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Transforming a Traditional Business

James Huang | 2021.07.25

Traditional businesses, because of the legacy they have in terms of business models and technologies, have struggled with their digital transformation when compared with born-digital companies.  While conducting business consulting with clients and going through their business model, I realise the change management is the key success factor.

Even though the literature on business transformation is enormous, managerial and organisational appetite for change tends to be limited. Leaders of organisations that are remotely successful are not inclined to change things (at all). Transforming the business is not the same as implementing incremental change or improvements in processes, operations and products. We argue that transformation refers to an organisation achieving a sustainable quantum-leap improvement in performance while transforming the mindsets of employees and thus the culture of the organisation.

We illustrate a 3 steps approach to help you to understand how transformation works.

Develop an appetite for innovation

A bold move or business innovation is preceded by a crisp, inspiring articulation of the vision and strategic objectives for the change initiatives.  (and not about information technology) This is highly critical for established organisations that want to innovate their businesses. Visions tend to become stale over time and revisiting them can look like a cynical exercise rather than a genuine pursuit of change. But, it can – and increasingly must — be done.

Transformation needs not be so elusive for established organisations. The right vision, knowledge about needs and transformation know-how can convert strategic apathy into action. First they need to understand their own capacity to change and the fundamental building blocks of successful transformation.

A well-articulated digital agenda and structured approach

Conduct a readiness assessment across business attributes. The business maturity assessment should encompass dimensions across customer centricity, business models, leadership, talent and execution.

Reimagine the business, products and services by taking advantage of the environment – focus on newer sources of value creation, meaningful customer and system engagement, to create innovative service propositions.

Adapt industry-aligned digital business processes, but curate and contextualize them to help orchestrate interactions in your environment.

To build a truly digital enterprise a holistic change management philosophy across talent, processes, systems and the encompassing environment must complement entire organisation.  In general, more successful than adopting a more siloed approach to digital transformation.

Leverage knowledge about customers

Few people question the importance of understanding and leveraging customer insights and megatrends for any business purpose. The companies that are leveraging and mastering customer experience in their transformation journeys realise higher rates of success in market differentiation, scale and efficiency, customer loyalty, revenues, return on investment, and cost savings. What is clear is that there is a strong need for more effective outside-in approaches to transformation initiatives.

Adopt agile ways of working

A third key block highlights the need to adopt a flat, adaptable and cross-functional transformation operating system that enables speed and mobility for the employees driving the change. It is clearly very difficult for established companies to shift structures and ways of working. This challenge demands ambidextrous ways of working, the ability to do two potentially contradictory things at the same time. At its heart is the ability to transform the organisation while keeping up with the core business. This requires business agility capabilities.

This resulted in a more effective operating system and an organisational structure that enabled collaboration and fast decision-making. The way the teams worked better fits the pace of change and means they are better equipped to overcome different business challenges.

From our experience, most traditional business move slowly on changes mostly due to corporate culture and "it-works" attitude.

Transforming a Traditional Business
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