It makes no sense for any business to resist transformation. Nobody can be in any doubt these days that traditional business models are the road to ruin. The problem is, not everyone appreciates what business transformation means or entails and fewer still have a clue where to start.

The facts bear this out. Last year an extensive survey of UK businesses revealed that while over 60% recognised the need for change barely 20% had a plan.

The trouble with this is, progress doesn’t stand still. While you are scratching your head and wondering what to do first, someone is out there building your future competition and when they launch it won’t be much of a contest. Digital businesses leave traditional competitors in their dust in a matter of a few months.

The longer you delay, the worse it becomes. There are businesses already on the road to transformation who just won’t make it over the finishing line. 70% of transformation projects fail and it takes the average business around three years to get to a point where they can really compete in the digital economy.

Competitors are certain to emerge before most businesses get it right, which is why it is estimated 40% of the traditional businesses we know today won’t be around a few short years from now. The best a lot of businesses currently going through transformation can hope for is to postpone their inevitable demise.

You certainly can’t afford false starts. Transformation is costly and it’s a strain on most businesses to go through the process once. Some I know are already trying for a third time and they can consider themselves lucky to have the funds and such tardy competitors to allow them the time to blunder about.

To succeed, your business will have to move very quickly – probably faster than it’s done anything in the past. This means eliminating waste of time, effort and expense. You simply can’t afford to do anything that isn’t essential to your objective. It makes sense therefore to start by identifying what that is.

While organisations have been resisting the shift towards customer centricity for the past decade or so, that’s no longer an option. The digital economy is all about customer experience and that means brands rule. Brands are communities of people who share values and beliefs and central to this is the brand promise – the thread that ties all stakeholders, internal and external, together.

Your first step on the road to transformation, therefore, is to define your brand and its promise. This represents your objective. Henceforth everything everyone, at every level and in every corner of your business does should be directed toward delivering your promise.

Business transformation is long, painful and costly, however you tackle it, but if you want to minimise all of these elements you can forget the idea of tackling this project yourself. In most organisations, especially those that haven’t already started their transformation, there will be people who are uncomfortable with the changes you are going to have to make.

I’m not just talking about junior employees here. Senior stakeholders are in fact far more likely to represent barriers to change. You should get used to the idea that you probably won’t bring everyone around to the new way of thinking. Some will depart, but one of your aims will be to achieve buy-in from your stakeholders as quickly as possible.

To overcome the obstacles thrown up by detractors, keep things on track and maintain the essential level of decisiveness, you’ll need the independent voices of two key figures – a brand and a transformation consultant.

As an agent of change your role will be to get the buy-in of the CEO and the board firstly to the principle of digital transformation and then to the need to engage external specialists. As the change agent you will also be in the position to help maximise the momentum of the project once you get started.

If you take this on, here are a few pointers that will help. Remember, even though so few businesses have actually done anything to start their transformation the majority understand that it’s something they can’t avoid. If your organisation is one of these, there’s a simple reason why they won’t have started yet and that’s probably that they are scared.

The facts are available for anyone to build a case for transformation. Don’t make it complicated. Keep it simple. Here are four essential points you should use to help drive your stakeholders to the right decision.

1 – The marketplace has changed

In all sectors customers’ profiles and motivation have changed radically and will continue to do so. There are many implications of this, but the main one is businesses have to be able to increase the value of their offer and however you achieve this it will place a strain on margins. In many cases the necessary reduction in price/increase in value will eliminate margins achieved by traditional business models entirely. The only option is to increase efficiency and most businesses won’t get anything like the scale of improvement required by tinkering with existing processes. The digital age means re-building your business from the ground up around digital tools, platforms and entirely new processes.

2 – The new competition will be faster and you won’t see them coming.

Digital start-ups have a head start on traditional players. They don’t have the straight-jacket of legacy processes, structures and attitudes that existing businesses will have to devote time to dismantling. Because they think digital, start-ups can take a market by storm literally over night and because a purely digital organisation can have infinite capacity they are able to swallow the customer base of traditional players.

3 – There’s no escape

It’s only a matter of time before a digital disrupter arrives in your sector, but when they do emerge their impact is clear to see. Use case studies like Netflix, Amazon, Uber as illustrations of what can happen and remember all of these have impacted not only on their core sector, but adjacent ones too. (see Don’t think that because none have emerged to compete with you it isn’t going to happen and the longer the delay the more refined the technology will have become and the greater and swifter their impact will be. The scary thing is, because these new competitors are start-ups, you won’t know of them, so you won’t see them coming.

