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Few business leaders fully appreciate what transformation is until they actually start theirs and it’s fair to say that most find the new business paradigm pretty uncomfortable. It’s not just the principle of change that is causing the discomfort, nor the resulting environment. When your business experience is built on a culture of rigid long-term plans and fixed processes even the approach you have to take to transformation can make traditional business leaders feel insecure.
The main reason every business has to go through transformation is that it is impossible for traditionally run organisations to compete with those that have harnessed technology. To succeed in today’s business environment requires far greater responsiveness and flexibility than any traditional business model could viably deliver.
Challenges and opportunities that can radically change the fortunes of a business emerge literally every day. An initiative taken in the course of a project might open up unforseen additional opportunities and today’s organisation’s have to be able to change direction to exploit these immediately. Technology can help them do that, but only if business leaders and the managers that support them are of the right mind-set.
It’s hard to get business leaders to understand just how fast things change in the digital world until they find themselves in the midst of it. Most traditional businesses, even multi-nationals, are only still trading because no real digital disrupter has yet arrived in their sector, but when they do, legacy businesses and brands can disappear, literally in weeks. What’s more, the challenge will rarely come from familiar competitors. It’s usually newcomers who cause the most disruption and they will rarely compete head-on, so many businesses don’t even see the fatal blow coming. Take Netflix for example.
The Netflix, Blockbuster story is frequently used to illustrate how a disrupter can influence a sector, but many commentators are only now recognising the real impact of Netflix. The organisation hasn’t just changed the way the video rental market operates. In fact, this is the least of its influence. Netflix is now a producer of TV series and feature films, forcing the big studios to re-think their model. They are accelerating the slide from big screen to small, causing cinema chains to go back to the drawing board and they are competing with TV channels for in-home distribution, which is turning the traditional idea of TV on its head. Haven’t you noticed that even the BBC are offering major series that they are currently showing in weekly episodes, in advance, as one big binge viewing via on-line streaming?
This is perhaps the clearest illustration of how a disrupter in one sector will transform adjacent sectors, but there are many more. Goggle, Tesla and Uber have done the same with electric autonomous vehicles, potentially eliminating traditional component manufacturers, taxi drivers, haulage companies, changing traffic management, doing away with vehicle service centres, auto distributors and finance companies … the list of consequences is endless.
Preparing a traditional organisation for this kind of challenge is often harder than starting from scratch because you have to literally undo much of what you have spent decades creating, before you can start the re-build. If you are keen on the property renovations series’ that are popular on TV at the moment you’ll be familiar with the choice property owners often face between renovation and demolition and re-build. Business transformation is rarely the former, but the biggest change you’ll have to undergo is one of mind-set and this is where many business leaders I encounter struggle most.
One of the main obstacles to attitude change is the view that many leaders have of their organisation. We have been struggling for years to see organisations as brands, but now there is no alternative. Many business leaders are still clinging desperately to a vision of their organisation as a product or process. This emerges time and again in my Brand Discovery workshops when I ask delegates the purpose of their organisation and they reply with something like “we make this or that” rather than defining themselves in terms of the need they fulfil.
Organisations that are brand-focussed are far better positioned for transformation than those that remain entrenched in the view that they are primarily about process. Because brands are predicated on a promise – expressed or inferred – organisation that lead with their brand are, by definition, recognising that everything else is just part of the delivery system. This is an essential paradigm shift that will make all the difference to an organisation’s ability to transform.
Once the incidentals of a business cease to be a sacred cow, the focus of the organisation can shift to its real purpose – its relationship with its marketplace and the best, most efficient way to deliver the brand promise. This is what a brand model is all about and it’s why I believe brand development is the essential pre-requisite to successful transformation. If transformation is about building an organisation that’s capable of delivering a promise, which in turn is a response to a defined demand, how else would you set about it other than to first identify what that promise should be? Everything else, including products and service is transient, disposable. It has to be to remain, in touch and relevant in a world that’s changing minute by minute.
Once you get to that point, its easy to see why the traditional business planning exercise is redundant. These days you can’t write a prescriptive three-year plan, or even a one-year plan and expect to stick to it, everything is changing too quickly. This realisation drives us toward a far looser model, with a less-specific and moveable objective that facilitates a short-term approach to transformation.
This short-term approach progresses in a succession of short sprints in the direction of the objective, at the end of each of which the next sprint is planned and the need to fine-tune the objective assessed. It’s this apparent absence of structure that unnerves a lot of senior executives, resulting in unnecessary re-discussion, slowed progress, parts of projects being re-hashed, efficiency becoming marred, costs inflated and opportunities missed. Ultimately this will only result in the business being overtaken by disrupters and going bust.
Traditional leaders and managers don’t only find themselves at odds with the transformation process. The resulting business environment seems equally unstructured to some, because transformation is not a switch from one routine process to another, but from order to a state of constant change. This introduces the need for a different approach to leadership and management that Ronald Heifetz at Harvard refers to as “adaptive management”.
Sadly, it’s not something widely taught in colleges and it is generally beaten out of kids in most secondary education systems, but it is essential for those involved in the management of organisations in the digital economy, where unique challenges requiring bespoke solutions are encountered minute by minute. Adaptive management focuses on solving problems rather than applying the band-aid, best fit, cookie-cutter responses traditional managers come equipped with.
However, we are fortunate. Mankind is inherently good at problem solving and once we clear our heads of the clutter that’s been programmed into us over the decades, it is possible to unleash the adaptive manager in any of us.
In summary therefore, transformation is probably as much a psychological as physical process. It is a switch from apparent order to a state of constant change that requires a different approach to management, of both the change process and the resultant environment. Most of all it requires focus. The focus that is facilitated by a good brand model, arriving at which is itself cathartic, flushing out irrelevant legacy to replace it with the new, agile thinking that will give any business the best chance of success in the digital economy.
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