Complexity of Business Transformation

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How do you deal with the complexity of Business Transformation?

Business Transformation encompasses a variety of situations: mergers and acquisitions; digital transformation; re-structuring and re-organization; performance optimization… and more.

In all these cases, the impact of the transformation crosses departmental boundaries: this transversality is a key factor contributing to the complexity of Business Transformation.

Impact on mutiple departments induce complexity of Business Transformation
  • Acquisition and merger of an external company is not just the business of the legal and finance departments of the buyer. The integration of the purchased company will most likely impact Information Systems, HR processes, marketing and sales, possibly R&D or manufacturing. It will certainly affect all employees and the culture of the company.
  • Digital transformation is likely to drive changes across the board: IT, marketing, sales, HR, customer support. It might even impact the business model, as well as products and services depending on the nature of the business. It often has implications on the job content for many employees.
  • Restructuring to adapt to market constraints might involve off shoring, near-shoring, insourcing, or outsourcing of multiple departments in the corporation, as well as merging departments, suppressing others, or creating new ones.
  • Financial performance improvement could involve cost reduction initiatives across the board, changes in business development and sales, addressing new markets…
  • Operational performance optimization will most likely impact administrative processes, sales operations, supply chain, manufacturing…

Whatever the size of the enterprise, these transformations will bear a definite amount of complexity, due to their being multi-disciplinary.

A few simple principles must be kept in mind in order to ensure that the transformation delivers the expected benefits and does not draw huge and ineffective amounts of resources and energy from the workforce.

Break down complexity of Business Transformation
Or “When eating an elephant, take one bite at a time”.

Can you define a few dedicated initiatives or projects that are necessary components of the Business Transformation of your company, each of them with specific objectives and deliverables? For instance, you might break down a digital transformation into a web marketing project, a set of IT initiatives, a sales training project, a customer support modernization project, a marketing job re-engineering project…

Prioritize
Or “Don’t eat more than you can chew”.

Can you develop a benefit roadmap (which benefits are expected, when, what are the dependencies) and prioritize projects/components of the transformation accordingly? Not everything needs to happen at the same time.

Structure and govern
Or “You reap what you sow”.

Be sure to clarify expectations from the overall transformation, as well as from each constituent: objectives, deliverables, and benefits. Assign a Business Transformation Program Manager. Empower her to assign owners for each constituent project (Project Managers).The Business Transformation Program Manager will establish a governance process that will help make key decisions and manage risks.

Acquire the right skills
Or “No man is an island”.

If the skills you need to lead the Business Transformation or its constituents are tied up or not available, think about solutions to acquire them from outside, even temporarily (consulting, interim management) and make sure you use this as an opportunity for your teams to develop the new skills.

Persist
Or “When the going gets tough, the tough gets going”

Chances are that there will be issues and rocks to turn along the Business Transformation journey. As usual in business, you will not get discouraged by these difficulties, especially if you have established the right structure and governance to manage them.

Communicate
Or “One half of the world does not know how the other half lives”

The transformation will impact employees, customers, partners, investors… From day one, you need to ensure that expectations are aligned, progress is communicated broadly, successes (even partial or small) are celebrated, difficulties are shared…

Now what?
All this being in place, how do you ensure that the transformation process is agile enough to accommodate unavoidable and unexpected events along the way?

Stay tuned, we will cover this topic in a future post.

Lasting benefits of business transformation: how?

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How to ensure lasting benefits of business transformation?

In a previous post, we have discussed the reasons that will lead executive management of your enterprise or business unit to initiate a business transformation. Note: We are not talking about a change that affects only one department but a deeper set of changes that impact all (or a large subset) of the corporation.

However, although there might be a compelling case to change at the onset of the business transformation, a few cautious steps should be taken before embarking on the transformation per say.

Simply put, “Think before you act” and “Connect the dots” could be the very short summary for this phase, to avoid getting into costly evolutions of revolutions of your organization or business model that will not deliver the expected outcomes.
Strong alignment between the corporation’s strategy and the envisioned business transformation program is a must. Therefore, here are a few healthy questions you should ask yourself before jumping into action:

• Which business problem(s) will the transformation program resolve? Will the corporation penetrate an untapped market, catch-up and stop losing share in an existing market? Fix financial performance issues? Stop operational performance downfall? Address customer service repetitive complaints?

• What are the transformation’s expected outcomes? Additional product distribution channels? More profitable business model? New products or services? More agile enterprise organization? More powerful capabilities (IT systems, processes, human resources, skills) in marketing, sales, supply chain, HR, finance …? More efficient operating model, including off-shoring, near-shoring, outsourcing, insourcing? More attractive customer experience design? Opening of subsidiaries or stores abroad? Expansion of production capabilities?

Which business benefits will the transformation provide to the corporation? Will there be access to new markets? Revenue increase? Cost savings? Higher margins? Customer experience enhancements? Employee engagement improvements? Positive brand impact?

• Are benefits expected from the transformation aligned with your corporation or business unit’s strategic business objectives? Do the benefits resulting from the transformation contribute to the business objectives included in the corporation’s strategic plan? Is the transformation accelerating the execution of the strategy?

Once these key topics have been clarified, your organization and management team might be ready for the next discussion: How do you deal efficiently and effectively with the complexity of business transformation?

See our next posts for possible answers.

Why would you transform your business?

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Why would you transform your business?

To transform (from the American Heritage Dictionary of the English language):
1. To change markedly the appearance or form of.
2. To change the nature, function, or condition of.

Whether your business is small, medium or large, in any economic sector, the world around you is constantly changing. New technologies appear or evolve at an amazing pace, e.g. but not only in the digital space.

New markets emerge as technology creates new needs. Older markets shrink. Competition is growing. Environmental or societal concerns around the world create new constraints and regulations.

There is an abundance of examples that illustrate this, from photography, to chauffeur-driven cars, or vacation renting. Digital photography killed film photography. Digital camera manufacturers are now threatened by smartphone manufacturers. The chauffeur-driven car market has millions of new entrants, thanks to the Uber applications. Traditional vacation rental agencies see their customers going away to Airbnb, etc.

To ensure the survival of a company or business unit and enable its profitable growth, executive management of the corporation cannot stand still and hope for the best as the world keeps swirling around. There are a few painful examples of business spiraling down, as did Eastman Kodak’s, a result of their slowness at embracing digital photography (although they had invented some of its core technology!).

Therefore, one key reason why you might want to transform how you do business is to anticipate potential business threats and/or maximize new business opportunities.

In fact, some will argue that transformation and change should become a constant of business life: building a business-agile enterprise, which can adapt to environmental changes “on the go” is still a somewhat ideal concept that few have reached.
For a business transformation to succeed, it must have a strong and obvious business driver, and be supported visibly and unilaterally by the corporation’s executive management.

Some of the strategic decisions that will unavoidably lead important business transformations include: to acquire a competitor, to develop partnerships, to implement a multi-channel distribution model, to sell part of the business, to develop new offerings, to improve drastically operational and financial performance, or to “go digital”: in all these cases, you have already embarked on a path of transformation that will and should markedly change the appearance, form, or function of your organization. In most cases, the business transformation will impact multiple functions of your enterprise.

Your next question should then be: How to ensure lasting benefits of business transformation?

If no such change is in sight, you might want to run a quick scan of your company and its environment and think twice about observing the status quo.
Your next question should then be: What will threaten my business if I don’t change anything?

See our next posts for possible answers.

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