Just what is Business Transformation?

The common description is that in management Business Transformation involves making fundamental changes in how business is conducted in order to help cope with shifts in market environment. However that seems to me to be far too simplistic.

Transformation implies doing things very differently than before. However the reasons why that is necessary or desirable can vary enormously. These reasons may have their origins in the market environment but equally they could result from other sources. For instance relocating a business can be transformational but might not be the result of the market environment. So I prefer a wider interpretation as follows:

Business Transformation is the execution of a change or series of changes that deliver major shifts in operational processes, product offerings or other outcomes that are not merely an incremental improvement on what went before. It can impact all or only some areas of the business but the outcome will be visible across the whole and achieve breakthrough performance.

Why Isn’t It Just A Response To The Market Environment?

If it was only that then a decision to launch a significantly different new product or service would count as transformation whereas a complete process redesign aiming at efficiencies or quality might not. However they are both major changes for an organisation to undertake. More to the point they both require the transformation management toolkit to deliver great results.

So be cautious of those ‘experts’ who are using a definition based on market environment or indeed basing the transformation in Corporate Strategy. They are ignoring the possibility that there are other drivers at the root, making change both desirable and necessary.

Isn’t It Just Business Process Re-Engineering By Another Name?

Well no, actually. Although a big BPR initiative would have many of the same characteristics.
Process re-engineering is generally aimed at efficiency savings or effectiveness gain. It is rarely aimed at doing something completely different or in a different location. Think of BPR like working out your best route from home to work avoiding the traffic jams or the school-run chaos. On the other hand setting off to a completely different location isn’t the same thing. However both will require a degree of planning and insight and potentially a lot more besides.

Nor is transformation purely about delivering measurable improvements in efficiency, effectiveness and stakeholder satisfaction. Instead it is generally a response to two things.

First, there are underlying problems or causes of organisational pain that need to be addressed. They have to be properly understood but nevertheless they are a key component.

Second, there is a desire by the top management and other senior stakeholders to use the opportunity of addressing these causes in ways that fundamentally alter the paradigm of the organisation. In other words there is a want to make things very different from how they have been up until now and to make the future operational and market environment much better for all the stakeholders. This is sometimes described as disruptive change because it casts aside old for new.

On that basis some might argue that switching a vehicle fleet from fossil fuels to electric power would qualify as disruptive – except that it really isn’t. It would simply be a refinement of the logistics process to alter the raw materials in use (electric charging rather than fossil fuel). It would still be a fleet of vehicles being used more or less for what they did before.

By comparison enabling a service engineer to do remote diagnostics on customer plant or machinery would have a big impact on the number of vehicle trips required and some of the reasons for those. That is far more disruptive and envisages a transformation in the way things are done.

How Does It Apply To My Organisation?

That will require a degree of analysis. However you should start by comparing the examples above with the sorts of things that your organisation does. Where are the parallels?

Once you have got a clearer idea then perhaps it is time to start asking the fundamental questions. Is there pain resulting from underlying problems and do you and your senior team want to use this as an opportunity to change the paradigm? Business transformation can lead to developing new competencies and making better use of existing ones.

Who Should Lead It?

Any proposed transformation within an organisation requires top-level leadership. It cannot hope to succeed without that degree and level of commitment. On the other hand the operational management of the transformation programme requires a robust and practical manager who has the full confidence of those above in the organisation.

Ideally the individual will have obvious strong support from the executive. If that isn’t clear to all involved then there is a high risk that they will not be taken seriously. This in turn will jeopardise the entire transformation effort.

Let’s Talk

We bring a wealth of cross-sector experience to bear for our clients and in so doing, help them to design and carry out highly effective transformations. More to the point we do that in ways that are both cost-effective and lasting. Contact us to get the conversation started.

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The author Rob Wherrett can be contacted at https://robwherrett.com/contact/

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