2020 provided many business insights. It also saw many enterprises spiral into disarray. Business owners have wondered what's next, between lockdowns, unemployment, stalled stimulus packages, and countless uncertainties. Financial crises loom in many nations, and it can feel overwhelming to decide which direction to head. What many companies are realizing, however, is that they must prioritize business transformation now more than ever. And this transformation must prove so radical that it reorients companies altogether.
In other words, many executives and corporate leaders have realized they must build entirely new companies. But how does business transformation work? And is this the right time for your company to undertake it?
Keep reading as we explore the process of transforming your business. Below is everything we will cover. Feel free to skip ahead.
- What is business transformation?
- Why is business transformation needed?
- Unlocking breakthrough value
- Business transformation in a fast-paced world
- 8 Keys to unlocking value creation
- Why digital transformation matters
- The psychology of change
- Business transformation and digital transformation
- Dealing with the challenges of the "always on" culture and your business
- Promote agile "test and learn" culture
- Start your business transformation journey with TrueNxus
What is business transformation?
There are many different definitions of "business transformation." This fact proves no surprise since senior executives across industries espouse diverse viewpoints and ways of "doing business."
That said, transformation is, at its essence, an ambition act. One that requires rethinking your operating and business models in the most fundamental of ways.
It necessitates making strategic decisions that impact every aspect of your organization. It starts with a thorough understanding of your company's primary aim during business transformation.
Why is business transformation needed?
Today, many companies realize they need to identify a higher purpose. They know their purpose should extend well beyond their original mission, galvanizing their organization along the way. In other words, these companies have set their sights on being transformative.
What are some of the things that these businesses now realize have proven detrimental to them in the past? For starters, they acknowledge that running a company is about much more than just keeping shareholders satisfied.
They now see their company's primary objective as serving humanity and society. These companies realize that through a commitment to economic opportunity and a healthier environment, they can "be the change they want to see in the world."
What sets these organizations apart? Several factors underscore their innovative and revolutionary approach to business. They include:
- New growth
- Repositioning the core
Let's take a closer look at each of these factors and how they're helping companies reshape their futures by changing the alignment of their visions.
When it comes to new growth, we must ask questions like, "How successful has a company been at bringing to life new products? How about new business models? Or new markets?"
What's one of the best ways to answer these questions? By taking a look at the percentage of revenue outside the core attributable to areas of new growth.
Of course, measuring new growth alone won't provide a complete understanding of where a business has been and where it needs to go. That's where a careful analysis of financials comes in handy.
As you take a look at your organization's finances, ask questions like, "Has the company posted strong stock market and financial performance? Has it overcome losses and reversed slow growth?"
In other words, has the company taken steps to get back on track? As you determine a path for business transformation and move towards it, keep an eye on your company's profitability.
You'll also want to track compound annual growth rate (CAGR) and stock price CAGR during the transformation.
Repositioning the core
Bear in mind the core values of your company. You'll need to contrast them with how well your company has adapted its traditional values to face market changes and upsets. After all, we live in an age of disruption at every level.
That means taking a closer look at your organization's efforts to breathe new life into its business. By keeping these factors in mind, you'll prove well-positioned to identify companies that have made significant progress towards strategic transformation.
Unlocking breakthrough value
The word "transformation" means different things to different people. It's a term that gets bandied around a lot in the business world. But what does it mean, and what are its implications for your company?
Successful companies define transformation as the need to generate new value. How do companies do this? By driving further growth, unlocking new opportunities, and delivering new efficiencies.
While this might sound like a tall order, your company can't ignore the need for transformation. After all, modification allows you to re-envision how your business creates value now and moving forward.
Transformation requires stakeholders to think big, and this isn't a bad thing. After all, incremental improvement doesn't cut it in today's business environment, especially in a commercial universe where disruption occurs daily.
How can your organization best position itself to deal with these everyday disruptors? By encouraging sustained growth through agile reinvention. Business today is like a game of chess. You must think many moves ahead before you can become a grandmaster.
Business transformation in a fast-paced world
When you take the time to work through an effective business transformation, you ensure your organization can survive and thrive as you and your colleagues consider innovation-driven opportunities.
These opportunities will arrive in many forms. They'll include navigating evolving regulatory complexities and dealing with shifting market demands. While many businesses undertake transformation with startling rapidity, you should adopt a more measured approach.
