Businesses that want to survive must, unfortunately, evolve. But while this process is often painful, it can also be highly rewarding if done correctly. And once it’s out of the way, it’s a massive load off your mind.
What Is Business Transformation?
You can think of business transformation as a fundamental redesign of your firm. Often it involves making changes at the basic level to improve the amount of value you’re able to generate and get you out of survival mode into market dominance.
Business transformation isn’t just cost cutting. If your actions are going to qualify as truly transformative, they need to adjust something basic about your firm. For example, transformations could involve your strategy and operating model. They could also include things like technology data and architecture, or even how you handle your people and adjust your customer experience.
As an example, Netflix is a company that really did undergo a transformation. It began by mailing films but then decided to go down the app route, providing suggested content to people’s computers and smart TVs.
Microsoft is another good example. It began life building operating systems for PCs but now it is a cloud-first and mobile firm, reflecting changing device needs and business model requirements.
Why Do Companies Transform?
Companies transform for numerous reasons. The main trigger is usually existential threat. A lot of businesses are just at risk of going under, especially as things like technology change.
Another reason is simply pure technical disruption. A lot of businesses find themselves in the wrong industry and just get unlucky. Others survive for a while and then something special comes along, like AI, which changes everything.
Even regulations can have a big impact, along with the shape of government. Authorities might shut down the economy and deprive some companies of their source of income, causing them to have to pivot to the only space.
How Long Do Various Transformations Take?
How long a transformation takes depends on its nature. Digital transformations usually require between two and five years and lean heavily on things like technology and data enablement.
Then, there are operational transformations. These may take up to seven years in some companies and require a lot of planning, especially when switching to new premises.
Cultural transformations are a little shorter. These involve swapping out problematic team members and giving management an overhaul to meet the needs of the business.
Then you sometimes see “turnarounds” in a separate category. These are when brands go into survival mode, just trying to get through the next few months.
How To Achieve Transformation
Achieving transformation begins with a compelling vision. The company leader needs to be able to articulate what the company should look like in 5 to 10 years, with smaller milestones along the way.
Then, they should build a guiding coalition. There should be a hardcore of people who really believe in the company vision and are willing to bring it to life. Scaling the new model should be natural.
