Executives and boards should not wait until it’s too late to put themselves through a business transformation process, according to experts.
Transformation has become a key topic of discussion among business leaders since the pandemic and lockdowns, which saw many companies accelerate plans to change their business models and strategic approach.
But panellists on a special webinar hosted by Board Agenda and Diligent, providers of governance solutions, stressed the need for corporate leaders to spot the need for transformation early.
Randall Peterson, professor of organisational behaviour at London Business School, said: “One of the mistakes businesses make is that they wait until business starts going down, which oftentimes is too late.”
Business transformation is the process of shifting a company’s approach to business. It could mean a major restructuring but it could equally imply “nudging” a business in a slightly different direction.
Look around you
Mark Newton-Jones, fellow panellist and currently a non-executive director at Mothercare and Ingka Group, IKEA’s parent company, stressed the need for using a diverse set of indicators to spot the moment for change. This may mean using measures from other industries.
“There are many indicators in your own business but also looking parallel across different sectors,” he says.
However, change is not always easy, especially for the team that must lead.
Kieran Moynihan, a former chief technology officer at IBM and now managing director of advisory firm Board Excellence, said: “One of the difficulties we see in boards and executive teams is complacency.”
He added: “Even though they [directors] have seen radical changes…it takes a lot of courage to say, as a board and as an executive team, that we need to fundamentally change.”
Resistance to changes might even come from unexpected quarters, such as investors.
“Even for exceptionally talented executive teams, it’s a big, big step to go through a true transformation in a business.”