A successful transformation necessitates a level of alignment and integration that many businesses aren't prepared to facilitate.
Many initiatives that once required four or five years to complete now get implemented in one year or less. That means organizations must manage massive stores of information, countless decisions impacting most aspects of strategy and operations, and compressed timeframes.
For these reasons, the threat of failure proves high. Fortunately, companies that can pull these elements of transformation into alignment will meet their objectives moving forward.
What's the best way to achieve breakthrough value despite these risks? By understanding the strategic keys necessary to encourage value creation.
Organizing the elements to get business transformation "right" requires more than a roadmap, especially in potential risks. Instead, it demands an integrated approach that links transformation ambition to business strategy and execution discipline.
When your company does that, you'll hold the keys to unlocking value creation.
8 Keys to unlocking value creation
How do you find a happy medium and create value amid a business transformation? It starts with the following guidelines:
- Articulate your business strategy
- Focus on effective communication
- Drive to value
- Lead with capabilities
- Rethink capabilities
- Remain flexible and agile
- Invest in program talent
- Incorporate sustainability
How can each of these tips ensure your company enjoys a smoother and more effective transformation? Let's take a closer look.
1. Articulate your business strategy
As a leader within your organization, you must have a well-understood, precisely communicated business strategy.
Why is this so important? Because more often than not, an organization's strategic choices are thoroughly understood by senior leadership. But they end up poorly translated into the implementation options that trickle down to employees.
What does this lead to? A loss of value and momentum. You also risk losing employee buy-in.
Remember that your strategy should serve as the foundation for a broad range of organization-wide investment decisions. It should also inform everything from performance expectations to resource allocations.
In other words, it's your job to communicate your company's business transformation steps to employees. That way, it becomes an executable transformation ambition. In other words, the value must come from the change itself.
2. Focus on effective communication
What will companies that invest in articulating their strategy see? The ability of their employees to transform strategic goals into realistic transformation ambitions.
Which companies prove most successful at this? Those that have a deep understanding of how their organizations will capture value through creation and delivery.
Rooted at the core of your business's transformation, ambition should be this knowledge. After all, consensus and strategic clarity prove vital to helping executives optimize their activities and goals in light of their intended outcomes.
Fostering effective communication also proves essential to exploring desired transformation outcomes, from both an operational perspective and a financial one.
This strategy will also help your employees adjust to transformation strategy elements, thereby influencing the better.
3. Drive to value
Besides articulating upfront the value they expect to achieve through transformation, what else should business transformation leaders do? They must monitor, measure, and keep track of value throughout the transformation process.
Think of value as the thread that connects your business transformation and strategy. What are some tips for achieving this?
Always be explicit about precisely why and how you intend to create value. Then, establish measurable, observable connections to your plan of execution.
What links transformation ambition to capability execution and design? A thoughtful value case.
How? By defining and breaking down the transformation program into manageable initiatives. Each of these initiatives should have capabilities mapped to specific target values. A results management office can assist you in realizing all aspects of value delivery by:
- Understanding the value of the program
- Knowing how to manage dependencies and trade-offs to reach the targeted transformation value
What happens when a company fails to define the value expected properly? This lack of communication creates problems later in the game. It can lead to backtracking to address issues that should have been identified and confronted upfront.
For example, an international financial institution might lose value opportunities available through strategic tax planning. Or a manufacturing company might neglect a specialized distribution capability need.
It will prove difficult for these businesses to support a new, multichannel business model. These scenarios don't represent isolated cases. They can make or break the effectiveness of your business transformation.
4. Lead with capabilities
As a business transformation leader, you must also hone the ability to identify the unique enterprise capabilities that will provide your company with a competitive advantage. Remember, this process can feel like you're going down a lonely road.
After all, only a fragment of an organization's total capabilities contributes to steering an organization in new directions. Very few have the talent to recognize and exploit ways to compete and differentiate in the market.
When you focus on these abilities, however, you provide added value. You can also assist your colleagues in honing their competitive advantage. In the process, you'll help the organization realize its ambitions for business transformation.
What's an essential step in this process? Recognizing where to start is critical to unlocking value through business transformation.
