Every business transformed itself during the Covid-19 pandemic. Some made operational adjustments, moving to remote working or new shift arrangements to keep their staff safe. Others rethought their business model, pivoting to e-commerce as physical sales outlets closed. Now, however, as the economy recovers from crisis, the rationale for transformation is shifting—change is no longer defensive but an opportunity to reposition for new growth.
Senior leaders recognise that opportunity and are rethinking their priorities accordingly. In recent research by IBM, 87% of executives say they are now focused on increased agility, up from below 40% in 2018; meanwhile 62% cite the need for digital transformation, up from below 20%.
How, though, to drive change most effectively throughout the organisation? The short answer is that transformation must start from the top. Leadership sets the tone, and consistency, visibility and regularity are crucial. Transformational leaders paint a coherent picture—they take the time to debate what the organisation will look like, in terms of its value proposition and the characteristics required to deliver it, and then they articulate that vision at every opportunity.
Make the commitment
The starting point for any business transformation has to be recognition of the need to make a step-change. In truth, most businesses are evolving on a continuous basis—if your organisation isn’t, your competitors certainly are—but there are times when something more radical is required. Transformation does not have to mean a complete change of direction, but it should be a process that is more fundamental than a tweak to the status quo.
There are any number of potential triggers for committing to transformation. It may be that an external event has forced your hand—Brexit or Covid-19 are obvious examples, but other possibilities might include a disruptive new entrant to your industry, or the emergence of a new technology.
Alternatively, the need for transformation may come from within—the loss of a key individual or team, perhaps, or a significant customer change, for better or worse. Equally, business leaders sometimes face pressure to change from shareholders—a new investor, for example, or an existing investor working towards an exit.
Whatever the trigger for a review of the business, it is important to ground the conversation in hard facts. What do your organisation’s key metrics—financial performance and market share, for example—look like today, and how does that compare to the past? What does the future look like in the absence of any change of direction?
Doing this work enables you to build a case for change, and to begin the conversation about what that change may look like. Spend time talking to key stakeholders about their ideas and ambitions for business as you begin to frame your objectives. Take soundings from middle management too—the idea is to make people feel part of the transformation, rather than imposing change on them.
The aim for leaders should be to create a vision of what the business will look like in the future. Think carefully about how you frame that vision. For example, it doesn’t usually make sense to think in terms of numerical metrics; these should be the impact of your transformation, rather than the vision itself. Instead, look for something more strategic, though still tangible—to be the market leader in your product category, say, or to be world renowned for your customer service.
With a vision in place, you can begin to think about how to get there. What will it take to achieve your goals and who will drive that process? Gap analysis, for example, can help you understand where you are lacking key competencies and resources. Your aim should be to get to a point where you feel comfortable standing in front of the business with clear objectives and a plan for achieving them.
Lead the change
Boards that are committed to transformation simply can’t afford to do anything other than lead from the front. The key is to be clear about what the leaders want the organisation to become and why. This is an opportunity to make a positive case for change that excites and inspires colleagues. Even if you feel transformation is being forced upon you, it is still possible to set out why the organisation is going to change for the better.
Take every opportunity to share your vision. Repetition will hammer home the message that the business is serious about transformation and ensure that everyone in the organisation understands what is expected. Equally, make sure you are consistent in what you say—particularly where different members of the board are charged to articulate the narrative. People should understand what transformation means to them, and the messaging should not change.
Naturally, you will want to take as many people with you as possible. Engaging regularly and widely will increase your chances of doing that. And there are lots of different ways to communicate. Large-scale town halls that provide an opportunity for staff to question you may be useful, but so too may smaller briefings. Don’t overlook staff working remotely or in other locations—video conferencing offers a means to reach out. It may also make sense to create content setting out your plans, whether that’s written material or something more dynamic.
Your middle management team will be a powerful resource, so bring them into the conversation at an early stage. Chances are that they will be responsible for actually implementing many of your changes, but they can also act as champions for transformation. Plus they will be a fruitful source of ideas, as well as a conduit for potentially useful suggestions from the rest of the workforce.
In the end, not every member of the workforce will buy into your vision. In this case, it is important not to compromise. Invite people to come on the journey, but make it clear that with or without them, this is where the organisation is headed.
Manage and sustain your transformation
Successful transformation requires high-quality project management. This is an exercise in process and governance, as well as in innovation and reinvention. Decide who will manage key aspects of the transformation and set clear guidelines on roles and responsibilities from the start. Agree timelines for change and conduct regular reviews against intermediate milestones. The key is to hold everyone in the organisation—including the CEO and fellow directors—accountable for what they have committed to do.
Equally, this is not just another business project, but something more fundamental. Give people the time they need to focus on transformation. You may even choose to move staff into full-time roles related to the work required. Indeed, this could be a golden opportunity to give your most able colleagues new responsibilities.
Programme fatigue is one danger in any transformation process. And while ebbs and flows in the speed of change are inevitable, it is important to guard against getting bogged down. Those intermediate targets can be useful here, giving colleagues something to sprint towards, before taking a breath and then going again.
There is also the question of the finish line to consider. What will the organisation need to achieve for you to consider that the process of transformation is over? In practice, there may be no grand firework moment, but it is important to be clear that transformation is not a never-ending process. Certainly, the business will want to continue to adapt, but there must be a point at which it slips back into business-as-usual, including continuous improvement.
That should bring you full circle. Organisations that know what success looks like at the start of the transformation process are obviously in a stronger position to decide when they have got there. Leaders with a clear vision know when to bring the curtain up on transformation—and when to bring it down at the end of a show. Be ready to take a bow and to prepare for the next performance.
Alan Frost leads the business consulting team at professional services firm Mazars.