Transformation in the Exponentially Disrupted Business Environment
Savio boasts of having over 24 years experience in the business & management segment, advises firms on transformation and business strategy across India, Middle East, South East Asia and Australia.The advent of the digital transition brought about seismic shifts in the way business models are perceived and executed. Emerging technologies are witnessing unprecedented growth, further impacting established business models. This only means that businesses too will have to change, evolve and be transformation ready.
Being transformation-ready enables organizations to adapt to the changes in the business environment and creates an inclusive internal ecosystem that can accelerate and opportunity or avert a challenge. It means being alert to the business model shape shifting in the marketplace so as to identify areas where implementing a transformation exercise will enable the company to gain greater grounds in reducing costs, building market share, exploring wider markets, entering new territories, building customer loyalty or increasing customer satisfaction. It essentially is moving an organization from a current position to a new position to gain advantage in the marketplace or to create a new marketplace.
In today’s fast changing landscape fueled by technology, incumbents are at greater risk due to legacies and process standardizations. The changes are arising on two fronts, the competitors and the customers. Competition that can foresee the inevitable are better positioned to adopt or innovate to maximize their impact on the future business environment, whereas customers are embracing technology to better their buying position and simplify their route to consumption. This has led most organizations without an option, but to put their transformation efforts at the helm of their priorities. The buzzwords reverberating along the corporate corridors today are transformation and digitization.
The story of Kodak and Fujifilm is a historic affirmation to the opportunities that can emerge from changing ecosystems. The difference between the success of Fujifilm and the failure of Kodak lies in the way both of these companies valued their legacy and visualized the future.
When we evaluate their response to the change in terms of visualizing the future, Fujifilm was clear that the imaging business was dying and chose to diversify rather than pursuing a diminishing market, Kodak on the other hand tried to duplicate the printing part of their business model in the digital world (they did this by installing digital kiosks in their partner stores). But then a company called Facebook came along, that made printing pictures obsolete and brought-in the age of sharing pictures online.
Fujifilm built on their legacy by channeling their existing technical expertise to explore diversified growth markets like pharmaceuticals, cosmetics and functional materials. Leveraging their knowledge and expertise, they created a variety of high-performance films that are essential for making LCD panels. Technological assets such as those on collagen and nanoparticle formulation fostered through the photographic business were applied to cosmetics and other new business fields.
So when & how does an organization realize the need to transform?
Complexity and volatility are the primary drivers of transformation. Markets don’t change overnight, but transform with the development of new and agile business models that enter and change the ecosystem. Organizations too need to evolve, enabling them to stay in relevance and aligned to the needs of the markets and their customers. It is therefore a continuous process, and I dare say transformation is here to stay; it would only be imperative that organizations in time will establish a transformation office to collaborate with the core strategy team.
Failure?
However, various academic and industry researches have shown that almost 80 percent of transformations fail. This failure by most has been attributed to leadership cognizance and communication inadequacy.
Change is laborious; it is moving out of the comfort zone and getting to a target that may be obscure in the beginning. Lack of communication in helping employees and teams understand & see the big picture, developing the right skills to address & manage the change, and making the right infrastructure available are mostly quoted as the reasons for failure. In 2018 companies invested over $1.3 trillion into transformation initiatives, 70 percent of which failed in well-known and professionally managed companies like GE, Ford and P&G. The common reason for such failure being attributed to communication breakdown.
How then should organizations approach transformation?
The fact is, for the success of a transformation initiative, the focus has to be on the four elementary blocks; processes, organization culture, capabilities and growth.
The first, process is a singular indication of the manner in which an organization operates. It is evident if you plan to transform, the processes too would have to transform. The peculiarity is that the future isn’t yet here and therefore the processes need to be steered by ideas, that which will eventually motivate initiatives and hence arriving at quantifiable goals.
The second, organization culture is the essence of a transformation exercise. Unfortunately today, most organizations have a top down culture communication and rarely, really practice the values pasted across the organization. For a transformation initiative, it is imperative that the culture of the organization emboldens the transformation process to make it effective and sustainable. The culture is the keeper of persistency.
The third, capabilities are the characteristic manifestations of the primary requisites for a successful transformation initiative. Measures taken to assess skill shortage and provide platforms to enhance skills go a long way in achieving the transformation goals.
And lastly, growth is the stimulus that provides the necessary desire to experience goal achievement. An unhindered focus for growth enables the organization to relentlessly pursue its transformation objectives.
Measures taken to assess skill shortage and provide platforms to enhance skills, go a long way in achieving the transformation goals
So when & how does an organization realize the need to transform?
Complexity and volatility are the primary drivers of transformation. Markets don’t change overnight, but transform with the development of new and agile business models that enter and change the ecosystem. Organizations too need to evolve, enabling them to stay in relevance and aligned to the needs of the markets and their customers. It is therefore a continuous process, and I dare say transformation is here to stay; it would only be imperative that organizations in time will establish a transformation office to collaborate with the core strategy team.
Failure?
However, various academic and industry researches have shown that almost 80 percent of transformations fail. This failure by most has been attributed to leadership cognizance and communication inadequacy.
Change is laborious; it is moving out of the comfort zone and getting to a target that may be obscure in the beginning. Lack of communication in helping employees and teams understand & see the big picture, developing the right skills to address & manage the change, and making the right infrastructure available are mostly quoted as the reasons for failure. In 2018 companies invested over $1.3 trillion into transformation initiatives, 70 percent of which failed in well-known and professionally managed companies like GE, Ford and P&G. The common reason for such failure being attributed to communication breakdown.
How then should organizations approach transformation?
The fact is, for the success of a transformation initiative, the focus has to be on the four elementary blocks; processes, organization culture, capabilities and growth.
The first, process is a singular indication of the manner in which an organization operates. It is evident if you plan to transform, the processes too would have to transform. The peculiarity is that the future isn’t yet here and therefore the processes need to be steered by ideas, that which will eventually motivate initiatives and hence arriving at quantifiable goals.
The second, organization culture is the essence of a transformation exercise. Unfortunately today, most organizations have a top down culture communication and rarely, really practice the values pasted across the organization. For a transformation initiative, it is imperative that the culture of the organization emboldens the transformation process to make it effective and sustainable. The culture is the keeper of persistency.
The third, capabilities are the characteristic manifestations of the primary requisites for a successful transformation initiative. Measures taken to assess skill shortage and provide platforms to enhance skills go a long way in achieving the transformation goals.
And lastly, growth is the stimulus that provides the necessary desire to experience goal achievement. An unhindered focus for growth enables the organization to relentlessly pursue its transformation objectives.