Organizations should also develop ways to address immediate market opportunities through prioritization rapidly. This tactic permits them to strengthen the discipline they'll need to evolve continuously. This approach can also encourage them to establish a new trajectory to keep pace with the market's uncertainties.
5. Rethink capabilities
Leading with capabilities also requires moving past standard definitions. We've come a long way since the term "capabilities" referred to "people, processes, and technology."
But not all leaders realize this. It's time for acknowledgment of this fact.
How should you look at capabilities in place of traditional definitions? Think of your company's abilities more entirely and holistically. That means envisioning capabilities as providing focused support for your company's strategic choices.
You must understand that there are many dimensions to this picture, including:
- Mission: What are the strategic objectives of the company? How will we operate to achieve the goals set forth by the company's strategy?
- Insights: Who has the decision rights? What data do we need to drive informed and timely decisions? Do we have the data? How do we get the data?
- Processes: What are the processes we need to achieve our goals?
- Technology: What are the software and tools we need to enable the processes defined?
- Integration: Are our processes and technology integrated cross-functionally? Are we integrated with our partners?
- Talent: Do we have the right talent and skills to achieve our goals?
How does this work in the business world? Imagine you're a beverage company that wants to craft better relationships with retailers and distributors. Your ultimate goal is to ramp up growth.
So, you decide to focus on revitalizing three essential capabilities. What does this involve? For starters, viewing your customer engagement capability as a set of insights, products, and services tailored to retail customers and retailers.
In other words, you'll hone your message and the actions you'd like to drive based on your audience. You'll also revamp the link between innovative decisions and customer pricing. In the process, you'll establish a network for continued long-term brand expansion.
6. Remain flexible and agile
What else should leaders who have taken the helm of a significant commercial transformation to be prepared for? A constant process of evolution and change based on real-time insights and innovations. This necessity requires embedding innovation, agility, and a disruptive mindset into everything you do.
This approach will also help your company secure quick wins. It'll ensure your company enjoys progress in keeping with its desired transformation ambition and outcome.
When coupled with agile solutions, a flexible mindset can provide early bottom-line benefits. It can also support your ability to handle unpredictability and complexity by developing incremental processes. We all need this ability right now!
In today's marketplace, you must design your business for a shifting end-state. That means taking into consideration alternative markets, evolving technologies, and various scenarios.
What's more, you should connect with partners, thought leaders, and peers during the transformation process. This networking approach will ensure that you create a sustainable solution for all involved.
7. Invest in program talent
As an instigator of business transformation, you should also realize that the right talent paired with the right leaders ensures a successful process. As a leader, you need credibility and influence within your organization.
You should be able to make significant shifts, shaping how workflow occurs. If you don't want to take on this role, hire somebody who'll devote themselves to it.
What's another mistake that companies often make when it comes to transformation? They don't free up the "right" top talent to support the process. Remember that your brand's evolution as a business won't come for free.
That said, the return on investment (ROI) often proves to commiserate to the dedication and caliber of the team you hire.
8. Incorporate sustainability
You know that real value emerges over time through sustainable change. That's why you must foster an adaptive organization that embraces new ways of delivering value.
Leaders should provide a foundation to sustain value even after your company's transformation is complete. They should empower and engage other leaders within the business to both reward and model beneficial behaviors.
They should also provide their workforce with the proper equipment to make better, more analytics-based choices in keeping with your business transformation objectives.
Why digital transformation matters
Every organization must also decide how to adapt technological strategies to support operational resiliency, digital response, and business change. We've seen this principle in practice since the pandemic. For example, the role of app delivery teams in facilitating remote work cannot be underestimated.
Not only have these individuals and teams been involved in crafting vital apps and new software, but they've also dealt with a staggering increase in the number of online platforms getting utilized commercially. Software remains an integral part of how companies compete, so don't expect this to change anytime soon.
These observations raise some interesting questions. For example, does every organization need to become a software company? Fortunately, the answer is no.
Nevertheless, one of the next significant organizational challenges will be operating more like a software company. That will mean developing the skills and capabilities to interact as both a user and an employee.
Moving forward, organizations must consider carefully the organizational, technological, and process design changes that should be made. Based on current organizational progressions and evolutions, three core pillars provide a foundation for digital innovation success and readiness. They include:
- Hybrid cloud strategies
- Cloud-native architectures
Taken as a whole, these "digital innovation" pillars symbolize essential attributes of modern application development and delivery platform. Given the amount of digital transformation going on these days, use these resources to set application delivery agendas, and position your business for digital innovation success.
