By: Caitland Conely
“Disruption” is a word that gets a lot of traction in media, especially as companies like Airbnb, Uber, Netflix, and others reinvented their business models to accommodate new technologies, changing supply chains, and the impact of social media on consumer decision-making.
In a corporate moment where strategic decisions like “pivot to video” hit every news outlet accompanied with talk of layoffs, business transformation has become a buzzword that gives people pause.
Sometimes key decisions are made without considering the core revenue model of the company operating models, distribution channels, or new products pipeline. Successful transformation is impossible without dissecting the entire business model in the process.
What Is Business Transformation?
Usually, when a business environment discovers it needs to change, it’s reacting to a larger consumer or societal shift. Sometimes they’re too late—think Blockbuster once it realized Netflix was eliminating their reason to exist.
Think of the resurgence of vinyl once music streaming turned fully digital. Think of Amazon starting as an online bookstore before transforming into the largest e-commerce platform in the world.
Business transformation is almost always driven by consumer demand, and when they’re successful, they sometimes rewrite the entire path to purchase. However, there are different types of business transformation that don’t automatically equal industry disruption.
Types of Business Transformation
There are a myriad of ways to transform your business or operating models, whether that’s a cultural shift, new technology implementation, or even the act of a merger or acquisition can all qualify as an organizational transformation.
- Culture transformation is a key type of business transformation. For example, if you’re a company that newly shifted to a partnership model to earn revenue, you have to establish strong partnerships driven by clearly-stated business processes that play into that goal.
You may be a fully remote company that realizes it needs a “home office” to effectively scale up. Culture transformation can even extend to implementing new programs to strengthen your employee value proposition, whether that’s more competitive compensation packages or retooled benefit offerings.
- Technology transformation is pretty straightforward. When computers burst onto the scene, companies who used pen and paper or typewriters had to completely change their technologies. From a more modern POV, this could be as simple as updating to the latest version of a software company-wide, or as in-depth as completing a full-scale audit to migrate platforms or sunset technologies.
- Operational transformation gets to the heart of your operations, and is also referred to as “core transformation.” This is best compared to the concept of disruption, because core transformation can totally alter your business model or the industry standard. These are your Amazons and Netflixes, and other companies will adapt their operating models to fit into these core transformations.
It’s easy to stay stagnant in your operations, particularly if they’re driving revenue well enough to sustain the company. But operational transformation is not necessarily when you don’t have a plan for growth. Successful business transformation predicts trends and acts in advance, not simply reacting to the tidal shift.
- Strategic business transformation is an important one because it’s usually tied to a change in the business model or the introduction of new products. For example, in the early 20th century before Yamaha became one of the most successful motorcycle companies in the world, they created pianos. Another example of strategic business transformation is Apple creating the iPod, the iPhone, and so on in response to the wild success of their computer products.
One key element to successful strategy transformation is employee communication and tying meaning and intention into everything your organization rolls out.
Effective Change Management – The Key to Successful Transformations
Change is going to come, and with it, you’ll need strong management. Not just in the conventional manager-employee relationships, but from the top down. You may need to create performance improvement plans or strategic goal-setting that will trickle into every day operations.
When you branch into new business, whether that’s extending your product line or changing distribution, managing change effectively means you provide employees with time to wrap their head around organizational transformation.
Surprising your workforce with a new, fancy tool or technology can make them uncertain of their worth or job security, especially in an era of artificial intelligence (AI) and automation.
Another piece of change management that you need to plan for in your transformation roadmap is project management. Not only will you need to develop roles that drive these huge structural changes, you’ll need software, systems, and processes to standardize transformation.
Which business leaders are your change-makers? Who champions your business strategy and owns up to the five and ten-year growth plan that competitors will call “too ambitious”? You need these superstars in your organization to encourage and motivate the transformation process.
The incredible thing about transformation efforts is they affect organizations of all shapes and sizes, from global enterprise giants who need to up their customer satisfaction to small businesses struggling to identify their competitive advantage.
Are You Ready for Digital Business Transformation?
True business transformation requires fundamental changes throughout an entire organization. It’s a process, a ripple effect that promises continuous improvement of your company.
To be a true thought-leader in the space of digital transformation, you have to ask big questions, like: What’s the current state of your organization’s transformation? Are you full-speed ahead, or getting caught on small speed bumps? If customer demand is falling, can you measure and react quickly?
Buy-in throughout the organization is a critical piece here. If the executive and C-suite doubt the new opportunities and value business transformation can bring your company, you’ll have a difficult time driving organizational change.
Transformation as we know it today is in flux. The bottom lines and definitions are ever-changing and adapting to new technologies.
At GuideSpark our change communications solution, GuideSpark Communicate Cloud™ helps companies drive organizational change through effective communications with employees, and deliver on strategic initiatives.
Is your organization in the midst of massive transformation, or considering a new transformation strategy? Let’s talk.