As your company strives to improve financial and operational performance, or seek new opportunities for growth, there will be shifts in what you must do to stay competitive. Companies no longer compete on quality or pricing alone, but through a myriad of factors.
Consider just a small sample of the reasons we’ve seen businesses transform in the last 5 years: Covid-19, industry consolidation, changing consumer preferences, regulatory changes, and rapid technological advancements. Boardrooms and executives must evaluate business strategy and reinvent their businesses to stay relevant.
Business transformation is an enterprise-wide strategic initiative that has a significant impact on the people and processes within an organization.
Examples of business transformation include:
- Reducing operating costs
- Leveraging new technology and digital automation to simplify tasks
- Mergers or acquisitions
- New products or services
- A new organizational structure to drive efficiency
- A shift to sustainable resource consumption
Multiple studies site that between 70% and 80% of change programs fail to achieve their goals in large part due to employee resistance. This is precisely why company leadership must adopt a strong approach to business transformation. Ill-conceived strategy and poor execution can cause fear and mistrust, and lead to poor performance, loss of credibility, and damaged reputations.
At Engage, we believe there are four essential elements for successful business transformation.
- The Who – Change Management
- The What – Implementation Through Human-Centered Design (Design Thinking)
- The Why – The Business Case
- The How – Project Governance
Let’s Define The Elements of Successful Transformation
Change management is directed at the “Who;” the stakeholders that will be most impacted by the transformation. The success of your initiative depends on how individuals in the organization embrace and adopt these changes. The data is abundantly clear. The better we apply change management principles, the more likely we are to succeed.
Successful change management strategies balance a technical approach with an engagement strategy that ensures alignment and ownership of the change process — engaging stakeholders at the point of execution to drive adoption and sustainable business processes.
Passive support from leadership is a recipe for failure. Instead, they must consistently take ownership in their massaging when communicating with stakeholders. Those efforts will have a dramatic impact on the success of a business transformation.
Change Management cannot be an afterthought: You must have a concrete and a deliberate plan for execution.
Implementation through human-centered design, or design thinking, is a methodology used to solve complex problems by designing solutions based on the needs of people impacted. This is the “What”. What policies, processes, procedures, and structures are being transformed?
Design thinking puts the end-user at the center of the implementation process. The process starts with the people you are designing for, and ends with a new solution designed specifically to suit their needs. This “people first” approach provides the best opportunity for adoption and long-term success.
Design thinking draws upon defining the problem, generating a broad range of ideas, and prototyping to explore what solutions might be possible. Companies too often rely on top-down approaches to process design. Putting the stakeholders who will ultimately be responsible for the project’s success in the design and implementation phase increases adoption exponentially.
Next we consider the business case or the “Why”. Why is the organization embarking on a business transformation journey? The business case should include the following:
- The goal(s) of the transformation
- The benefits of the transformation (financial, operational, reputational, etc.)
- The strategy for achieving the goal
- The risks of not transforming
If a company is unable to show stakeholders why the business transformation is essential, failure is inevitable. Transparency with the business case goes a long way in building trust with company leadership and acceptance.
Be clear on the transformation goals, the benefits the company hopes to gain, and articulate the strategy for success before embarking on the transformation journey. Just as important, is laying out the risks of not transforming. These factors are often more compelling than the benefits.
Project governance is the system of processes and guidelines used to administer the deliverables of a project or initiative. Project governance is the “How”. How will the project will be measured, managed, and communicated to all stakeholders?
Project governance protects organizations from risk and provides accountability, strategic focus, and sound decision-making. Proper project governance ensures the monitoring of the scope, schedule, cost, and risks associated with the project.
Many companies form project management offices (PMO’s) that provide a company with an organization and decision-making framework to ensure accountability for deliverables and alignment between executive leadership, project team members, and supporting stakeholders. How the project team will work with different stakeholders will determine how successful the project will be.
It’s crucial to understand the ‘rules of the road’ for managing a project within the organization. This includes both the written rules as well as the unwritten rules. The project governance framework should encompass organizational structure, skills and talent, and key project information.
It Seems Like A Daunting Task
Business transformation initiatives are no longer one and done. A company may find that transformations on multiple fronts are required. Many business transformations can take years to execute. Organizational fatigue, delays, and staff turnover often plague business transformations.
However, we believe that embracing the four essential elements for a successful transformation will provide the edge your company needs to be successful. Contact us to learn more about business transformation and what it can do for your company’s future.