2022.
What Business Transformation Entails
If you want to transform your company, then realize the process is all about identifying techniques, new processes, and technologies that are not being used to their maximum capacity. Business transformation requires understanding how alternate solutions can be applied to further gain market share, increase revenue and customer satisfaction or reduce operating costs.
The main reason companies undertake transformation is to create additional value. We advise unlocking high potential employees, harnessing intellectual property and proprietary technology for additional purposes, or becoming more efficient to maximize the company’s potential.
The goal of every business transformation project should be to ensure that the best processes and systems are being implemented within an organization.
Unfortunately, this is often not a straightforward process, particularly within the organizations that have a mindset that fears change. Therefore, how you deal and communicate with employees dictates how successful the transformation will be.
What Types Of Business Transformation Exist?
Harvard Business Review describes three types of business transformation:
- Operational
Making changes to the way you do things to make operations better, faster, or cheaper, for example, digital transformation. - Core Transformation
Moving to a fundamentally unique way of operating. - Strategic
Changing the very essence of the company to a new focus.
The nature of the business transformation will vary depending on the business’s goals and strategies. For instance, it may be focused on one of the following:
- Post-Acquisition Integration.
- Cost Out.
- ERP and System Implementations.
- Shared Service Centres (IT, Finance, HR, Procurement).
- Offshoring, Outsourcing, Insourcing.
- Supply Chain Optimisation.
- Global Standardisation of Processes.
There are varied factors that call for transformation including technological changes, efficiency drive, cost reduction, lack of business growth, merger or acquisition, new business leadership, low customer satisfaction, rising customer expectations, and the political climate.
Ten Effective Tools For Business Transformation
As mentioned, it is no easy task to execute an efficient business transformation.
Below are ten tools for navigating business transformation challenges, with insights and advice from the business transformation expert, FutureFit Academy.
1. Know When To Act
Identifying that change is needed and knowing when to act is essential. Often the symptoms show themselves long after the sickness has taken hold. This means that by the time you realise you are in trouble, you are probably already in it deeper than you think.
At this point, business transformation should be a priority. You must figure out what to do and where you need to be which is one of the most difficult elements of transformation because it requires genuine creative commercial thinking, which is a scarce resource.
2. Transformational Leadership
Never underestimate the importance of having a leader who knows what qualities are required amongst employees who can fill in potential gaps.
Business leaders should be prepared to take responsibility for implementing business transformation.
You can learn the technical aspects of a transformation, such as governance and stakeholder engagement. However, the real gaps are around genuine leadership qualities – the type that can empower, motivate and win hearts and minds. This makes up a transformational leadership style.
3. Integrated Approach To People, Processes & Systems
There are various parts to business transformation with different complexities. This means that changes in one area will affect others.
For instance, changing the organisational design of your Finance team may impact your HR team. Changes to technology might influence how financial data is generated, how this links with HR, and how you go about creating reports. To succeed, you need a truly integrated approach that looks at all parts.
4. Structure & Resource
It is crucial to appoint a sponsor and program team who is responsible for the business transformation since structure and resources underpin success.
Transformations that include a ‘people’ and an ‘organization’ workstream have a better chance of implementation success. These workstreams will be responsible for the management of change.
5. Focus On The Bandwidth
The capacity to deliver business transformation whilst simultaneously running the business as usual (BAU) is fundamental. Your people working in management require time and focus if you are asking them to help you deliver change.
We recommend bringing in interim executives either as backfill or as specialists with additional capacity to maximize your business transformation.
Interims can bring a high energy, broad expertise, and the right language to empower internal teams. All whilst building internal talent and embedding a positive legacy for achieving continuous growth and success.
Do you need help facilitating a successful business transformation? Contact us at FutureFit Academy.
6. Creating A Clear Vision
It is important that you establish a sharp vision of your business with your stakeholder’s post-business transformation.
After that, the challenge is maintaining coherence and alignment around all elements of the evolution, i.e., technology, organization, people, process, performance management, and interaction with customers, partners, suppliers, and regulators.
7. Understanding Internal Capability For Transformation
Most managers are good at running a business daily, which is why it is not surprising that they often do not possess skills for business transformation.
Transformation skills are not commonly on the hiring agenda, so the chances are that you are unlikely to have all the skills you need for a transformation, no matter how capable your people are.
Understanding how you can change things and operate differently requires an external fresh set of eyes. Only when you really understand the ‘from’, the ‘to’, and the ‘how’ can you begin to have honest conversations internally.
The tension between tactical needs and strategic needs is common. Business transformation often involves taking steps in a direction that is counter-intuitive to the tactical need. This is why you should be prepared to be courageous and focused.
8. Pace Is Important
Change is normally slow and organic.
However, business transformation usually involves getting five years of change done in six months, which often leapfrogs organic adjustments. Therefore, it is important to build this pace expectation into the transformation process.
The other challenge is related to the size and the length of a transformation. Often organizations are so focused on getting to a certain point but fail to realize that embedding the change will take a long time, probably years.
9. Engaging Internal Staff
It is key to consider the impact change will have on the people because it is people who make change happen.
The success of a business transformation will be reliant on engaging employees to move to new ways of working.
However, despite organizations tracking and communicating the benefits of the transformation to employees, often employees feel disengaged with change.
Therefore, we feel that open communication is the best way to motivate employees to stay engaged followed by financial rewards upon project completion.
10. Reassessment & Re-Evaluation
Another challenge for leaders is how to sustain business transformation coherence in a dynamic market environment with changing customer needs, possibly an evolving, immature supply chain, or the emergence of new disruptive technologies.
Therefore, reassessing and re-evaluating your journey through the business transformation will ensure you do not get caught out. Things are changing all the time which is why keeping a constant eye on the appropriateness of your transformation is vital.
Read More
A Guide To Find Your High Potential Employees With 8 Powerful Qualities.
