The term “Business Transformation” is typically used to describe how companies adapt to new market conditions and stay competitive. In practice, however, this transformation often means short term project plans that tweak current procedures instead of creating new innovations. According to internal research, 84% of firms fall into this type of project trap.
To make your number in 2020 and beyond, you need to stop looking at transformation as a “project” and start looking at it as a “program.” This begins by distinguishing how a business shifts from needing a transformation to sustaining continuous improvement. Then comes the matter of establishing fundamental design principles, and structuring decision making around collaboration and executive alignment. If you can break away from the herd by adopting a programmatic approach to business improvement, your transformation will go from siloed and project-based, to cross-functional and innovative.
Transformation vs. Continuous Improvement
Transformation is somewhat of a misnomer for what successful companies do. Evolution is a more accurate description since market leaders are always changing to adapt to the pressures of the market. In a business sense, the only reason a company would have to “transform” is because they failed to evolve and are now behind their competitors.
In business, as in sports, once you’re behind, it takes double the effort just to level the playing field. This results in companies taking on too many initiatives, failing to prioritize opportunities, and failing to consider the capability or capacity of their team. Conversely, market leaders (who face the same market pressures and condensed timelines) are consistently looking for ways to stay ahead of their competition and cater to their customer base. This is where a program that can evolve with your company outpaces a tired, one-dimensional operating plan.
For market-leading companies, this process begins with annual plans based on corporate strategy. In creating the annual plan, foundational design principles are laid out to guide the allocation of time and resources for the coming year. These design principles ensure that upcoming initiatives are in line with long term goals and address the most impactful areas of the business. For these design principles to be effective, it’s crucial that you as a CEO are aware of the following factors in your industry:
- Market – The historical performance and future trends facing your industry
- Competition – Your biggest threats to market share and customer base
- Customers – The revenue base of your company; alignment of their problems and your solutions is top priority
Taking into account your historical and forward-looking understanding of these (and other industry-specific) factors will help you design a program that will keep your company competitive. Self-aware companies make better decisions about program development. You will be able to look at the company holistically and take steps to coordinate a roll-out of cross-functional initiatives. Once these design principles are in place, you can then rally the rest of the organization around your transformation program.
Collaboration and Executive Alignment
Once the design is in place, then comes the heavy lifting of structuring a plan and gaining buy-in from the executive team. No changes happen in a vacuum, and if you throw an annual plan over the wall to the front-line workers without support from team leadership, it will undoubtedly fail. This may sound obvious, but according to our research, executive misalignment is growing, not shrinking.
Stacking hands is the best way to ensure that your transformation program has staying power. Input from the CFO, CRO, CMO, CPO, and Customer Success will drive adoption throughout the rest of the company and will help guide a structured decision-making process. It will also drive consensus on what initiatives should be prioritized as the transformation program is designed since each leader will have a unique perspective on their vertical. While difficult, aligning the executive team on the core tenets of a programmatic framework for continuous improvement will lead to short-term wins and long-term results.
Your 2020 Transformation Program Can Succeed
Approaching business challenges in a new way may seem daunting. And shifting from a conventional wisdom “project” approach to an emerging best practice “program” approach can be even more intimidating. But in SBI’s yearly research guide, you will be given a step by step guide on how to implement these best practices in your business.
SBI has collected thousands of data points and performed an in-depth analysis that outlines what market-leading CEOs do to make their transformation projects a success. The full summary of this research can be found in SBI’s 13th annual research report, “Making Your Number in 2020”.
So, instead of settling for a small incremental bump in revenue, take the opportunity to transform your business for the long term. Embracing continuous improvement, establishing fundamental design principles, and making collaborative, aligned decisions for your company will ensure growth and success for your company for years to come.
To learn how you stack up against the top 16% of companies, take our Revenue Growth Diagnostic, and schedule a call with an SBI representative today.