The psychology of change
We all know that 2020 was a year of unprecedented change. While adaptation and evolution are natural processes, you may feel uncertain about undertaking business transformation, especially with so many uncertainties still looming.
How do you adapt? How do you help your organization thrive and grow? And how do you achieve these aims and objectives when everything seems to be changing so rapidly?
Start by asking yourself this question. "Are the plans you had before still relevant under these changing circumstances? Do the strategies and road map you created at the beginning of 2020 still make sense today?"
Considering how drastically COVID-19 has changed our lives, you may need to pivot at least a few degrees from your original mark. After all, life during lockdowns meant a fight for survival for many small businesses. Many executives have yet to move past this mindset.
After COVID-19, you made "survival instinct" alterations to navigate. But now we're back into medium-distance thinking. Do your 2021 plans need to pivot a few degrees more as news unfolds? Or better still be ripped up and drafted from scratch?
Business transformation and digital transformation
Before COVID-19, what were your business transformation aspirations? Did you wish to focus on digital transformation, creating a customer-centric business model, or utilizing analytics, data, and artificial intelligence (AI) more effectively?
If so, you're far from alone. Once 2020 hit, though, you likely weren't able to maintain your company's original plan. The past year has also raised many new questions about diversity, equity, and inclusivity.
It has demonstrated how great employees are both a challenge to find and hugely significant to any business's success. Yet, digital transformation still dominates any conversation about business transformation despite these setbacks. And it's little wonder why.
In a recent report from Harvard Business School, the top net growth businesses in the United States were:
What do these companies have in common? They all describe themselves as technology businesses.
These businesses have remained at the top of the pile for some years now. As a result, they've quickly become the blueprint-worthy for younger companies looking to use technology to enable business transformation.
Digital transformation continues to have a significant influence on customer experience. Research indicates that most businesses have witnessed "stronger adoption'" of digital channels by customers.
Coming into 2020, trends included greater adoption of mobile digital commerce. Mobile eCommerce regularly broke sales records. Of course, 2020 only fueled this fire as nearly 40 percent of the workforce did so remotely throughout the summer.
What does this show us about consumers? Before the pandemic, they were already shifting to digital over all other channels. The virus represented a catalyst for this shift, though not the cause of it. We predict that this is likely to remain the case moving forward.
That means the argument that businesses should digitally enable their customers has never been so compelling. For most companies, digitization has been the key objective within their business transformation framework for some time now. Make 2021 the year you act on this.
Dealing with the challenges of the "always-on" culture and your business
The shift towards remote work and eCommerce has come with the challenge of meeting the demands of "always-on" culture. ECommerce shops no longer have opening and closing hours. The internet does not follow geographical boundaries. So, retailers are now open for business 24/7.
This statement proves no less true for local shops. Many were forced to launch Shopify accounts during the pandemic. Some have come to enjoy resounding success because of this forced transformation.
But this example also includes global giants such as Amazon and Walmart. They had digital-first customer experiences and corporate strategies before the virus hit. Yet, they've expanded these services greatly over the past 12 months.
What's the lesson to be learned from all of this? The new customer battlefield is digital. There's pressure to create a competitive advantage through innovation, e-commerce, and content.
How do you continue to innovate and garner a competitive advantage in the new digital-first marketplace?
Remain open-minded about how your business will evolve in a faster, digital-first marketplace. Look at how you can construct a robust, competitive advantage in light of a new global operation. Stay prepared to embrace changing operating models and ways of doing business.
You should also take a look at your current operating model. Identify ways you can streamline it and ramp up efficiencies. Consider your macro processes, too. Recognize points where you can use artificial intelligence (AI) and digital tools to give your team greater bandwidth.
Provide opportunities to showcase the many and varied skills your team in the process. But also be prepared to break up existing ways of doing things.
Promote agile "test and learn" culture
You'll also need to adopt an agile "test and learn" culture. After all, no one has a crystal ball when it comes to how 2021 will play out. For this reason, cultivate an agile mindset. To do this, you'll need to incorporate testing and learning into the transformation process.
As you go through the trial and error process, bear in mind that failure is part of learning. Don't fret when things don't go as planned.
