As companies continually strive to improve financial performance, drive innovation, and seek out new opportunities for growth and profitability, there will be inevitable shifts in the way your company must conduct its business to stay competitive.
Competition is fierce and global. Companies no longer compete on quality or pricing alone but through a myriad of factors. Industry consolidation, changing consumer preferences, policy, and regulatory changes, as well as constantly evolving technological advancements, are just a few of the factors driving the need for business transformation. In addition, supply chains have become extremely complex, global, and wrought with risk. Boardrooms and executives are forced to continually evaluate strategy and often reinvent their businesses to stay relevant. The goal being, to transform the way business is conducted to gain a higher level of performance and competitiveness.
Business transformation can be described as an enterprise-wide strategic initiative that has a significant impact on organizations, people, and processes. Specific transformations may 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
Business transformations are complex, often confusing, and extremely disruptive to the day-to-day interactions of people and processes. A recent McKinsey study estimates that 70% of change programs fail to achieve their goals in large part due to employee resistance. This is often because the people placed in the roles of planning and executing the implementation of these initiatives typically do not possess the inherent capabilities necessary, nor the time to fully devote to them.
That is why company leadership must have a strong approach to tackling their business transformation initiatives. For business leaders, ill-conceived strategy and poor execution can cause fear, mistrust, and lead to poor performance, loss of credibility, and a damaged reputation.
At Engage, we believe there are four essential elements for successful business transformation.
- Change Management – The Who
- Project Governance - The How
- The Business Case – The Why
- Implementation Through Human-Centered Design – The What
Change management is a structured approach to support key stakeholders through the change process. It 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.
Change management strategies must balance technical approach with an engagement strategy to ensure alignment, acceleration, and ownership of the change process — engaging stakeholders at the point of execution to drive adoption, performance, and sustainable business processes.
Leadership must be fully committed to the initiative–because passive support is a recipe for failure. Leaders must be front and center and must be consistent in their massaging when communicating with stakeholders. Your communication efforts will have a dramatic impact on the success of your business transformation efforts. Communication cannot be an afterthought: You must have a concrete communications strategy and a deliberate plan for execution.
Project governance is the structured system of processes, rules for decision-making, and the guidelines for the proper application of tools used to administer the deliverables of a project or initiative. Project governance is the “How;” how 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) 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 throughout the project will determine how successful the project will be.
Finally, it is crucial to understand the ‘rules of the road’ for doing 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 information.
The Business Case:
The business case is 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 their stakeholders why the business transformation is essential and how it benefits them, failure is inevitable. Transparency with the business case goes a long way in building trust with company leadership and acceptance of the needed transformation.
Be clear on the project goals, the benefits the company hopes to gain, and articulate the strategy for success before embarking on the transformation journey. Just as important: Laying out the risks of not transforming. These factors are often more compelling than the benefits.
Human-Centered Design (Design Thinking):
Implementation through human-centered design, or design thinking, is a methodology used to solve complex problems by designing solutions based on the needs of their people. This is the “What;” what policies, processes, procedures, and organizational structures are being changed?
Human-centered design 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. We feel this “people first” approach provides the best opportunity for adoption and long-term success.
Design thinking draws upon empathy, defining the problem, generating a broad range of ideas, and prototyping to explore what solutions might be possible. Time and time again, companies 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.
Business transformation initiatives are no longer one and done. A company may find that transformations on multiple fronts are required. Many business transformations take years to execute. Organizational fatigue, delays, and staff turnover often plague business transformations.
At Engage, we believe that embracing our 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.