TagBusiness Transformation

How to Transform Your Business in Times of Continuous Change

In times of continuous change, there are both winners and losers. Some company’s grow to become highly performing and competitive enterprises while others develop into fighters, fighting for survival on a daily basis.

Today’s business environment is constantly evolving, with many factors both internal and external to the organization affecting the achievement of its stated objectives including the level of its competitiveness compared to competitors.

Some of the contributing factors include prolonged geopolitical and economic uncertainty, unresolved trade issues, rapid advancement in technological innovation, increased competition from new market participants, and fickle customers with constantly evolving needs.

As a result, the business has to be adaptive if it is to grow and succeed in such a disruptive environment.

When everything is going well, it’s easy to focus more attention on the good stories and less on what could go wrong. The blue overshadows the red, and this is a major problem in some companies.

These companies allow their past success stories such as successful product launches, increased market share, core technologies, and other organizational capabilities to blind their ability to view the future with a different pair of eyes.

Culturally, they are locked into the old way of working, bound by legacy systems and processes. Little time is spent on reviewing and evaluating the existing business model to establish whether it is still viable or not in these disruptive times.

On the contrary, transformational companies are not satisfied with the status quo. They are appreciative of the fact that past success is not a guarantee of future success.

Just because you are doing well today doesn’t not mean you’re going to enjoy everlasting success.

Business history pages are littered with doom and gloom stories about companies that have collapsed due to lack of innovation and unwillingness to evolve with the market.

Examples of such companies include the technology company Xerox, the retailer JC Penney, the social networking company MySpace, the department store Sears, the high tech company Polaroid, the bookstore Borders, and Circuit City the consumer electronics company.

What do all these companies have in common? At some point in time, they were all mighty industry titans, too big to fail and led by great, smart people.

However, in the midst of their successes they failed to adapt to changing customer needs, new technologies, competition and business models.

Even though these companies had built their businesses from the ground to the top of their respective industries, their death knell was the self belief that no other company was capable of doing better than what they were already doing and unseat them at the top.

Unfortunately, because of this fallacious way of thinking and ignorance they all paid a hefty price.

To avoid having your company join this list of colossal business failures:

  • Don’t get comfortable doing the right thing for too long. Continuously look for opportunities ahead and remember that today’s success can obscure tomorrow’s possible failures.
  • Regularly ask yourselves if what you’re doing and how you’re doing it is enough. It’s about making productive use of the resources available to you to improve your company’s performance and competitiveness.
  • Don’t dwell too much on the past. It’s important to know what has happened, but more importantly you need to understand why it has happened and how your company would perform in the future.
  • Commit sufficient time to analyzing new technologies, industry trends and competitors. Reviewing financials provides a rearview mirror of business performance, and you need forward looking indicators to understand your customers, competitors and the competitive status of your business (in terms of products, core technologies, market share, talent, culture)
  • Stay open minded. As highlighted above, when a company has been successful for too long, very little time is spent on thinking through alternative downside scenarios. It’s so easy to focus on the good news, spurn bad news and avoid discussing negatives. Questions such as “Why haven’t we done it before, What if this doesn’t work? What would we do then? What might make this not work?” are reluctantly answered. As a result, what begins as minor issues eventually develop into major issues. Don’t be a victim of own success to such an extent that you become ignorant of change.

Transforming a business into a highly performing and competitive enterprise is a journey characterized by ups and downs. Consider every challenge, every problem and every piece of bad news as an opportunity to learn and improve.

Talking about Digital Transformation

These days I’m hearing quite a number of business leaders talk about digitization, going digital or digital transformation.

Regardless of which term you’re most comfortable with, it’s a good sign that leaders are seriously considering taking advantage of the power of modern technologies to transform their businesses.

An investment in IT is no longer considered a cost to the business. Rather, in highly performing organizations, embracing emerging digital technologies is considered an enabler of business performance.

In these organizations, business leaders are cognizant of the conditions in which technology supports the overall business strategy as well as those in which it helps shape the business strategy itself.

It’s no secret that we are in the digital era. Digital technologies are everywhere. Just think of the significant increase in the pervasiveness and the power of digital technologies in new domains such as cloud computing, robotics, wearable devices, 3D printing, drones, machine learning, blockchain, virtual reality etc.

These new technologies are influencing not only the way humans live and work, but also how we learn, play, innovate, transact and govern.

Your existing strategies will not carry you into the future

Although I’m not able to predict with certainty what the business landscape will look like in the next 5 or 10 years, I strongly believe that organizations that will survive and succeed during this period will be defined by their ability to master and take advantage of the power of these emerging technologies to deliver value to customers.

Traditional, tried-and-tested ideas that propelled your business to where you’re today are no guarantee they will continually move you forward and ahead of your industry incumbents in this digital economy.

Let’s look at Amazon as an example. The global ecommerce retailer started off as an online bookstore and along the way embraced emerging technologies to become a leader in cloud computing services, media and artificial intelligence.

The company did not become successful because of its size. Rather, taking advantage of digital technologies helped it to become a powerful global brand.

Just because your current business model is working does not necessarily mean you should allow it to run its course. It’s critical to always question, refine and enhance your competencies and strategy otherwise you risk becoming irrelevant and falling victim of some successful, but now outdated, past practices.

It’s not all about a set of technologies

Simply overlaying technology, however powerful, on your existing business infrastructure does not work. A change in structures, systems, processes, skills and network relationships is paramount.

Neither does digital transformation entail simple automation of traditional, routine and repetitive processes. It’s also about embracing new rules of engagement and continually experimenting with new approaches and adapting them to suit your performance objectives.

For instance, embracing advanced data and analytics tools to learn about and better understand your customers and solve their problems, challenge your current business model and ultimately alter the sources of your revenues and profits.

Shift your focus from thinking about how digital technologies support your current business to exploring how they could also shape your future strategy and business models. In other words, think of innovative ways these digital technologies can help you create and capture business value.

Further, effective decisions on digital transformation are not hype-driven.

Different companies are at different stages of the transformation journey, experimenting with different technologies to create new capabilities, establish new relationships and identify differentiated drivers of value.

Thus, instead of just mimicking what other players in your industry are doing, acknowledge that there is no one-size-fits-all solution.

Consider how the different forms and functionality provided by digital technologies could influence your company’s strategic actions and provide better value for customers of your products and services.

Don’t go it alone

Success in today’s digital economy depends on your ability to build a network of relationships and co-create value with other digital players. As an example, think of how traditional banks are partnering with fintech and regtech entrepreneurs to fundamentally enhance, transform and disrupt their current business models.

These tech entrepreneurs are ambitious, with bold views on how they can disrupt and reorder the traditional banking model. By taking advantage of different digital technologies, they have challenged and disrupted traditional methods of delivering financial services.

So depending on your industry setting, you need to recognize the role of such specialized entrepreneurs in solving your fundamental business problems in new and effective ways.

As digital technologies increasingly pervade the very fabric of our society and business, are you keeping pace with the change or you strongly believe in your established playbooks to continually help you survive and succeed?

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