Transformation – to be on fire or nothing but smoke and mirrors?

Strategic planning, flexible changing

If you know where you are going, you perceive change as the road to get there and not as a disturbance. Most people agree that nowadays change cycles are becoming ever faster with the market demanding a high degree of flexibility from companies. Companies which are not able to adapt to the changing requirements of the clients are ultimately in danger of disappearing. Transformation implemented intelligently creates competitive advantages for companies and at the same time makes flexible organisational structures possible.

For a start-up, change is daily business because during the ramp-up phase of a company the product or the service is constantly being adjusted to suit the requirements of the clients and the founders are developing as a team. In the growth and maturity phase of a company the readiness for change gradually decreases as the focus lies more on the efficiency of the operational processes.
Over time it requires ever greater effort to realise even small increases of efficiency.
The most important points for achieving successful transformation are explained below.

The right amount of transformation

Companies which do not adapt to the changing requirements of their clients could soon find that their clients start looking around for a new product that suits their demands better. This means standing still is not an option.
On the other hand, companies which pursue a permanent strategy of change will ultimately tire of it. So hyperactivity is not an option either.
If you want to transform, you need to know where you are going. You have to be able to imagine what the future looks like (vision) and how to get there (strategy). Once the vision and strategy are defined, the change can be conducted with targets and focus.

Keeping up with the fast pace

Why should you develop a strategy?
Is it not true that what is defined today is already obsolete tomorrow?
Of course, change takes place at a fast pace, but it is not as fast as all that, so a strategy design would not be worth it. Today the planning horizon in most industries is shorter, but a vision and a strategy are still important for successful transformation.
Unclear and uncoordinated transformation attempts do not lead to people believing in a successful outcome. Consequently there is no commitment. So what remains? Nothing but smoke and mirrors.
Make it better. To convince employees to work towards change, the objective, benefits and the route to get there must be clear and realistic. This creates enthusiasm and motivation for an undertaking. What began as a flame becomes a fire.

Time

Successful transformations do not happen overnight. The starting point is an organisation that works well and has correspondingly efficient processes. With the start of the change process this system will be destabilised because now there is an “old” and a “new” world which temporarily have to run in parallel. Both worlds need resources. As soon as there is only the “new” world, the system can stabilise again. The organisation is fully coordinated and the processes become more efficient. This phase of stabilisation is crucial and takes time.
If, in this time, a new transformation process were to start, the company would be confronted with moving targets – something that would extend the change process significantly.

The relevance of quick wins

The expressions ”quick wins” and “low hanging fruits“ are being talked about all over. They refer to results that can be realised fast and with minimal effort and which can be seen as initial success.
Although these terms have been overused, those first successes should not be underestimated. Who can continue to be motivated in an undertaking that produces no successful results over a longer period?
The first successes – even if they are very small – contribute substantially to the acceptance of the project and foster the conviction that the change could be implemented successfully.

The role of management

It seems only natural that a transformation needs to be initiated, supported and lived by the top management. But how do things look in reality? Far from good.
It is no secret that many transformations fail because of lacking management support. But what support is needed? It is one thing to design the vision and strategy, and another thing to implement it. This entails making prompt decisions based on the strategy. Decisions which are not always perceived as positive within the company. As soon as these decisions have been made, the management should be the first to follow them and be a role model for others.
Furthermore, priorities need to be set; what is to be implemented when and what will not be implemented. The available resources are aligned with those priorities and will be rearranged in the case of reprioritising.
At the same time you should not forget to free up the respective employees of their daily business because if the project members are always tied up in their daily business they cannot concentrate on a transformation.
A positive management attitude is crucial because if managers do not believe in the transformation, who will?

The fear of failure

There is no change without risk. Often transformations are not started because the fear of failure is too big. “Let’s wait and see what the competitors do.” This attitude means a company can be too late in starting its own transformation.
There is always the possibility that some conditions will change during a transformation, such as the law, competitors, etc.
This can lead to a change in priorities or even in an adaptation of the strategy.
However this is not the end of the world because assumptions and decisions are always based on the information available at the time. Decisions are not carved in stone and can be revised as soon as the environment or the information changes, and as soon as it becomes clear that the road taken will not lead to the desired goal.

Keep up, keep up, keep up

What sounds so easy needs a lot of discipline and energy. Constantly keeping up means always being up-to-date on new developments in the market and in research. In other words, you are always having to step back from daily business and dive into strategy. It is also imperative to meet people from other industries to swap ideas.
Why not just do something when it is needed? This is a valid question, which begs a counter question. How do you know when it is time?
In many industries, the first signs of change are barely visible at the beginning. At this point you cannot say if it is hype or reality.
When the change actually becomes obvious it is often too late to react because transformation takes time.
Companies that are constantly engaged with developments around them and that change accordingly are already more flexible in their mindset and structure. It is precisely this flexibility in organisation and in the mindset that creates competitive advantage because all employees contribute to the development and to the success.

Conclusion

Transformations in companies are important to keep up with changing client requirements. What has worked successfully for the last twenty years will not necessarily work for the next twenty.
Succeeding in creating flexible organisational structures, which continuously engage with developments in the market, is the best way of creating competitive advantage.
It takes a vision and a strategy to successfully implement transformations. As soon as it is clear where the journey is going, the change can be conducted efficiently.
Initial successes that are quick to realise will increase the acceptance of the change and the belief in its feasibility.
With the right management support, the undertaking receives the necessary power and there are no more obstacles to making the change happen.