7-Step Guide to Effective Business Transformation
Published on : Tuesday 02-11-2021
Effective Business Transformation translates strategy into action through collaboration.
The purpose of this 7-step approach is to provide a guide or outline for your business transformation initiative. It is not intended to be a detailed instructional manual. There will be far too many moving parts in any real transformation to do justice to them all here. Nor do we suggest that these are “the” steps, instead we merely suggest that these steps provide a logical flow, that based on our own experience, as well as that of our customers, will increase your chances of delivering the expected results from your transformation efforts in a successful manner.
As you go through the descriptions of the steps, you will note that while suggestions are made, the focus is on the outcomes. Often when considering a framework or guide, emphasis is placed on the activity rather than the outcome. This failure to focus on outcome, and there- fore the value, is what has proved the undoing of many planning or analysis-based projects and programmes.
We recommend that for each step you consider the suggested outcomes, review the suggested actions, and then ask what mechanisms you already have which could be repurposed or reinvigorated to undertake this. However, as you do so, don’t risk leaving all those pieces in separate tools seen only by the creators. It is no accident that almost all the steps have a strong focus on collaborative efforts – leveraging the wisdom of the crowd. We, like many of you, know from bitter experience that resistance to change and apathy comes from failing to actively involve all affected people. As a result, with these steps we purposely focus on engaging broadly within your organisation.
It is often surprising when considering transformations in banking and the travel industries in particular, that strategists and marketing teams rush to go to external reviewers or customer segments when both industries already have the resources internally to glean valuable insights – their employees. Here is the “Aha!” moment – your employees probably use the services and products that you seek insight into, and they can also probably tell you a lot about who does things better than you. They probably have many ideas about how you can change to meet the competition. We are not suggesting that you never need to look outside, just suggesting that by harnessing the power of your whole organisations, you may find you know more collectively than you think.
Surveys in the United States suggest that over 68% of employees are actively disengaged, with the number a whopping 87% disengaged worldwide – leading to low overall productivity.
Practices such as those mentioned above and discussed in the 7 Steps below will help you to reduce that number in your own organisation. You could even ask yourself what difference it might make to your top and bottom line if just 10% more of those employees became fully engaged, and how much easier it would be to transform when the employees were the ones providing suggestions based on their actual experiences.
So as you journey through the 7 Steps, don’t ask “isn’t this the same as” but instead, think about how it is different from what you already do. For it is in identifying differences we learn, and once we learn we can transform.
Envision & Motivate
Achieving a goal requires two things – a vision of what the target is, and plenty of drive to get there. Before your organisation starts the work of transformation, people need to know what they are aiming at, what is required of them, and crucially – why. To bring everyone to the table, a range of strategy tools can be used to support the development of a transformation case and identify opportunities, threats, and risks. That is only a part of the task however. To create and communicate a holistic picture of why transformation is necessary, and generate participation and commitment across the org chart, you will need to carefully consider how to appropriately include different groups of stakeholders, with different informational needs from the beginning. We are all familiar with the concept of ‘death by power-point’, and live in an increasingly visual world, with the deliverables produced by the step likely including customer journey maps and capability maps among others.
Fortunately, we are no longer restricted to in-person meetings and long email chains to accomplish this – solutions that create the space for sharing and collaboration are already available and able to speed the process of discussion, while simultaneously benefiting from the wide experience of the entire organisation.
The objective of this step is a combination of designing and championing a compelling vision of the future, while at the same time highlighting a burning platform to create the drive to action.
Document & Prioritise
Creating clear, goal-oriented target models is essential to ensuring everyone is clear on the direction and purpose of the work. Many an initiative has been sunk by a lack of alignment between key stakeholders or unvalidated assumptions. In this step you will produce the first of many versions of the target state model. We say many versions because as you experiment with ideas and gather feedback, the models will likewise evolve as they make their way to- wards the final agreed-upon state. Creating the future state model/s first ensures time is not wasted capturing processes that will not be required in the transformed model.
