It’s amazing how quickly the traditional business model has become the ‘vintage’ business model. As we are all aware, the way companies have transitioned – or not – has been make or break.
The print media industry experienced a profound transformation when digital and mobile media challenges to their traditional business model emerged. Some companies survived, others struggled, and others found that merger or closure was their only option. Retail, financial services, and electronics are a few of the other industries that have seen their traditional ways of doing business radically change as the Digital Transformation has quickly led to the unyielding demand for their business transformation.
Business transformation is the opportunity to execute a bold vision that goes beyond incremental change and provides breakthrough value to your company and your customers. External factors are most often the triggers for a transformation (technology; economics; regulatory; competition; etc.) however the reasons these efforts don’t meet expectations are often internal.
As the wise man once said: “We have met the enemy and he is us”.
93% of the 900 companies surveyed by Forbes said that they had either started or were about to start a business transformation. However, over 50% of these same companies were not satisfied with the progress and/or results of their efforts. So the question appears not to be “do we?” but “how do we?”.
From our experience, there are four factors that are the most critical to the success of your business transformation:
The obvious axiom is that leaders must “walk the walk”. They do this most effectively by developing a vision and a strategy that clearly integrates the success of your transformational initiatives to the success of your company; by investing in the new systems, tools, and methodologies to achieve it; and by empowering and holding accountable their people.
Digital transformation requires that more knowledge and information is gathered, shared, and acted on than in the past. Decisions must be based on actual information, not assumptions, and be analyzed in more granularity than ever before. The successful implementation of a corporate ERP system is a critical building-block to unleashing the power of this information.
This is less glamorous than other parts of the transformation (web site development; creative use of social media; implementing new marketing tools) but without the ability for all the “back of the store” functionality to work flawlessly the customer-facing work can quickly turn into unsatisfied customers and negative brand awareness.
If, like many good companies, you do the following:
- promote your best people every 2 to 3 years
- have metrics that focus on total sales and market share growth, and
- focus strategic investments on plant capacity and technology
Then your organization structure will be in conflict with transformational success.
Instead, evaluate the success factors and timing used to develop and retain your best people in the context of their contributions to achieving the longer-term transformative goals. Organize around the customer and the transformational efforts, not internal functions. Finally, establish metrics that focus on growth in new ways and at more granular levels.
By following these 4 factors in your business transformation, you will position your company for a much more successful future. While the traditional business models kept companies strong for a long time, it’s time to put this model on the shelf and move forward with a business model to help you charge forward.