Business transformation is an often-quoted phrase, but the meaning isn’t always clear.
Transforming your business is about achieving a basic and sustainable shift in the way your company operates to deliver distinctive value to your customers and shareholders.
There’s a big difference between making changes to specific areas of a business and executing an integrated multi-channel strategy.
Business transformation requires an alignment and often a reinvention of vital components of the business model with the strategic direction and customer value propositions. These components include business structures, partnerships, people, processes and technology and the day-to-day activities associated with each of these.
Transformation programs are medium to long-term. Fundamental to success is a strong focus on benefits delivery.
The vision behind a transformation program should be aspirational, but the objectives and benefits must be achievable. A transformation program will typically be driven by the need to deliver a distinctive customer experience, lift the business off a performance plateau, share risk or respond to competitive threats. Whatever your motive, there will be many moving parts to manage, including maintaining results during the transformation.
If you’re operating a global business, leading change across national cultures and time zones will be an important factor in your program’s success. Governance models, program management office (PMO) role and resourcing, team collaboration and communication activities must reflect these variations. For instance, imagine you’re the CEO of a bank confronted with the need to protect and increase revenue, reduce operating costs, create a distinctive customer experience, establish seamless any-time-any-place customer service, refocus on key customer segments, comply with a rapidly changing regulatory environment and financial reporting standards and ensure risk management is owned by everyone in the business.
The solution to this bank’s challenges will involve:
- radical changes to the business model and processes;
- technology platforms;
- performance reporting;
- marketing programs;
- corporate culture; and
- skills development.
A large transformation program like this should reinvent the business. This example illustrates the range of disciplines companies might need to ensure the right level of business resources and subject-matter expertise is available to the program. Team members might be dispersed, and many will have their day-to-day business roles to fulfill in addition to the demands placed on them by the program.
Key focus areas for large-scale multidisciplined programs with multiple deliverables include ensuring that each project within the program has clearly defined benefits and that the project team understands what needs to be done to deliver these. Active leadership, effective program governance, strong program management disciplines and accurate status reporting are essential.
Leadership development and cultural change might seem less important but will often become critical to the program’s success. It’s important to be thorough and objective about the real drivers of performance and the root causes of issues so that the program is set up for success from the start.
Running a large program is similar to running a business. The leadership team needs to bring the program’s purpose and aims to life, be engaged and well informed and work to build a collaborative and problem-solving ethos across the program. A transformation program is a vehicle for driving change; you need to keep your foot firmly on the gas until you reach your destination. •
