What is business transformation?
Deloitte describes business transformation as “the opportunity to rethink your business and operating model to deliver breakthrough value. It involves strategic decisions that affect where you’ll grow, how your organisation operates, and what kinds of performance improvements you can expect.”
The word “transformation” has become something of a corporate buzzword. With globalisation and technology fuelling an increasingly competitive business landscape, organisations worldwide are looking for ways to boost performance, cut costs and drive efficiency.
Companies recognise that, in the face of continual disruption, they must innovate to stay relevant. Yet, study after study shows that the vast majority of transformation efforts fail.
In working with organisations across the globe to support them with their transformation aspirations, Deloitte has identified four key components that they believe are critical to successful business transformation.
1. Be clear on the “why”
While companies recognise that they must continually reinvent their operating model to ensure their relevance and success into the future, a vision to transform is not enough. Successful transformations are driven by a clearly articulated, well-understood business strategy that’s focused on how the company creates value today, and what that might look like in the future.
In successful transformations, senior leaders understand the drivers behind the change and effectively translate corporate-level goals into objectives that make sense for their teams. They demonstrate genuine passion for the transformation program, can paint a compelling vision of the future, and effectively convince their people to support the transformation business case.
Without a clear “why” that resonates across the business, an organisation’s transformation efforts will likely fail to gain buy-in and traction – both at the executive and operational levels.
2. Think at a tactical level
While an organisation-level vision of the changes required to transform a business is essential, executive teams sometimes overlook the need to understand what the shift will mean at an operational level.
Change is uncomfortable. For it to be embraced, senior leaders need to truly understand the impact it will have on their teams. They need to be able to identify and articulate the processes, reporting relationships and workflows that will need to change to support the transformation, understand the implications, and explain what’s required of their team in the new world.
3. Win hearts and minds
A robust communication plan is a critical component of change, but an effective change management strategy must be championed by leaders who sell the company’s future vision visibly and convincingly.
Those who lead the change should be coached on the messaging to use, with the autonomy to bring the transformation vision to life in a way that resonates for their teams. A transformation program should seek to engage and ‘win over’ formal and informal opinion leaders, gaining their genuine enthusiasm and commitment.
4. Invest in a program office
A well-structured, well-resourced program office is a key component of successful transformation programs. A program office will drive and manage aspects including project planning and delivery, communication, change management and governance, providing comprehensive oversight of the organisation’s transformation efforts.
There’s no one-size-fits-all approach when it comes to establishing a program office. Consider the company’s size and complexity, and existing structures that support change, communication, financial and risk management when building a program office.
Getting these basics right ensures that a business is on track to deliver to its transformation aspirations, while providing the flexibility and agility required to respond to an ever-changing market.