For businesses to stay relevant these days, transformation is no longer optional. It’s an imperative. The problem is that, because the pace of change is so fast, a traditional delivery strategy doesn’t work anymore.
You only need to read the news for evidence of the dramatic shifts taking place in global economics and politics. Meanwhile, connected technologies are transforming the way people live, leaving no aspect of life untouched. Customers’ expectations are unrecognisable from even 12 months ago. And as businesses bring new ideas to market in response, the competitive landscape in every sector is undergoing dramatic disruption.
What’s driving your change?
Traditional transformation tends to rely on a series of interdependent projects that produce benefits only at the end of delivery cycles. These are typically three to five years long. So by the time the benefits are delivered, the world has moved on. Because traditional transformation fails to make a difference fast, it can represent a poor return on investment. And traditional ‘waterfall’ approaches can fail because they don’t get the right people involved at the right time. A central government department asked us to help them change their information management capability having tried and failed to do it themselves three times for that reason.
Instead of applying the same old approach uniformly to every transformation, we believe organisations should manage each transformation according to what’s driving the change. So, a transformation to ensure compliance with new regulation needs to be managed differently to a transformation aiming to increase customer satisfaction or cut operational costs. And our experience of managing change for organisations large and small in a wide range of sectors has shown us there are some basic elements involved every time. But the extent to which you prioritise those elements depends on the ultimate aim.
The primary colours
We see five key elements you can blend to build the right delivery strategy for your situation and achieve faster, more effective transformation.
Be clear about why you’re transforming and gather evidence to make the case for change. Describe your future as a vivid, detailed picture that inspires people at every level. You’ll need to check your ambition can withstand future shocks and unforeseen disruption – that means scenario planning.
These kinds of transformation require a series of transformative states. It’s important to take the biggest step first: your first transformative state should be a basic solution that works and that you can refine with each subsequent state.
As transformations progress, there will inevitably be new challenges and opportunities. That means regularly checking your approach and not being afraid to adjust course rapidly to keep up with change around you.
In our experience, it’s not enough to have one person spearheading this kind of transformation. Bringing together leaders from all levels of an organisation is much more effective. It’s good to create a network with the breadth of skills and attributes to lead change and inspire people.
It’s never good to declare victory too soon – it’s best to check new activities continue even after they’ve been marked as ‘delivered’. And successful organisations learn from experience, becoming ‘transformation-ready’, with leaders and people who know how to respond whenever disruption demands change again.
TRANSFORMATION. A new approach to business transformation
It’s all in the mix
Those five principles of transformation are like a palette. Every transformation will require a blend of the various elements. But what’s crucial is the degree to which you emphasise the different principles. That will depend on what you want to achieve and why.
In the current climate, we see four broad themes that might be driving a transformation programme and here’s our view on how those influence the mix. You might want to:
Say you need to deal with legislation that will fundamentally shift your core business within a fixed-time period: defining your future and embedding the transformation will be the dominant elements of your transformation approach. Most organisations are facing this with the EU General Data Protection Regulation coming into force in 2018 – and many in financial services need to be ready for the new rules on transparency under MiFID II.
If you’ve spotted an opportunity to increase customer satisfaction and reduce some critical operational costs, you’ll be looking to maximise benefits in both these areas.
In this scenario, defining your future will be the most important component of your approach. This starts with understanding your customers. Hyper-connectivity and proliferating choice have given customers more power than ever before. And, as customers, we all have high expectations.
The increasing pace of change means organisations have to act fast to keep up – or ahead. But most have a set of operating systems that have been added to over the years and need to be fundamentally simplified to become agile enough. How do you do that and sustain business as usual? For example, you might need to change the way you manage data without interrupting your core operating systems. Or there might be risk inherent in the change you’re wanting to make – introducing an innovative product with safety challenges, like a new drug, for example. In these situations creating the new reality (through a series of transformative states) and empowering leaders will be key.
If you need to bring in new capability quickly in response to a dramatic shift in your market, creating the new reality and empowering leaders will require particular focus. And it means staying responsive as the transformation evolves. This is just what traditional banks have faced with the raft of challenger banks entering the market and offering attractive new digital services for customers.
A traditional approach to transformation, applied uniformly, is too blunt a response to the challenges thrown up by fast-paced change. Blending key transformation principles, in different measure according to the challenge at hand, is far more effective. With a customised and more nuanced delivery strategy, your organisation is better placed to achieve the dramatic transformation a disrupted world demands.