When several significant drivers are changing at the same time, the business environment becomes extraordinarily complex. Truly transforming an organization is not easy. Statistically, seven in ten initiatives fail. But the ability to transform rapidly is critical to success in today’s business world, and it is an ongoing process. Contributing factors include insufficiently high aspirations, a lack of engagement within the organization, and insufficient investment in building capabilities across the organization to sustain the change, among others. And it is crucial to understand customer insights and megatrends if to succeed with a transformation.
Today, change is a constant. Highly competitive market conditions and disruptive technologies are changing the face of traditional business models and revolutionising employee and consumer expectations. The ability to adapt with change is crucial for businesses wanting to ensure a competitive advantage.
The story is full of top executives who do not understand innovation and believe that because they are leaders today, they will also be leaders tomorrow. Had Nokia’s top management understood the concept of smartphones, they would still have been leaders in mobile technology. Had Kodak’s top management understood customer insights, they would have understood that customers were committed to preserving good memories. Customers did not care that Kodak was a leading photo film company. Customers wanted a digital camera that made it easier for them to take care and share good memories easy. Today, mobile phones have taken over most of the roles of digital cameras for the consumer market.
By listen to customer insights and analyse megatrends the top management can gain insight and understanding of the strategic steps that must be taken to bring the company into the future. Transformation requires a deep understanding of a company’s customers and broader industry trends. Acquiring this understanding can take several forms, from an ethnographic analysis to surveys and interviews. This may be an ongoing process, as organizations use their findings to come up with and test changes and then refine them based on customer feedback. All too often, we see top executives reject customer insights and stick to their old strategy. Times change so do customers, what the customer wanted yesterday is not what tomorrow’s customers want.
To succeed, all members of the transformation team must have a clear understanding of the strategy direction the transformation will take the organization. Clearly articulating the vision of the transformation not only motivates participants but also serves as a long-term test for all actions taken. The strategy process is NOT setting targets and pursuing a series of targets as some top executives believe. The strategy process includes an inspiring vision statement, as well as three to seven concrete goals that will help them achieve it. Encouraging employees who are participating in the transformation process provides further motivation for them and a sense of ownership over and commitment to the transformation. This is key since they are the ones who will evangelize the transformation, both within and outside the company. Another reason to keep a close eye on your young employees: They are often the future leaders of your organization. Achieving a sustainable transformation often also requires change on the individual level. Encourage your employees to undergo a three-step process: defining their aspirations, developing an understanding of themselves, and sharing their transformation with their team. This final step creates accountability as well as a collective understanding that every team member is working for change. The key to beating the odds and achieving a sustainable transformation begins with leadership and a focus on recalibrating an organization’s culture around new goals. Leadership is probably the most important part of this challenge. Leaders take people where they otherwise would not go. The most successful transformation leaders create a compelling case for change. They create rewards and recognitions, reinforcing business processes and policies to ensure the transformation succeeds. Finally, they inspire their colleagues, because every employee makes a choice, every day, about how much discretionary effort to give. That is a reservoir that great leaders tap into. Transformational change is hard.
There are a few things that make a transformation sustainable over time. One is changing the way work is done and develop the right capabilities. That includes both business process capabilities that determine how your organization gets things done as well as capabilities that address your organization’s talent. Allocate both human and technology resources to evaluate the external forces that are poised to reshape your market. Remember, being a bigger ship does not necessarily mean that you will weather the storm better. It does mean that it will take you more effort to change course, while smaller and more agile organizations ride the waves created by the storm as well as the waves created by your ship.