Collaboration during the modelling/documentation process is again key here – creating these models is not the work of one person, and requires input and agreement from stakeholders across the business to effectively discuss and define the details and flows of work and value, within and between teams and functions. It is a creative, collaborative process.
Nurturing shared understanding at this step is crucial for two reasons. These are: ensuring all voices and situations are considered (remember the people doing the work know best), and nurturing a sense of involvement to engage people and drive the program forward. This step should not be completed in the management vaulted room, but instead encourage participation and two-way communication of ideas and insights.
Creation of these models also enables you to start to assess your key priorities and begin to form a plan of action for how the transformation will be approached. The output of this step is not a model set in stone, but instead an expression of general, high-level priorities and ideas.
Analyse & Define
This is the first step towards tangible action; getting a clear idea of how the future state will be achieved. Now is the time to undertake fit/gap analysis activities to identify the gaps between current and future states, and what is required to close the gaps.
Identifying and defining how to bridge the gaps may also mean defining entirely new capabilities and customer journeys to aid comprehension and to act as rallying points for more detailed business and process changes to come. Using customer journey maps to explicitly map out and design what is required to optimise customer goal achievement, as well as the related business goals, ensures the transformed system will be lean, customer focused, and pragmatic.
As you begin to link strategy to action by mapping processes and systems to customer journey steps, gaining an understanding of any variances in system processes that were identified in Step 2 is vital. These variances may go away in your suggested new models, but they may also sur- face additional insights that need to be addressed.
Seeking out qualitative input in the form of feedback from your people related to the current state, as well as quantitative data will provide the ‘whys’, leading to the ‘hows’ to be manifested in the target model and plan (and budget). Use both to validate planned activities. Most organisations are already sitting on a wealth of data that could be used for this analysis. Actually utilising the data is another story. It is well worth investigating ways to optimise the data collected in your various business systems by pulling it together to reveal your organisation’s story. This needn’t involve a huge investment in time by IT either – process mining technology already exists to help you strike gold, and speed and amplify this step.
Continue to iterate on plans with key stakeholders until the gaps are closed. You might be surprised at what you find when you delve below the surface of the organisation. Seize on opportunities and incorporate them into your model and banish ‘that’s how we have always done it’ thinking.
Share & Refine
It is almost always cheaper to fix a model than an implemented process or system. The theme of this step is “measure twice, cut once”, i.e., validate widely and refine your model before you implement.
At this stage, the ideas, proposals, and plans should be shared widely. Invite comments from a broad audience and more importantly, be willing to make changes and refine your models and plans based on feedback. This will be much easier if you are using a modelling tool with built in commentary, sharing, and versioning functionality. Remember those disengaged people often feel that their voices are not heard, despite the fact that organisations have a whole host of feedback mechanisms. The medium matters.
People often don’t feel that change occurs as a result of feedback, so while you can’t listen to or change everything, the more you communicate that changes occurred because employees suggested them (you could even reward them if this is a big change in your organisation), the more engaged, excited, and invested people will become in the transformation. Creating a transparent, open loop with feedback being acknowledged, discussed, and factored into the model shows employees that their input is valued, and adding value.
Although it may seem messy, drawn out, or a waste of time – this is where the magical ingredients that will magnify your transformation are found. Balance any time pressure in this step with whether you would have the time and budget to redo a failed implementation over again.
Develop & Implement
Having completed the visioning, analysis, and validation, it’s time to implement the new processes and work practices. This stage may also be used to start generating requirements for any potential ERP transformation.
Many business-side stakeholders and leaders may have had negative experiences with IT implementations in the past. By adopting the business-driven approach to transformation so far suggested, many of the traditional IT issues that can emerge during initiatives of this type, caused by lack of alignment on priorities and underlying business needs, can disappear. Again, building in practices supporting transparency and bi-directional communication flow are key to success with this step. Breaking down traditional organisational siloes in this way means close collaboration is possible, with everyone pulling in the same direction.
