Lots of people are talking about business transformation. What it means; in which situations it's required; how to achieve it. But what does successful business transformation actually look like?
Across industries and sectors, disruption is the new state of normal. From Brexit to the Millennial workforce; emerging digital realities to attendant security risks: businesses across the spectrum are having to reassess the way in which they operate and exist in the world.
Writing for Harvard Business Review (HBR), Ron Ashkenas says: "The overall goal of transformation is not just to execute a defined change - but to reinvent the organisation and discover a new or revised business model based on a vision for the future."
There are three notable phrases in this statement:
Arguably, the extent to which you achieve these things is the measure of success of your business transformation. With that in mind, let's consider three indicators of successful business transformation.
When you first start out on your business transformation, you have a clear goal in mind; a view of what your organisation will look like in the future. Perhaps you want to entirely restructure your business, alter key systems and processes, or change your leadership team.
Throughout this process, you should review your progress. What did you actually set out to do? And how does the reality match up? That's not to say that things won’t have changed along the way. Today's disruptive environment requires the ability to adapt at every turn.
The more time you spent scoping and planning your vision and strategy in detail, the more likely you are to have achieved it. You need clear targets and goals, an idea of the people and resources required at each stage, and an awareness of the potential risks and issues that could arise.
The direct outcome of achieving your vision and strategy should be that you are now functioning at your target operating model (TOM). You have moved successfully from A to B. This is, of course, easier said than done – even if you have covered all the bases at the planning stage.
In 2014, McKinsey & Company carried out an online survey of more than 2,200 executives in 900 companies across industries. The results stated: "Clearly, implementation is hard to get right. Less than half of respondents say that most or all of their change efforts in the past five years met their initial goals and sustained results over time.
"The most crucial factors when it comes to implementation success or failure, according to survey respondents, are organisation-wide ownership of and commitment to change, prioritisation, and sufficient resources and capabilities."
It's vital to have an unwavering commitment to your change programme and for everyone in your organisation to be on the same page. Most important is having the right people and resources in place – whether these are sourced internally or you choose to seek outside help.
Successful business transformation begets transformation. Your TOM is now your new current operating model – so how can you keep moving forward? Forward-thinking organisations recognise that there's no time to rest on your laurels – the business environment continues to change and it's imperative to keep up.
You have reinvented your organisation, but evolution is a never-ending process. It's a mindset and a willingness to embrace the unknown.
The need for constant evolution is increasing as organisations find themselves operating in an uncertain world. Success is not a foregone conclusion, but there are clear indicators when it has been achieved. Vision and strategy become reality; your target operating model becomes your current operating model; and transformation becomes a way of doing business.