Wednesday, August 6, 2014

Three Aspects of Business Transformation

Business strategy has to drive transformation.

 There are too many organizations with transformation programs that are not driven by strategy. So they end up being silo transformations with no systems thinking applied. How to manage a successful business transformation, such as digitalization or globalization, here are three aspects.

1. Two Significant Factors

There are two significant factors behind successful organizational changes. The first is organizational change capability. The second is around the appropriate bounding of roles and responsibilities of those working in the organizational change space. There is always a first step needed and that is analysis and identification of the issues met by any particular organization. From this diagnosis, approach / solutions / methodology can be defined and customized more precisely and in a more relevant manner. These diagnosis/solution definitions are key for the future degree of success. The solutions will most probably cover standard aspects such as culture/behavior change, support resources for the design/build/implementation of the change (what mix of internal/external resources /capabilities), planning and control etc. but also very specific technical / functional aspects. For those, the constitution of internal capabilities is the key as each change, just call for the next one and that history/memory of the change stream is quite essential for a greater efficiency. Change there is mostly driven by technological or operational innovation.  

2. Three Questions to Navigate

There are three key elements to delivering successful transformation. Whatever is the rate the embedded assertion remains true "it is important to remember you can make all the changes you like, but unless people change their behavior, the change will not be embedded and will not be successful?" In most circumstances, you should consider the "degree of success" of a change, keeping in mind that the objectives may have been set very optimistically and that reality is always more complex to put in place and assess. So there are three perspectives to navigate transformation: 
  • WHY: There must be a clear and compelling reason WHY? Almost all organizations are focused on WHAT and HOW - but forget the WHY. 
  • WHAT: When the 'WHY?' is explained, communicated and adopted by the staff – Ask them what needs to change. Whilst those in the C-Suite are very focused on the business performance, they do not actually do the daily work, so ask those that do the daily work and be amazed at how much they have to offer (only works if they have understood and agree with the WHY?) meaning that buy-in to deliver the change is infinitely easier to achieve. 
  • HOW: Provide or utilize systems and technology that will facilitate delivery of the change. For example, encourage collaboration by ensuring it is facilitated using the latest (and cheaper) technologies available for video conferencing and real-time collaborative working on documents etc. Use easily constructed, simple Intranets to make it easy to keep everyone up to date with real-time information. Provide access to everyone - so that communication is easy, accurate and with no delays.

3. Eight Critical Attributes

 Organizations that seem to be able to adapt at the right pace have eight attributes. An organization that has mastered these attributes is referred as a customer-adaptive enterprise. Relatively few companies have reached this state. The remainders are therefore at risk of being disrupted and becoming irrelevant to their customers over time:

    (1) Visionary leadership: It places the customer at the heart of the organizational thinking, provides a strong sense of purpose, and appropriate values to drive desired behaviors - trust is a big issue! Not the command-and-control industrial age approach - that's too slow.

   (2) Workforce engagement: An engaged workforce that buys into the purpose and lives the values and makes judgments accordingly is empowered, enabled and supported.

·           (3) Cross-functional collaboration: Ability to collaborate across and beyond the organization (not silos), with customers and partners.

·           (4) Insight and Foresight: Acute sensing capabilities to generate insight and foresight - anticipate as well as react.

·           (5) Customer experience: Superb customer experience irrespective of interaction channel, digital, human or shops/stores. 

·          (6) Continuous innovation - broad based, a culture of innovation/experimentation where everyone is encouraged to chip in with ideas and collaborate, to create new value for customers. Customers usually play a direct part in this through co-creation as does the ecosystem of partners/suppliers.

·          (7) Process optimization: simplified, lean, end to end processes that enable speed of execution and enables the organization to act in a coherent manner.

·         (8) Adaptive Enterprise Architecture: not the geeky techie stuff, but a coherent view of how the organization fulfills its pursuit of creating and delivering value to customers.

So do not limit the success factor for a change or transformation to any particular aspect, nor accept the pure success or pure failure assumption. The reality is that there are many contributing factors to change failure - and it is often a combination of these causes which has such a devastating impact on a change initiative. Therefore , the well-crafted strategy needs to drive transformation and manage change holistically through all aspects listed above.


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