Instead, develop ways to deal with it and move on. With all of the market uncertainty these days, business owners and leaders must cultivate this mindset.
Besides focusing on how you'll revamp and revitalize your business, you should also consider how you'll collaborate with other enterprises moving forward. These may include companies such as suppliers and shippers.
For example, if you've relied on lots of small suppliers to perform discrete functions, this may no longer be an option for your company. You may need to find new ways to improve the speed with which information and direction flow between these entities. You might also find that reliance on big partners no longer makes sense.
No matter the adjustment needed, be prepared to adopt problem-solving techniques and processes.
In a digital-first world, you must build a stable team of:
- Digital engineers
- Solution architects
- Customer experience experts
These individuals must be capable of delivering superior customer experiences. With their help, carefully assess and improve your company's internal processes where necessary. That way, your company will remain top of mind with customers.
New partners won't contribute to projects, but they will offer always-on experts. Your new partners should be agile in their approach, too.
They'll have the "test and learn" mentality we mentioned earlier. And they'll be able to react to your changing business needs and push you to stay at the forefront of the marketplace.
Are you ready to learn more about implementing business processes improvements? Check out our ultimate guide now.
Start your business transformation journey with TrueNxus
TrueNxus understands business transformation. Our collaboration platform is built to enable your entire organization as a cross-functional team. It has everything that you need to change your business and operating model. TrueNxus is business transformation management software built to help you manage all of your strategic initiatives focused on transformation management.
In any business transformation, you need help with:
- managing multiple projects
- Planning projects (i.e., project charters, project plans)
- Executing projects
- Monitoring and controlling projects (i.e., status reports)
- Visualizing all of your work in one central location
- Collaborating with your colleagues, clients, consultants, contractors, and other third parties
Here's a look at some of TrueNxus's features:
1. Multiple views
With any business transformation, people require different ways to visualize work across time. Not only that, but each individual specializes in a specific domain, and as such, each thinks about work differently. To ensure successful planning and execution, you need software that provides personalized views that make sense to everyone involved in the change. These views need to be in sync as well.
TrueNxus provides you with the following views:
A list is a table that allows you to manage your cross-functional projects easily. You can organize your project work into groups such as workstreams or any logical way to categorize tasks.
With TrueNxus's Timeline, a Gantt-chart like view, you can visualize your project plans across time. It lets you understand how all of the work fits together. You can make updates to the project plans through an interactive interface.
3. Automated project status reports
We understand that each cross-functional team member is busy balancing multiple priorities, from your day-to-day responsibilities to various programs and projects. Therefore, TrueNxus successfully executes monitoring and controlling projects by automatically analyzing the project's health in real-time, giving senior leadership and the team the insights they need to make decisions and move the ball forward.
4. My Work
Another essential thing for everyone involved in a business transformation is understanding what you're on the hook for delivering. With TrueNxus, you can view every task and every dependency vital to you, across every project, in one location, ensuring success.
Additionally, we know that you don't want to let your colleagues down or be let down. You can ensure the successful delivery of programs and projects through collaboration and documenting task dependencies. By doing so, you can be accountable when others are reliant on you. You can understand dependent tasks, change implications, and adjust course as needed.
6. Automated notifications
No matter your role in any business transformation, you can also successfully execute work by leveraging software to notify when changes occur. With TrueNxus's 20+ out-of-the-box automated notifications, you will have the transparency you need to stay in-the-know.
Additionally, the entire cross-functional team can ensure project plans are successful by collaborating directly in the app. With TrueNxus, you can communicate with colleagues, clients, consultants, and contractors in one place.
8. Project charter
Lastly, you can leverage OKR and create a project charter. You can ensure the successful execution of projects by documenting and aligning the project's objectives, benefits, and risks from the very beginning. TrueNxus is the only software that has a project charter directly in the app.
Just as you understand change is needed to survive in today's economic environment, we hope this article has helped you understand business transformation and the keys to unlocking value creation.
Additionally, we at TrueNxus want to be a part of your transformation journey, to make this process easier and smoother for you and your entire organization. Contact our sales team if you have any remaining questions or if you're ready to get started in your business transformation.
Change takes time. It's not just the incorporation of new technologies. It's a cultural change that will entail the constant evolution of a business.
We at TrueNxus want to help your team get started today.