It isn’t necessarily strategy but the reasons for undertaking business transformation are rooted in a wide variety of causes such as changes in the market environment, technology or other things.
Strategy – The Guiding Star?
It’s a solid principle of business that you are guided by your strategy. However that is based on an assumption that the strategy itself has been thoroughly worked out. SWOT analysis, market research, products based on customer need, segmentation, niche vs broad, and so on. If it has been well thought through then some of the problems, which the products or services on offer seek to solve, belong not to the organisation but to their customer base.
So, arguably, the strategy addresses a variety of problems and points the way forward. However when it comes to transforming the organisation what has changed? Where are the prompts coming from?
If it is a result of market environment, then revisiting those components of the overall strategy would seem a perfectly reasonable starting point. But what if the impetus for transformation is in response to something else?
Where The Impetus Comes From
Strangely there doesn’t appear to be a consensus about where this originates, despite the millions of words written on the topic of business transformation over the last decade. On the other hand there are reams of papers on why the attempted transformations fail!
In my view it appears crazy not to have identified the true reasons why they should be attempted in the first place. However it seems to me to be perfectly reasonable to try and list the likely sources of impetus for transformation and see where those fit. So here goes:
- Changes in the market environment
- Regulations that require a major overhaul of products or processes
- New technologies that challenge the status quo – like the introduction of electric vehicles overtaking fossil fuels
- A management desire to develop a completely new market
- Redesign of the organisation to deliver ground-breaking flexibility or competence
- An attempt to future-proof the organisation
- The need to merge disparate parts of the business to create a cohesive whole (this could follow a merger of companies or maybe a consolidation of different physical sites)
- A demerger to allow the different parts to progress more effectively
- A desire to change the culture to something more flexible, creative and dynamic
In every case this is more than just about fixing the existing problem or status quo but rather taking the opportunity to go beyond.
So Now What?
Obviously the first challenge is to actually identify where the impetus is coming from in your organisation as you seek to engage in transformation activity. That means asking some fundamental questions.
“Why?” is the most fundamental question in a transformation according to Albrecht Enders (Professor of Strategy and Innovation and Dean of Programs and Innovation at IMD in Lausanne.)
I agree with Enders’ assessment. Yet repeatedly asking “Why?” isn’t the norm around the boardrooms of businesses that are considering transformation. Instead they rely more on copying the competition or basing their ideas on what they think is a good idea. That overlooks the possibility that there is something else to take into consideration.
Yet according to Enders, “… the two most critical questions for companies are: (1) how do we manage the core business for growth, and (2) how do we create viable future businesses and build the required capabilities to do so?”
Go Back to Basics
Start with a clean sheet and go through those elements of strategic planning that most closely map to the initial view of what needs to be addressed. Keep asking “Why?” and “Who? What? Where? When and How?” until you have this nailed. What should appear is a detailed and concise statement of what needs fixed/changed and what pain that is (potentially) causing.
That is the problem that needs solving. Yes, a transformative approach may be desirable to go beyond just fixing things. Transformation deals with discontinuous change that creates both threats for the business and opens up a host of opportunities. However starting it isn’t just a strategic decision taken against the background of an existing (and likely outdated) strategy that is sitting in the boardroom library.
What Next?
We’ve spent years in understanding how to get to the roots of why transformations are needed and specialise in coaching and mentoring others to do this successfully. We’ve also got an extensive toolkit to share as part of that coaching. So contact us to get the conversation started about how you can learn and get things right.
Rob Wherrett can be contacted at https://robwherrett.com/contact/
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