Transformation isn’t just about re-branding, nor is it a case of designing and introducing digital processes. It isn’t even primarily a matter of introducing new structures and practices. Transformation is an end-to-end process that involves all of this and more.
If you are considering transformation you should know three things – 1) it will be expensive, 2) it will be painful and 3) It will take forever, but even that’s an over-simplification. A transformation project is the biggest challenge any business will face. Most people will recognise the early phases and probably think of these as “the project” but the reality is transformation is a radical paradigm shift that, once achieved, will result in a state of constant change.
No two transformation programmes are the same. That’s the point. Transformation is the process of aligning a business to the opportunities it will be best able to exploit in the future and because its resources and position in the marketplace are unique, so will be the solution. Because every transformation process is different, so will be the challenges it encounters. The nature of those challenges will also be beyond the scope of our repertoire of familiar solutions. Hence the need for “adaptive management”, identified by professor Ronald Heifetz at Harvard. There are, however, a few points that every business needs to bear in mind as they approach a transformation.
1 – You will probably fail
Only 30% of transformations succeed. Don’t take my word for it, this is a figure commonly quoted and reinforced by recent research by Professors John Ward at Cranfield and Alex Uhl from SAP.
In fact as many as 70% (depending on who you listen to) of transformations fail and 30% fail completely. One assumes businesses that fall into the latter category are among those Cisco’s John Chambers defined as the 40% of today’s businesses that won’t be around ten years from now.
Transformation is a stretch for any business.
2 – You don’t have a choice
Transformation isn’t optional. Businesses that don’t succeed in transforming will become so uncompetitive they will very quickly become non-viable.
Today’s business environment is about efficiency on a level most conventional businesses can’t even visualise. You simply have to do a lot more with a great deal less. We can already see disruptors in most sectors delivering superior and more market-relevant products and services with a fraction of the work-force of traditional businesses and it is perfectly conceivable that global businesses of the future will operate with only a handful of employees.
Transformation, is very much about eliminating cost whilst improving your offering. If your costs are too high at best your margins will reduce, but more likely you’ll be unable to compete with the better products offered by your competitors at lower prices.
3 – It will be expensive
Think of transformation as re-building your business from scratch, because that’s not far off what you’ll be doing. There are two ways of achieving this. You can create a “parallel universe” a separate business unit that takes on new initiatives, develops them and then feeds them into the established business (which simultaneously needs to undergo re-structuring and re-training) or you can try to transform using existing resources. The latter is fraught with more pain than the former and will take considerably longer. The cost will probably be similar or slightly higher, but spread out over a longer period. The question here is, can you complete the process before your competitors are up and running with their solution or a disrupter drops in and ruins everyone’s plans? If you don’t think you can stake your claim on market real-estate before other settlers arrive you can forget it. Such is the dynamic of the new marketplace, there are no opportunities for late-comers.
4 – It will be painful
Nobody I speak to fully appreciates the extent of the pain until it hits them. You’ll experience pain on every level from the initial sell-in of the initiative to the board, who have to be 100% behind it to lead trusted workers, many of whom will be unable to adapt to the new business model. Be prepared for some of your oldest and valued employees to leave. Transformation will undoubtedly change the culture of most businesses to some extent and many of the new processes and work-flows your transformation dictates won’t suit existing employees. Not everyone will fit in to your new business, although there is much you can do in the context of your transformation programme to mitigate casualties.
5 – Transformation takes forever (literally)
Another reality check for most businesses is the amount of time this is going to take. If you break a transformation programme into three broad sections – brand development, internal marketing and launch – most established businesses should consider this to be around a three-year project, but even then you won’t be done.
Transformation is evolution of a business to a state where nothing is fixed and everything is in a state of constant change. Only with the agility that this kind of business model represents will you be able to respond to the demands of the new marketplace.
6 – Your starting point is always your brand
It’s often stated that that reason most transformations fail is lack of commitment from senior management. This is probably true, but within this thought lies a bigger and more fundamental issue – that of focus.
