On the uncomfortableness and urgency of business transformation
Transformation, the act or process of changing from one state to another, is essential for businesses to survive — and thrive into the future. But it’s not very comfortable, not for organisations and not for the individuals in it, so arming oneself with understanding transformation basics is a good start.
The world is rapidly changing and this makes the topic of transformation, often in this time illustrated by digital transformation, a highly current issue. Globalisation, new demands from stakeholders, policy and regulation, together with new digital technologies, are changing the way we do business, and will continue to do so.
The field of business transformation is about making changes to meet these new circumstances. And there isn’t any “silver bullet solution” that applies to all companies, so of course one needs to start from the own operations and characteristics of the company to figure out not only what needs to be done now — but also in the future. But one thing is clear, business need to change from the current state they are in, to a future state where even more pressure and higher expectations will be put on businesses and its leaders.
But to change an organisation as a whole, one must also accept that it will entail changing the individuals in the organisation. That means transformation on a personal level – and although it might seem small in light of urgent organisational or even global crisis, it is the beginning of any large change. As Gandhi so famously said: “You must be the change you want to see in the world.”
“As human beings, our greatness lies not so much in being able to remake the world — that is the myth of the atomic age — as in being able to remake ourselves.”
It’s a fact that the old way of doing business need to change, but not quite as apparent as the need of changing the people who runs the businesses. It is simply not possible to transform an organisation in a long-term way without having all of the people along for the ride.
Why the need to transform?
First of all, businesses need to transform to become resilient. One common perception of resilience is as being the capacity or ability to withstand and survive when faced with chocks or sudden change. But resilience is a three-part concept, involving persistence, adaptability and transformability. Persistence is the ability to withstand chocks, adaptability to react and reform when change occurs, and transformability the capacity to create new systems and solutions.
Just surviving and responding different chocks is not enough to make it in the long-run. The world is constantly shifting where new demands, regulations, changing markets and globalisation are affecting companies in a drastically way, and businesses need to respond even before chocks and disturbances occur.
Business transformation initiatives are today unfortunately often a response to some form of crises or trigger, prompting the company to react. According to KPMG’s Transformation survey, the primary trigger for business transformation for all industries are changing customer demands, where customers today require more from companies and the products or services they provide.
Challenges facing businesses today are complex and not always easy to foresee, and they need the tools to be able to not only adapt to change — but also to be able to anticipate the unanticipated. Sustainability can’t be achieved by any single action, it is an ongoing process and requires companies to transform the whole core and essence of the business to be able to not only survive, but also thrive in a future context. Many businesses today use new methods, like for example technology, to solve their problems. But as Scott Anthony stated, in a quickly changing world playing an old game better is simply insufficient.
How do we transform businesses?
So how do we gear towards the future? What are the important skills to enhance transformation processes in businesses?
Well at first, it’s not always the biggest and strongest businesses that survive, but the ones most susceptible to change. Companies that are the most resilient are the ones with adaptability, flexibility and willingness to change. This is why we choose to analyse the following crucial aspects to assess transformation in businesses.
Willingness to innovate for change is one of the essential abilities for a transformation to be lasting. Company’s who innovates for future markets and shows creativity in problem-solving are more likely to come up with solutions not only tackling current issues, but ones facing them in the future.
Another important factor to transformational success is culture. The company needs to have a tolerant, accepting and progressive corporate culture conducive to change, and where loyalty towards purpose trumps loyalty towards existing structures. A company with a culture that promotes transformation is more likely to not only change the own organisation — but also markets.
To be able to transform, a company must display a willingness to learn, from all stakeholders but also from past mistakes. A company that is willing to learn from others and reflects on the past mistakes takes action towards the future.
One of the biggest challenges of business transformation can be a leader who is content with past performance and success. Leadership is maybe the most important aspects to a successful business transformation, and it can start with one person with one idea to lead change in an entire organisation.
Transformation — a key component of Inter Business
Inter Business facilitates a top description of a business, which contains a view of holistic value creation into the future. But shifting from results (shareholder value), by way of sustainability (shared value), to measuring the key skills of Inter Business we can estimate holistic value creation of a company, now and tomorrow.
Transformation is one of four key skills, which together with purpose, empathy and system approach, reveals the companies that will be a force to be reckoned with into an ever-changing future.
This article is part of our series of reflecting on Inter Business and all the different angles of getting towards a future of interconnected business innovating for humanity.
Huitric, M. (ed.) (2009) Biodiversity, ecosystem services and resilience. Governance for a future with global changes. Background report for the scientific workshop “Biodiversity, ecosystem services and governance — targets beyond 2010 on Tjärnö, Sweden, 4–6 September, 2009
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