4 – Time is very short

Business transformation doesn’t come cheap. As I said, 70% fail and it’s easy to see why 40% of the businesses we know today are predicted to disappear in the next few years. What’s more, as time progresses, so the urgency increases. It takes time as well as money to get to a point where you are even in the digital game.

To even have a hope of surviving, latecomers will have to move faster than most organisations have managed to so far. The longer you leave it, the more expensive it will be, the longer it will take you and the greater the likelihood that a digital native will move into your space before you can get your act together. This is a race for survival!

All of this may seem like more reasons for some business leaders to bury their heads in the sand. However, it could also be the key to your success as an agent of change.

There are as many reasons given for transformation failures as there are failed projects, but fundamentally most transformations fail for the same reason – lack of focus. So as an agent of change, once you have established the need, it falls to you to reassure decision-makers that the solution is within their grasp. Again, keep it simple.

So much time, money and effort are eaten up by initiatives that don’t lead to the objective. However, your brand is the key to eliminating this. Brands are all about focus. The key to accelerating your transformation, minimising its cost and gaining the buy-in of your internal stakeholders is to get this right first. Organisations that start their transformation without doing so almost always fail and to get it done as quickly and effectively as possible you’ll need the help of a brand consultant.

A brand consultant will engage a process that involves research, modelling a brand that resonates with the people you need to engage and developing a strategy for internal and external marketing. At the end of all of this you will have a model that defines your brand with a set of coordinates and a strategy for bringing it to life.

I use twelve coordinates to define brands, the most important of which is the brand promise – the single promise you make, that will meet the needs of all your stakeholder segments.

Your brand model will define the structure and practices of your organisation must create. Next you’ll need a transformation consultant to show you how to build it using digital tools and technologies.

Part of the value of an independent consultant is the network of support they’ll have. You’ll need business analysts, project managers who are experienced in digital transformation, process engineers and digital developers who can build the platforms and programmes that will run your business in the future.

You’ll also need people to design and build the programmes that re-train your employees and a digital platform to build the training on, collect data and facilitate analysis. A good transformation consultant will come with all these contacts.

If you have very, very deep pockets you might be able to employ staff to tackle all of this, but doing so introduces delay, denies you flexibility and can end up being more costly than hiring external specialists, which is why the contemporary model uses contractors and external partners.

As an agent of change you need to convey the message “you can’t do it alone”. To help you in this cause it would pay you to know consultants you could bring in if you gain the interest of your stakeholders and you should add these to the end of your proposal. Don’t assume objections to these appointments, present with confidence of a done deal; just be ready to field tricky questions.

At some point the question of investment is bound to emerge and it’s vital you don’t lose sight of the key points of this specific debate. These are:

  • If you don’t transform you won’t have a business. Once a disrupter emerges in your sector, the longest you’ll last will be three years and for many it’s less than twelve months.
  • Immediately a digital disrupter emerges in your sector the value of your business will start to decline and this trend will continue until your stock is worthless.
  • There is no Free ticket to this. One way or another it will cost you.
  • Beware of false economies. Do it right, with the right people and you’ll end up doing it the most cost-efficient way.

Good consultants will show you how to plan your business transformation to match your investment or timescale. It goes without saying that with speed comes increased cost, but there are a proliferation of proprietary digital platforms that will help you avoid the full impact of building digital infrastructure and careful planning will take you a long way.

You may also find the brand development process will reveal inefficiencies in your existing model such as unnecessary or counter-productive initiatives that you can axe immediately. Those savings will contribute to your transformation fund, but you’ll need a pot to work with and that will be the task of your CEO and CFO to provide.

One tricky area of the debate will be that you won’t be able to accurately predict the cost of the initial transformation up front. The nature of any digital project is that your needs will change as you progress. You’ll identify new alternatives, competitors will emerge and beat you to the draw in some area and you’ll need to re-think your subsequent moves. However, technology will evolve too, so there are always new opportunities emerging.

The answer to the cost debate is to “chunk it up”. Cost out each phase or individual project as it emerges, but prepare those responsible to find the funding quickly once the need is identified.

As we have seen, there is no logical reason to resist digital transformation. The reluctance of most businesses to transform is emotional, usually founded on insecurity. The role of a change agent, above anything else is reassurance. Remember, recognising the need isn’t usually the problem, decision-makers need to feel that the desired outcome is achievable and that’s your challenge.

Hopefully, armed with these high level insights you will be able to build a persuasive argument for change within your organisation and it will continue to prosper as a digital business.

First published on LinkedIn March 2018

Phil Darby
August 3, 2018

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