Requirements are a frequent point of conflict in (failed) transformation initiatives. These can easily be derived from journeys and processes created during Steps 1-4 of this guide, rather than traditional requirements analysis. Generating requirements in this way directly connects IT to how business and customer goals are achieved. It also makes it easier to test systems and under- stand what is inside and outside of scope for more effective outcomes.
Additionally, when implementing processes and procedures, don’t assume that everything needs to be done by IT or needs a rigorous system. There are technology solutions available now that give business users the agency needed to automate their own work – in a way that fits their particular situation and without significant IT investment. Enabling the team with the deepest understanding of how particular work is done to create their own workflows dramatically in- creases the speed and efficacy with which work can be completed, and the agility of the organisation overall.
Having been involved in the earlier steps, it is natural that these same people will wish to take ownership of seeing the vision come to life with their teams, which nurturing close business/IT alignment, collaboration, and smart technology choices can support.
Educate & Communicate
Benefits will only be realised when the organisation as a whole starts to adapt to the new behaviours. We use the term “behaviours” as a reminder that often, although executing a new process, the customer or buyer may in fact be interacting with a staff member via the phone or in-person, the process will actually manifest through the behaviour of employees. This is especially important in industries where you have frequent buyers, they are likely to have been used to things operating a certain way and may not always appreciate the difference. So how your staff interacts with them in those “Moments of Truth” will decide your ultimate success.
The second part of this step is all about communication. Even with the best intentions in the world, it is possible that everyone may not have been fully involved so far. But, as you go live, they will need to know where to find the information they need and will need to be educated not just on the new practices, but also on the reasons behind it.
One thing we have learned when implementing new practices is that you can’t over communicate. In fact, before you even start the communication we suggest that you create a detailed communication plan that looks at the message to convey, the cadence to be used, and the different mediums it will be distributed through. Email is a very poor vehicle in most organisations, often people just glance and file.
For regulated industries this is especially important, as often regulators will not accept that you simply told someone once how it should be done.
Benefits will only be realised when the whole organisation begins to adapt to the new ways.
Measure & Improve
Success is only success when the transformation starts to yield the planned for results. However, often between strategy and execution things change, so we need to measure the outcomes and continuously improve in order to ensure success. Of course whenever new ways of working or new systems are put in place, results often initially go down. Don’t confuse initial negative results with failure. Your people and systems might have taken years to get to the old levels of productivity, so give them time to get used to the new ways of working, and tread carefully before making further wholesale changes. Instead, make iterative small changes, based on feedback from those undertaking the work. When possible it can be good to track variance or compliance by comparing the “as-implemented” process with the “as-intended” process, this often provides surprising insights that require prompt action. This is why setting up the conditions and mechanisms to take full advantage of the data the organisation already produces is essential to support ongoing progress, and prevent slipping back into old habits.
You don’t need to create this from scratch for your organisation, solutions now exist which allow continuous monitoring of actual performance against planned, and include simple, highly visual dashboards so the insights are available and accessible. Additionally, ensuring the lines of communication between those carrying out the work, and those responsible for designing the business structure remain open and utilised as in the earlier steps likewise relies on continuing to show that the feedback is taken seriously and factored into the models where appropriate.
These steps are of course not the definitive or final word on how to undertake an organisational transformation. They are however based on expert experience and lessons learned over the course of decades of business transformations, both good and bad. They are intended to provide you with the mind-set and insights to steer your organisation through the complex, often messy, but ultimately rewarding process of transformation. We encourage you to adapt and augment the steps to match your organisational context, while taking note of the underlying themes of communication, inclusion, collaboration, and smart monitoring.
Effectively translating strategy into action is the cornerstone of transformation, we hope this guide will support you in creating positive behaviours and mitigating threats you will encounter as your organisation embarks on this journey by providing insights from others who have gone before.
Article courtesy: Signavio