To get senior management behind a transformation you need a clearly defined objective and this, I suggest, is the promise – derived from your business vision and inherent in your brand model – that you make to your customers/clients. A successful business is one that delivers a relevant promise consistently to their market and the brand modelling that should precede every transformation is how you define that promise. The rest is engineering the business to deliver this in the modern environment.
Once you have that focus, it should be relatively easy to get your senior managers on-side. However, your brand model really comes into its own when you start your internal marketing phase, because it is your employees, not your board who will re-model your business and they need the focus that only a clearly defined and vivid brand can provide.
7 – Caterpillars and butterflies
Transformationalists often talk about caterpillars and butterflies. However switched-on you may think you are you should be warned that I have never encountered a business where the initial understanding of transformation is anywhere near as radical as the reality.
Instinctively, businesses will see transformation as digitising existing work-flows and processes, which is usually the worst thing you can do. The result is fast caterpillars, which frankly are a waste of time. As I have already said, transformation is about re-building from scratch – creating a butterfly.
Don’t underestimate this.
8 – You can’t afford to ignore internal marketing
Whatever their perceptions, senior management have to understand that they are not the business. They should be leaders, facilitators, but in most businesses and certainly those of any size, they cannot themselves affect the changes necessary. This is the province of the employees. Only they can re-invent themselves and the processes they employ.
Giving them the focus of a defined brand with a clear brand promise and helping them understand their role in delivering it is the quickest and probably the only route to a successful outcome.
This is achieved with internal marketing, which can take time. It is important to note that the biggest reason for business failure is usually failure to deliver the brand promise and it is your front-line troops who are charged with this task. Until they have bought into and responded to what the brand represents by creating a delivery process that rarely (ideally this should be “never”) fails, you should not take your brand to market. If it were ever true that a disappointed customer will vote with their feet this effect will be amplified many-fold in the cut-throat, fast-paced, unforgiving marketplace we are entering.
9 – The real purpose of an Intranet
Some businesses already have Intranets. If you don’t, building one should be top of your project list. A properly designed and managed intranet is the focus of your internal marketing. Don’t skimp on this. Get it right and life will be far easier.
This is where you introduce your brand, explain it and bring your workforce on-board. It’s your key to employee engagement, assessment, development and management in the digital world.
10 – The fat lady never sings.
When your brand is defined, your employees on-board and your processes redesigned and running smoothly you can go tell the world without fear of alienating customers and clients by failing to deliver. However, what your marketplace wants and needs tomorrow will for certain differ from what they are asking for today. Change is never done and you have to respond to this.
If you have done your job in integrating digital assets such as website, e-commerce, content production, content management, customer relationship management, print experience management, SEO and social media, you’ll have multiple audience segments, personalised messages and, most importantly, customer insights that, if you analyse them, will help you continue to respond to the need. Don’t think you can do as old school business leaders and develop a business formula and then set out to milk it until it dies. It doesn’t work like that anymore. Obsolescence occurs far too quickly in the new environment. Celebrate the threshold of your re-launch by all means, You’ll deserve it, but be ready to get up the next day and start again!
If you want to avoid becoming one of the majority of businesses whose transformation fails the primary lesson is probably “you can’t do this on your own”.
Think back to your business school days and the matter of transactional and transformational management. People who change things think differently to those who operate them. If you have been running a successful business, delivering the same or similar products or services for a while, you are unlikely to be the person to affect the degree of change represented by a transformation. Live with that fact and set about finding an external leader who can work with you to drive this project.
You also need to understand that we are creatures of habit and with that comes resistance to change. There will be resistance of all types in all corners and at all levels of your business to the changes you’ll need to bring about during the course of your transformation programme. You can alleviate much of this through your internal marketing and follow-up training, but your existing employees, while they will respond to the need as I have suggested, are rarely going to be the drivers of these changes. For one thing, it requires very different skills. They’ll also need experience, which they’ll lack if they have been working for you for any length of time. Most importantly, though, they’ll not have the time. Don’t make the mistake of thinking you will be able to train your people in such highly specialised areas. Even if you could, the pace you’ll need to move at won’t allow it. You simply have to bring in some new blood.
First published on LinkedIn August 2017
August 3, 2018