With our machines and appliances talking back and people working side by side with robots, the times they are a changing. Business has to be transformed to meet the demands of a future that requires a new way of doing things, and new tools to help them get their faster. Robert T. Wanderwerf of KPMG puts it this way, “We are living in interesting times, with multiple transformation triggers all present at the same time, all equally intense.” He points to a tipping point in globalization, a major slowdown in Western economies, significant shifts in technology and energy costs, and the challenges of regulatory compliance. “When four or five significant drivers are changing at the same time, the business environment becomes highly complex.”
Growing Business Transformation:
Business perceive the signs. In a study by Forbes of 900 corporations, 93 percent said they were involved in major business transformations. They are re-designing internal processes and structures, re-aligning their business models. Some view the transformation as a wholesale turnaround. Others limit themselves to transforming specific processes, functions or areas.
The questions for many businesses are,
- How necessary is a major transformation?
- Will a surgical, limited repositioning be enough?
- Do we need to transform our organization before we can adequately transform our business?
The Devil in Execution:
Most companies get the vision correct, but the devil is in the execution of major transformation. More than half the companies who undertake this mission fail to achieve the desired business result. Companies often underestimate the kinds of operating model refinements needed to actualize the plan across all their staff, technologies, data management and risk management components. Executives have to stop being complacent based on current revenue streams. The transformation must be continuous process–not a fast and final fix. It must start before it becomes an emergency surgery. Customers need solutions that integrate products and services. Business transformation must align the company with its customer’s projected needs.
The Transformation Charter:
The core team should draft a transformation charter around which the actual transformation process can be anchored. The charter will push your company past the common malaise that delays many such projects, especially when they are about the future. The typical transformation charter includes 10 important elements. It is critical that the transformation team has to buy into them in order for change to happen.
- Name of the initiative. Giving the initiative a name for internal purposes and for wider broadcast inside and outside the company, to gain greater by-in.
- Purpose or aim of the transformation. Specify the case for change and the “burning platform” you are contending with.
- Transformation strategy and approach. Specify the projected participation of each staff member taking part in the transformation. (What responsibilities, what activities?) Activities and responsibilities listed should add-up to solutions.
- Scope. what is in and what is out? It’s important that the team agree on what changes fall within the scope of the transformation, and what does not.
- Roles and accountability. Specify the certain roles n the transformation and name the people who are to fill them.
- High-level timeline. The transformation should map in time as a project, as a guide to the initiative planners. The timeline should account for budget, member availability, and the like.
- Budget. Needed resources should be set aside for the transformation project. Committed resources should be accounted for.
- Communication strategy. For the transformation to be successful, the plans and progress should be transparent. The rules about communication should be specific.
- Initiative governance. Who will make the decisions and how will the decisions be communicated? Who will run the meetings and how should they be run?
- Risk management adjustments. Transformation carries its own kind of risk. There must be a plan for a method of coping with potential risks and a survival plan adjusted around the transformation.
Transformation is an evolution and it doesn’t happen overnight. It takes careful planning, continuous review and iteration of those plans, transparency and visibility throughout the organization and a certain amount of calculated risk. By having the right tools and processes in place to help you navigate you can reach that future faster.