Key Steps to Successfully Transform Your Business
- Kerrie Smit
- Apr 29
- 5 min read
Business transformation is an essential process for organisations looking to respond to the pace of digital change in automation or AI, adapt to changing markets or improve overall efficiency. Although each change is unique, affecting specific stakeholders differently, there are critical key steps an organisation can take to maximise the success of any proposed transformation. In this post we combine actionable recommendations with some real-world examples.
Understanding Business Transformation
Business transformation encompasses changes in strategy, operations, technology, and culture within an organisation. When a business chooses to undertake transformation, it is usually in response to external factors like evolving market demands, competitive pressures, or emerging technologies. The aim is usually to create a more agile, efficient, and customer-focussed organisation thereby shoring up the organisation's competitive position.
For example, think about how companies like Netflix and Blockbuster handled the rise of streaming services. Netflix adapted its business model to focus on digital delivery, which led to its dominance in the entertainment industry. On the other hand, Blockbuster struggled to transform and eventually went out of business. This highlights the importance of recognising the need for change and acting decisively.
Tailoring Your Strategy for Business Transformation
The first step in any successful business transformation is defining a clear strategy. This strategy should align with your organisation's vision, mission, and values. It should create a clear picture of where the organisations hopes to land after concluding the transformation efforts, and what broad actions will be taken to get there.
Consider asking the following questions:
What are the primary goals of the transformation?
Who are the key stakeholders?
How will success be measured?
For a case study in strategic alignment, consider the transformation journey of General Electric (GE). GE moved away from its legacy business model in diverse businesses like heavy industry - power generation and rail, financial services - GE Capital, and consumer products including appliances and lighting.
It strategically shifted its focus and invested heavily in the Industrial Internet of Things (IIoT), moving into developing and offering software platforms, data analytics, artificial intelligence, and machine learning solutions tailored for industry. It equipped its traditional industrial products (like jet engines, turbines, and healthcare equipment) with sensors and connectivity to gather data, enabling predictive maintenance, efficiency improvements, and new service-based revenue streams. GE moved beyond simply selling hardware to offering comprehensive services and solutions that leveraged its existing market position. It emphasised connectivity, deriving data and digital insights to improve the performance and lifecycle management of industrial assets.
No doubt GE's change strategy was complex, but essentially it drew alignment between its current state and the ambitious future. Flexibility in strategy is important as markets are dynamic.
Different Types of Transformation
Understanding there are different types of transformation is crucial for successful implementation. Generally, these can be categorised into four main types:
Strategic Transformation: Involves changes to the company's business model or overall direction. This type often focuses on entering new markets or introducing new products.
Operational Transformation: Targets improvements in efficiency and effectiveness within the operations of the business. This often includes overhauls of processes, systems, or workforce restructuring.
Cultural Transformation: Emphasises changing the underlying behaviours and mindsets of employees. This transformation is vital for ensuring that the other types are successful, as people are the heart of any organisation.
Digital Transformation: Incorporates the adoption of new technologies to fundamentally alter how businesses operate and deliver value to customers. As technology continues to evolve, this type has become increasingly important.
Successfully recognising which type of transformation your business needs can clarify the direction and resources required for execution.
Engaging Your Team
Once you have a strategy and the type of transformation in mind, engaging your team is critical. Involving employees in the transformation process fosters commitment and reduces resistance. Here are some tips for effective engagement:
Transparent Communication: Regular updates about the transformation journey build trust and keep everyone informed.
Feedback Mechanisms: Implement platforms for employees to share their thoughts and suggestions. This can lead to innovative ideas that contribute to the transformation's success.
Training Programs: Invest in training programs to help employees upskill and feel equipped to meet the emerging challenges brought about by transformation.
Adobe implemented a continuous feedback system, known as "Check-In," in 2012 that allowed employees to proactively communicate their concerns and ideas. This shifted away from traditional annual performance reviews which were time-consuming, negatively impacted employee engagement, and didn't align with the company's need for agility. By introducing "Check-In," Adobe aimed for more frequent and informal conversations between managers and employees about goals, feedback, and development. As a result, morale improved, and the company's transformation efforts were more widely accepted. Adobe experienced reduced employee turnover and enhanced productivity.
Measuring Success and Adapting
Monitoring progress is essential during change. This typically involves establishing Key Performance Indicators (KPIs) that align with strategic goals while providing insight into the acceptance or success of transformation initiatives. Some common KPIs include:
Customer satisfaction ratings
Employee engagement scores
Operational efficiency metrics
Financial performance indicators
It's important not only to measure these KPIs regularly but also to adapt your strategy based on the feedback received through these metrics. A willingness to pivot is what sets successful transformations apart from those that fail.
Case in Point: The Transformation of Starbucks
Starbucks' transformation is a great example of measuring success through metrics. The company has shifted its focus toward creating a consistent customer experience across all locations. This includes investing in digital technology that allows customers to place orders via a mobile app and improved employee training. By tracking customer satisfaction metrics closely, Starbucks adjusted its offerings based on real-time feedback, ultimately leading to increased customer loyalty and higher revenues.
Maintaining Momentum Post-Transformation
Post-transformation, the work is not yet done. Maintaining momentum is vital for ensuring that the changes stick. Here are key practices to consider:
Continuous Improvement: Treat transformation as an ongoing process. Regularly seek areas for improvement and act on them.
Celebrate Successes: Recognise and celebrate milestones achieved during the transformation. This boosts morale and reinforces positive behaviours.
Leadership Commitment: Ensure that leadership remains committed to the transformation vision. When leaders model the behaviours expected from their employees, it reinforces the transformation's importance.
In recent years, National Australia Bank (NAB) has been undergoing a significant digital transformation, focusing on cloud-based banking, automation, and AI-driven customer service. This involves substantial changes to technology, processes, and potentially roles within the organisation.
For such a large-scale transformation to be successful and accepted by employees, consistent and transparent internal communication would be crucial. This would likely involve explaining the rationale for the changes, the benefits for customers and the bank, and how employees are being supported through the transition.
Highlighting early successes, such as the launch of new digital features or improved customer satisfaction metrics resulting from the transformation, would likely be part of this strategy to build momentum and employee buy-in.
Final Thoughts
Like any change effort, transforming a business can seem daunting, even though it is an essential step for long-term survival and success. Breaking down this important change into key steps—defining a strategy, understanding the types of transformation, engaging your team, measuring success, and maintaining momentum—can set your organisation on a path to achieving the right outcomes, including significant growth and innovation.
Change is an ongoing process, not a destination. For more information on effective strategies for business transformation, explore business transformation or book in a free initial consultation.
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