Beyond the hype: what a ‘business transformation’ actually entails

It’s becom­ing ever more dif­fi­cult to avoid the phrase ‘busi­ness trans­for­ma­tion’ in cor­po­rate com­mu­ni­ca­tions. Firms of all sizes sprin­kle it lib­er­al­ly through their annu­al reports, while exec­u­tives seem­ing­ly can’t resist drop­ping it into their pre­sen­ta­tions to con­vince poten­tial clients and investors of their flex­i­bil­i­ty and dynamism.

But does the real­i­ty match up to the rhetoric? The more that peo­ple talk about busi­ness trans­for­ma­tion, the hard­er it is to define. As a result of its use in so many dif­fer­ent con­texts, the con­cept could end up mean­ing noth­ing much at all. 

“Busi­ness trans­for­ma­tion in prac­tice is so much more than a buzz­word,” stress­es Sarah Austin, founder and direc­tor of the Lloyds Bank British Busi­ness Excel­lence Awards. “Although the term is cer­tain­ly mis­used, mis­ap­pro­pri­at­ed and, con­se­quent­ly, weak­ened, busi­ness trans­for­ma­tion pro­vides val­ue beyond mere lin­guis­tics.”

Stu­art Smith agrees – as well he might, giv­en that he spe­cialis­es in busi­ness trans­for­ma­tions in his work as man­ag­ing part­ner at the Tes­siant con­sul­tan­cy. 

“Busi­ness trans­for­ma­tion is crit­i­cal to gain­ing the ben­e­fits of dis­rup­tive tech­nolo­gies and shifts in con­sumer behav­iour. It brings those ben­e­fits to cus­tomers and col­leagues and enables busi­ness­es to com­pete, sur­vive and thrive as mar­ket con­di­tions evolve,” he says.

The process can take numer­ous forms, but it will always require an enter­prise to think deeply about its cur­rent posi­tion and where it wants to be after it has trans­formed itself. That includes gath­er­ing intel­li­gence on what com­peti­tors are doing and how they’ve man­aged to dif­fer­en­ti­ate them­selves. Only then will it be pos­si­ble to come up with an effec­tive trans­for­ma­tion strat­e­gy, Smith says. 

“Once your vision is clear, the next stage is to look at your peo­ple, process­es and sys­tems to under­stand what needs to be improved or replaced,” he says. “A suc­cess­ful busi­ness trans­for­ma­tion involves set­ting up a pro­gramme that iden­ti­fies that vision, sets clear goals and works through them to achieve the desired changes.”

The goal-set­ting process is cru­cial – it’s hard to enact a change if you don’t have a thor­ough under­stand­ing of all the objec­tives you’re try­ing to achieve with it. Improv­ing oper­a­tional process­es is usu­al­ly a min­i­mum require­ment, as is enhanc­ing the company’s capac­i­ty to adjust more quick­ly to changes in its mar­kets. 

Such work demands “strong lead­er­ship and the align­ment of the lead­er­ship team to work towards a com­mon pur­pose”. So says Una Kee­shan, trans­for­ma­tion leader for west­ern Europe at Soft­ware­ONE, a Swiss-based com­pa­ny that has recent­ly con­vert­ed itself from a soft­ware reseller to a cloud ser­vice provider.

It’s impor­tant to dif­fer­en­ti­ate between the nat­ur­al devel­op­ment of a busi­ness, includ­ing the tweaks it will make along the way to stay com­pet­i­tive, and the series of whole­sale changes imposed by a mean­ing­ful trans­for­ma­tion. For instance, com­pa­nies may reg­u­lar­ly update their IT capa­bil­i­ties by buy­ing new com­put­ers, but mov­ing from tra­di­tion­al serv­er-based net­work archi­tec­ture to a cloud-based set-up would be a far more rad­i­cal move.

“While a com­pa­ny will be adapt­ing con­stant­ly to keep pace with cus­tomer demand and gains made by its com­peti­tors, it is impor­tant to set para­me­ters around what the busi­ness is try­ing to achieve from its trans­for­ma­tion,” Smith says.

It can there­fore be ben­e­fi­cial to seek views from out­side the enter­prise about how it might need to mod­i­fy its approach, ensur­ing that what’s billed as a trans­for­ma­tion isn’t mere­ly a case of busi­ness as usu­al.

He believes that there is “a strong argu­ment for work­ing with con­sul­tants who’ve actu­al­ly been there and led trans­for­ma­tion pro­grammes for organ­i­sa­tions of a sim­i­lar scale to your own, rather than tak­ing a play­book approach”. 

Smith takes what he’s learnt through­out his career work­ing for large retail­ers – includ­ing Tesco, Mor­risons and Aus­tralian super­mar­ket giant Coles Group – into the trans­for­ma­tion work he does with his clients. “The consultant’s role here”, he adds, “is to make this process as sim­ple and acces­si­ble as pos­si­ble.”

Kee­shan cites Ama­zon as an exam­ple of a huge­ly suc­cess­ful busi­ness trans­for­ma­tion. “It start­ed out sell­ing books online and then trans­formed to sell­ing every­thing online,” she says. “And now it’s become an ‘every­thing com­pa­ny’. Its busi­ness ranges from ecom­merce and phys­i­cal retail (through its acqui­si­tion of Whole Foods) to cloud ser­vice pro­vi­sion with Ama­zon Web Ser­vices and on-demand con­tent pro­vi­sion with Prime Video.” 

What­ev­er the scope of the trans­for­ma­tion, it’s some­thing that requires the under­stand­ing and sup­port of the whole work­force, not least because the prospect of sig­nif­i­cant changes will often cause con­cern among employ­ees about their job secu­ri­ty. 

“You need con­stant com­mu­ni­ca­tion of the ben­e­fits and good change man­age­ment prac­tices to ensure that there’s a desire with­in the organ­i­sa­tion to be bet­ter,” Kee­shan says.

She adds that the lead­ers of the project need to iden­ti­fy prob­lems and fig­ure out work­able solu­tions to these before tak­ing con­crete action. One key fac­tor in a suc­cess­ful trans­for­ma­tion, in her view, is to gain an under­stand­ing of all the rel­e­vant “inter­de­pen­den­cies incon­sis­ten­cies and pain points before ven­tur­ing into chang­ing sys­tems, alter­ing the organ­i­sa­tion­al struc­ture or imple­ment­ing new ways of doing busi­ness”.

It’s also cru­cial to keep a con­stant watch over the organ­i­sa­tion to mon­i­tor what ele­ments could be changed for the bet­ter, Austin advis­es. To do this, busi­ness lead­ers need to use “data-dri­ven insights and an infor­ma­tion-led foun­da­tion”, she says, adding: “With sus­tain­abil­i­ty comes growth – and with growth comes change.” 

Sim­ply say­ing you’re under­tak­ing a busi­ness trans­for­ma­tion, mak­ing a big change and then doing noth­ing for the next decade sim­ply won’t cut it any­more. Change is con­stant in busi­ness – as it should be in yours.