Whether you are a business leader or an aspiring one, disruption tends to take override medium-term change and long-term transformation. While we all know that the top job can be a lonely and hectic place, sometimes you need all three. Shortage of lorry drivers? Sounds fairly urgent. Shortage of fuel? Again, fairly urgent. Covid outbreak? Yes, to that too. The inbox continues to fill up. The one thing they all have in common. They are short-term, tactical issues to resolve but also blockers to business improvement. So, we take a look at what types of change are there and what is transformation.
The wrong types of change
Yes, business performance matters. It matters to keep cash flow moving and to keep goods and services working for customers. But does fixing tactical day-to-day issues improve long-term business performance? The same criticism is ironically levelled at the government today who seem to react to almost every problem. The bold claims of having plans to deal with each issue never seem to materialise. This is the malaise into which all but the best leaders with the most capable teams and proper accountability can fall into.
Shifting the focus from short-term issues to long-term strategic change takes an objectivity that repeated crises can distract us from. Sometimes, we fail to comprehend the strategic imperatives for change with so much going on. So, what is the right kind of change?
The right types of change
Moving the conversation from “How do we get goods from A to B?” to “What strategic change programmes do we need to embark on?” can be hard. Kicking the can down the road isn’t always possible on major issues. It can also be hard to find the time to take two days out for a management away day or a ‘hot house’. Interestingly, the political landscape in many ways mirrors what is happening in business i.e. we seem to lurch from crisis to crisis. It distracts us from what matters, which is long-term strategic change to increase competitiveness and our reputation on the world stage.
In some organisations, business leaders ask their subordinates to enact change. This ranges from the tactical, “Make sure our goods get to stores”, to the more strategic, “Make sure our warehouse management system is fit for our growth plans”. While both would seem to have obvious ownership within the C-Suite, are they equipped to manage the latter? Most would argue that they are, that they have the skills, the infrastructure and also the people to make it work. So, let’s look at what we know about transformation.
What is transformation?
A recent study in the Harvard Business Review notes that 78% of transformation programmes are unsuccessful. This compares to John Kotter’s hypothesis that 70% of corporate transformations would end in failure. Add to this the statistic that around 1/3 of employees don’t understand why change is happening and you get the idea. In summary, there is a missing link between the directive and the outcome.
Successful transformations involve all stakeholders on a change journey. The statistics demonstrate that change is harder than we think. One definition of ‘transformation’ is “a fundamental change in how an organisation conducts business, resulting in financial or societal impact”. Transformation, or it’s intended meaning, can also obscure that there are three underlying types of business change.
The three types of business change
- Operational change focuses on doing what you do faster, cheaper or better. If your competitive position is deteriorating, this type of change may only delay decline.
- Operating model change involves doing what you do in a different way. Myopic businesses face an existential threat if they miss a changing competitive landscape.
- Strategic change means modifying your core proposition and the markets in which you operate. Such changes are high risk, possibly high reward, and require a committed effort across an organisation.
In general, much business change is short to medium term. Real transformation is intended to deliver long-term, sustainable advantage. Doing what we do today but a little bit better does not facilitate long-term survival. Adjacent to this, disciples of Porter’s Five Forces or followers of Levitt’s Marketing Myopia are all too aware of threats and missed opportunities.
Changing to transformation
Business leaders generally seek cost savings and improved business performance. These outcomes support the short-term survival of their business and give it oxygen to invest. However, if we are ‘firefighting’ or asking for short-term change, how can we transform? Do we have the confidence to question what the business does? Can we shift the business into another market with a new set of competitors? Should we exit an industry that we know inside out? How do we adapt lead generation processes for a new market?
Some notable experts suggest that re-designing the operating model and a new strategic business play is where real long-term value occurs. Alternatively, the pursuit of operational efficiencies enables some of the strategic choices that are otherwise unavailable.
Making change and transformation a success
We all require support from time to time. Whether you need a confidant, a change agent, an analytical mind or Lean Six Sigma, there are many options. Internally, your employees have a wide range of talents to leverage. The challenge is when those people are already fully utilised or too internally-focused. Externally, there are consultants, coaches and project managers to name a few. The benefits are bandwidth, objectivity, new skills, confidentiality and a broad external view.
In conclusion, businesses have a higher probability of success if they focus on people during change and transformation. The lack of internal resource, soft skills or knowledge of how to manage a change programme can constrain your business, even if you have vast technical expertise in your industry. If only 22% of transformation programmes succeed in improving financial and reputational outcomes, maybe it’s time to bring in help for your people.
Making the right types of change
Here at Think Beyond, we provide a range of consulting services and business transformation support. We offer value add solutions to marketers and the C-Suite to find new opportunities and accelerate business performance. Our philosophy of change, our specialists in business and our results on outcomes support your growth ambitions and marketing contribution.
If you would like to speak with a consultant, simply call 01565 632206 to book an appointment. Alternatively, why not email sales@think-beyond.co.uk or key in a few details online for a call back.
Finally, why not check out our range of change services and we would be happy to tell you more.