What is Business Transformation and Why Should You Care About It?
As businesses consider significant and major change initiatives, we ask, what is business transformation and what will undertaking it mean for your business?
First, what is Business Transformation? Business Transformation is a strategy of Change Management that is undertaken by organisations following serious challenges. If you want to get better in some way – stand out amongst your competitors, and do things more effectively, you will need some business transformation initiatives.
Business Transformation can apply to any and all of, systems, IT and Tech, operations, processes, people, tools and platforms and operating models to position your organisation to implement its business strategies and attain its competitive and brand positioning vision.
What will it mean for your business? The need for business transformation rarely arises in benign environments or circumstances. There is usually a driver, which may be internal and external but will generally be because the organisation needs to be better in some way and needs to raise its internal capability to do that. Common exigencies are regulatory, legal, technological or those brought on by competitive threats and mergers and acquisitions. There are also issues that arise from a lack of marketing, promoting your business and actually having a brand to promote and engage with your business’s prospective clients. Business transformation can be anything that allows you to stay in contact with and influence your clients and stakeholders.
Why should you care about business Transformation? Well, if you want to excite and retain the people who are the best fit for your organisation and deploy a strategy that will work for your business, specifically, you must consider what large scale change is required but to compete effectively and in a way that positions your brand adequately you have to consider business transformation. The transformation is required because, in order to reach the goals that will get your business where you want it to, you’ll need to change your processes, your IT, your ways of working and even mindsets, though this latter sits squarely in the bailiwick of change management with regard to taking people along with you on the change journey and making change stick.
Business transformation types
Many illustrious bodies have attempted to answer the question of what transformation and it is widely accepted that there are three broad types of Business Transformation:
- Operational Transformation,
- Core Transformation
- Strategic Transformation
These do not refer to the drivers of change but rather to what is being changed and the level at which this transformation is aimed. It can give clues as to what the short term drivers might be as well as whether the objectives are shorter or longer-term in nature. A business transformation initiative is like dominoes. I t can set off a chain off other transformations in its wake to match the elevated capacity and capabilities created, not to mention to fill the gaps that are exposed as those changes are made.
Operational Transformation is about fixing up, getting better, upskilling and bringing your operational capabilities up to industry standard to meet obligations and needs on the horizon. Or it could be for taking advantage of technological advances that can add to your business’ prowess or just the ability to meet your obligations and promote your market presence and meet a market shift etc. This might involve business as well as IT change and very often will change modes of working.
Core transformation – Changing, switching out and adopting completely new ways and modes of working. This is core change! People will be affected negatively and this needs to be sensitively and proactively managed. Change management principles around people are so necessary for this type of change.
Strategic – This type of change tends to encapsulate the previous two and is about changing the heart and soul and the guts of the company. They may change their purpose or the way they carry out their vision of who they are in the world.
There is undeniable power in business transformation and it is no longer a luxury but is ever more necessary for small to medium size businesses as the rate of change and advancement in the business world ramp up and is only matched by the ever-increasing expectations of your customers.