*image credit – m.c. escher 1937, Dutch graphic artist
Highlights
- Business transformation is a process made up of a series of advances that build on each other
- Successful transformation follows 8-steps, typically integrating people, process and technology
Business transformation is an umbrella term for making fundamental changes in how a business or organization runs. This includes people, processes, and technology. These transformations help organizations compete more effectively by making a wholesale strategic pivot.
Transformational strategy defines the drastic and significant changes within a business to alter the course of its short- and long-term viability. The strategy is twofold:
- Identifies whether the change is focused internally – product, operations, culture, or externally – market, business model, sales approach
- Defines the roadmap describing the change of course and the anticipated outcomes when the transformation is complete.
Will the real Business Transformation please stand up
In the midst of the pandemic, the terms pivot and transformation have become commonplace, and frankly, I find organizations who aren’t pivoting or transforming find the need to say that they are. The uptake: the words are losing meaning, they’re getting watered down.
A few examples of what I mean –
- Culture transformation – “we’re embracing a work from home culture.”
- Digital transformation – “we’re moving from a server-based environment to the cloud.”
- Process transformation – “we added a robotic cell so we’re able to achieve 5% more product.”
- Business model transformation – “we’re selling products online in addition to our retailers.”
Sorry to pop your balloon, but none of those are transformations or pivots. They’re continuous improvements at best, or responses necessary to remain viable. They don’t lead to a new competitive advantage, and they certainly don’t meet the drastic and significant change criteria.
Business Transformation Requires…
Doesn’t a true transformation require that every employee join in? I’ve learned that for change to be meaningful and sustainable, every employee needs to participate. More than that, they need to actively participate. Sharing their ideas for what and how to change and joining to implement those changes. Only when people internalize change as active contributors, does the change go deep and wide enough to qualify as transformative.
That’s why most change initiatives generate only lukewarm results. At best. They’re top-down, not all-in. Someone else’s idea. Too often, implementing a change is seen as an event, with a clear beginning and end. Far greater than an event, transformation is a process – a series of advances through stages that build on each other. Ultimately, it’s never finished, but rather a journey to what’s next.
Change Management delivers Real Transformation
Leaders, if you’re truly committed to business transformation – sustainable change that alters the lifeblood of your organization forever, not to temporarily get to the other side of the pandemic or some other situation – then follow the 8 Steps of Leading Change as laid out by John Kotter:
- Establish a sense of urgency – whether due to crisis or opportunity
- Create a vision – an ambitious view of the future state beyond commercial goals
- Form a guiding coalition – a team dedicated and empowered to lead the change
- Communicate the vision – paint a picture of the future, explain why achieving it is important; make it simple, make it inspiring and change your own behaviors to reflect the vision
- Empower everyone to act – encourage action and non-traditional ideas, remove obstacles, provide resources and a safety net
- Celebrate short-term wins – recognize and reward employees for small, incremental changes aligned with the vision; these lead to bigger long-term wins
- Consolidate improvements – change systems, structures and policies mis-aligned with the vision
- Institutionalize new approaches – articulate connections between new behaviors and corporate success. Document new processes. Integrate technology where appropriate to enable efficiencies in new processes while delivering consistent results across people and over time.
Bottom Line
Real transformations are powerful force multipliers. Because they gain advantage from every employee, benefitting from the unique wisdom and experiences that every individual brings to the organization. The force multiplier is the power of diversity harnessed to achieve a singular purpose.
The force multiplier of people can be magnified by technology, but not led by it. So-called digital transformation isn’t. Technology is a tool that like all tools, enables people to do more, faster.
