Some say the word is hackneyed, worn-out and in need of caffeination. Indeed, "transformation" has been applied to everything from reality shows to robots…to unremarkable corporate change disguised as innovation for the sake of stakeholders. We’re as cynical as the next person but we still defend the concept of business transformation – real business transformation with a double shot of espresso – as a critical core competency that every business needs to master in order to succeed.
Simply defined, business transformation is a change opportunity that improves performance. Performance improvement is powered by the fusion of three disciplines:
(1) Strategic insight – a view toward the future
(2) Business knowledge – a deep understanding of a particular industry and/or problem
(3) Technology leadership – the ability to identify and implement the right solutions
Business strategy drives process change, process change drives technology, and new technology creates strategic opportunity.
Every organization, no matter what its core business and no matter how big, needs to master all three of these disciplines in today’s marketplace in order to capture an opportunity. Getting two out of three right is not an option – case studies in Harvard Business Review as well as empty storefronts on Main Street USA both offer proof of this. All businesses must have a clear line of sight to see the opportunities ahead and leverage these three disciplines before their competitors do. That’s why real transformation is all about results.
Transformation is not always about scale but often does involve large scale, enterprise-wide change. For large companies, enterprise-wide business change that touches all or the majority of internal and external customers and users; reaches across organizational divisions and boundaries; and spans disparate processes, policies and geographies doesn’t come in a box. It requires that processes change and that people change, which is usually where we stumble. Behavioral science has shown us that resistance to change and aversion to risk are both hard-wired human traits. While transformation of this magnitude often promises significant business impact, it can be extremely risky and challenging to achieve.
That’s why it’s useful to segment business transformation into smaller phases. Such frameworks, built on principles of common sense and optimal sequencing, can serve as valuable guideposts on the path of a major transformation. Typically, these phases include:
DEFINE: Identifying the right problem or opportunity and defining the problem so that it can be successfully solved
BUILD/DEVELOP: Sequencing management actions so the greatest returns are captured in the shortest timeframe maximizing ROI
OPERATIONAL MANAGEMENT: Producing outcomes that effectively address the problem or opportunity, on time and on budget
MEASURE: Evaluating results against quantitative business objectives