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Transformation is not what it used to be

Nick Ringrose | 03 Mar 2016 | Comments

The nature of change is changing - so we need to take a fresh approach to business transformation within the bounds of company ethos and ethics.

Nothing is constant but change, if Greek philosopher Heraclitus was to be believed. The problem for business is change itself is not constant.

In the past, business environments were more stable. When transformation was necessary it could be plotted in rules set out by authors such as Harvard Business School professor John Kotter. His seminal work, Leading Change, became the blueprint for many a business transformation. But in the 20 years since its publication, change has moved on. Just take a quick look at how barriers between markets have broken down.

Google started with making an internet search engine but before too long, it could be driving your car. Apple has jumped from computers to consumer electronics and even into banking services. Amazon started by selling books to consumers, now it also sells cloud computing to big business.

The same goes for geographies. When Chancellor George Osborne invited Chinese firms to bid for HS2, he merely confirmed what many in the industry already knew: the days of infrastructure built only by national or regional players are long gone.

Finally, businesses are changing from the inside. As a new generation enters the workforce, these digital natives arrive with different expectations. When I started my career, we thought if you kept your head down and worked hard, in a few years you might get somewhere. Younger people now expect things to move faster, they want more flexibility and believe in the work-life balance. They think senior staff fail to exploit social media and miss this opportunity to get their message out. Generation Z does not fit with the well-established, top-down method of transformation, as change consultant and author Anthony Greenfield has pointed out.

If our old tool box for transformation is not fit for the future then the question is what we do about it. For a start, we need to be much better at scanning the competitive environment. Fifteen years ago, you would do an appraisal through SWOT and Porter’s Five Forces, but now you need to think much more laterally to understand what the significant disruptors to your business are going to be.

When you decide what you are going to do, you’ve got to get there faster and in short bursts. It is no good having a grand design if it takes three years to get there. Here we can borrow the more devolved “scrum and sprint” approach from agile software development. But a word of caution. If you also want to execute a top down structural change, the two forces can lead to tension. It is hard to run a scrum and sprint approach in parallel with rigid hierarchical change, but you cannot be so slow that the world has moved on by the time you finish.

We also need a new approach to leadership. If senior management is male, pale and stale then the company can become a victim of digital Darwinism and go the way of the dinosaurs. You need leaders of the future who are more keyed in with new approaches to transformation and who can advise or execute with much more delegation.

But it is important not to throw the baby out with the bath water. The dinosaurs have something we still need. In all this talk of disruption and agility, you have to have governance. If you don’t have some sort of oversight and orderly plan, spending can break budgets, sequencing can go wrong and consistency goes out of the window. Transformation still has to adhere to overall company ethos and ethics.

It’s easy to get wrapped up in the doom and gloom when you look at how established businesses need to change their approach to transformation. Technological and geopolitical forces are driving change at an ever faster rate. If you take a Darwinian view, the future looks stark for those eschewing agility and devolved decision making. But those nifty enough to avoid extinction can expect to find a new world in which they can thrive.

This article also appeared in The Times Raconteur report on Business Transformation, published in March 2016. If you'd like to read the report it can be found here