In the last decade before the COVID-19 pandemic, businesses were preoccupied with understanding, harnessing, integrating, and enjoying the benefits of the Fourth Industrial Revolution. Many progressive companies joined the conversation and launched their respective versions of their transformation agenda. Today, a quick look back shows how Business Transformation appears to have been reduced to a buzzword, an empty promise of most corporations trying to reinvent themselves. Articles and anecdotes suggest that during this period, most transformation efforts may have failed for a host of reasons — but while some were external and uncontrollable, most were internal and in fact, preventable. Often, it comes down to the lack of stakeholder support for the scope, prioritization, and scale the business needs to change.
As we continue to make sense of the additional brick wall created by COVID-19, and without an end in sight, we need to ride the wave as we reimagine the post-pandemic world. Certainly, the landscape and market have changed, and technology has even more use cases than ever before. This poses the question: Is your company post-COVID-19-ready?
TRANSFORMATION STARTS WITH RISK RECOGNITION AND ACCEPTANCE
Transformation starts when an organization reflects, collectively understands the risks and accepts that their ambitions and goals could get disrupted, or worse, that they could become irrelevant and quickly obliterated. Many organizations do not realize this until it is too late. This may sound simple but depending on a company’s culture and values, it could be very complicated — and sometimes even a painful process.
While a transformation agenda, with all its imperatives and financial goals, is usually defined by management and well-supported by the board, the participation, engagement, and cooperation of everyone in the organization is an absolute must for it to succeed. A compelling story of change that resonates with everyone and inspires every member of the organization must be clearly communicated on a sustained basis.
In each of the following steps to transformation, executives must consider these questions to determine their own transformation initiatives.
After a thorough assessment of headwinds and tailwinds, companies must ask themselves where they see the business, and where they want to play. Are there new or emerging markets they had not recognized before?
Whether the direction is to complement an existing business or change the business model, the common goal is to stay relevant and profitable, now and in the future. Executives need to set the direction for their future vision for the organization and identify what needs to be done to get there.
BASELINE AND KPI SETTING
Do the customers love the product or service offered by a company? Do they love the brand? Does the company meet all Service Level Agreements with their customers and partners? Does the company have a healthy profit and loss (P&L) with a stable source of revenue and an efficient cost management strategy? Does the company have the right people on board?
Before anything can begin, companies must know exactly how things are, both internally and externally. This is the stage where all the pain points and improvement opportunities are identified. Once a future state has been defined, a roadmap is developed. Processes and systems are assessed, employee and customer inputs are heard, and clear next steps are drawn. The communication of updates, action plans, and time-based milestones are important to all stakeholders, from the Board and management team to the employees.
BUILD OR OPTIMIZE?
Whether the decision is to build or optimize, robust business systems are needed to carry the business forward into the future. This lies at the very heart of any transformation initiative. Customer data, supply chain and logistics, manufacturing and accounting are only some of the important business systems that must be put in place and integrated. While the customer is king, nowadays data is queen. Data now, more than ever, holds an important piece in predicting outcomes in this ever-changing world.
The resource that must go into transforming a business or its systems is almost always a sore point, as it often hinges on the leaders’ investment principles and priorities. As the strongest and most credible sponsor of a transformation agenda, the CEO must push for any big-ticket expense attached to it.
A dedicated, highly skilled and experienced transformation team must also be deployed. To effect change, this team needs organizational and business acumen, the passion to understand the business, its operations, and its customers from top to bottom. Information and data must be made freely available to them.
Regular cadence meetings must be scheduled to report on progress and resolve challenges to allow the opportunity to pivot and re-calibrate plans if needed. Prioritizing transformation-related issues and making timely decisions must be paramount, and stalemate positions must be immediately resolved to meet commitments on time and on budget.
Transformation will disrupt current operations. An experienced transformation agent is needed to architect and deliver a sound change management program to seamlessly steer the business from its current to its future state. This plan must also have the buy-in of top management, be equipped with the right resources, and get communicated as a non-negotiable priority to the entire organization.
There are cases where a business seems to be on business-as-usual mode, and nothing seems to be going wrong. Should it then consider undergoing transformation? There are studies that prove that a parallel transformation — where the core business is free to operate as usual, as a parallel effort reengineers its version 2.0 — has seen some successes.
Ultimately, transformation, with all the disruption, changes and opportunities created by digital technology, and more recently, the pandemic, is a precondition for any company that wants to stay relevant. Technology will only continue to develop at breakneck speed and force those who understand the risk of being disrupted to innovate at scale. Companies need to continuously innovate, pivot, and always be open to change — while executives must always be aware of the question, what will put me out of business tomorrow?
This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.
Randall C. Antonio is an Advisory Principal of SGV & Co.