In layman’s terms, ‘business transformation’ involves any changes implemented by the management of an organisation to help deal with the vagaries of the market better. It is an umbrella term that includes many different types of changes – operational, cultural or digital, etc.
But why change when all is going well, right? Wrong! In these times of unprecedented socio-economic and political changes, business transformation allows firms to create new opportunities for growth. Incremental changes are just not enough. What is needed is sustained growth and improvement.
But there many internal benefits of undergoing a business transformation as well, some of them with almost immediate results. A sound strategy for change can, for one, serve as a foundation for other important corporate decisions like resource allocation or setting performance targets, thereby creating greater value. It also helps outline the transformation ambition, i.e. the objectives the firm hopes to achieve by changing itself.
Having such a strategy puts added focus on the specific organisational capabilities that will be required in the transformation process. In reality, just some parts of an organisation are key here. Highlighting these can generate more value in the long-run and maybe even give way to a competitive advantage over others. This way, the firm can evolve faster. Also, through focused support, they can also hone the skills of the relevant departments further, or establish new ones, ensuring continuous, efficient transformation.
Business transformation is also a great way for leaders to empower the workforce and make it more adaptive of change. This will not only add value to the firm but also the careers of those working in it.
It’s all about adding value. This is the thread that binds the overall business strategy by defining and breaking down the transformation plan into specific targets and the capabilities required to meet them. Failure to determine the value expected can cause problems downstream, ultimately leading to the failure of the entire transformation plan.