Why we need a new framework for change and business transformation
Incremental improvement is not enough to win in today’s exponentially disrupted business environment and those who make bold and brave transformative moves will be the clear winners according to Karen Thomas-Bland, founder at Seven, a business transformation consultancy based in London. Whatever an organisation’s start point, whether it’s to go from good to great, undergo a rapid turnaround in performance or emerge out of a distressed situation, it often involves the creation of new and disruptive operating models to reduce cost, grow the top line, extract greater value from data and technology, create new dynamic cultures and deliver customer-centric digital experiences.
The assumptions that supported years of stable, predictable growth are no longer likely to be valid. There are factors that need to change how we approach business transformation and change in the future. In a world of unprecedented disruption and market turbulence, transformation revolves around the need to generate new value, to unlock new opportunities, to drive new growth and to deliver new efficiencies, but in doing this it needs to be purposeful, bold, human and courageous in approach.
Against this backdrop, we believe we need new framework for business transformation that is based around delivering outcomes on five dimensions: profit, people, planet, purpose and prosperity — the 5P framework. As McKinsey notes, only 7% of Fortune 500 CEOs believe their companies should ‘mainly focus on making profits and not be distracted by social goals.’ While shareholder capitalism has catalysed enormous progress, it also has struggled to address issues such as climate change and income inequality or, looking forward, the employment implications of artificial intelligence.
For a transformation to be successful in the new way of operating there needs to be strong elements of:
Envisioning the future — combining art and science
This requires harnessing creativity, data and insight in tandem and encouraging moonshot ‘anything is possible’ thinking. We know companies that harness data and creativity have revenue growth rates twice as high as companies that don’t.
Being bold in the transformation ambition set
It’s about avoiding when the ambition set is not ambitious enough. Goals (like targets) often get negotiated down. It’s important to set the context where leaders are bold enough to go after the full aspiration and commit the organisation to a new path.
Capturing new growth opportunities
This is about identifying and quickly addressing new opportunity areas being created by the changing landscape and working to create value on a shorter and more iterative timescale than ever before.
Few companies have cracked defining and executing the full potential of fusing commercial, brand, creative, data, design, operation and technology skills across an entire operation. To truly transform the business you need this diversity of skills working together on the opportunity.
Building in resilience, sustainability and constant evolution.
We know that real value emerges over time. Transformation solutions should support a quantifiable and data-driven approach to capture this value over the long-term horizon.
Leading with purpose and humanity and connecting it to value
The disrupted working world we find ourselves in needs an even greater focus on leading with purpose and humanity. This is about linking the transformation ambition to the organisational purpose. As you take stock and tackle your company’s vulnerabilities, you also need to set bold aspirations and push for specificity on the alignment between purpose and value.
Putting human centricity at the heart of the transformation
Overperforming companies understand the transformative power of people when it comes to sustainable business growth. It’s important to create a culture of psychological safety so there can be open dialogue, debate and time given to people to adjust and form new habits, making health and wellness a key part of the design.
Hiring for adaptability and other change strengths
You need a critical mass of people in your workforce who are naturally change orientated. This requires hiring and developing key strengths such as adaptability, comfort with ambiguity, creativity, experimentation and then creating a culture that encourages ongoing change.
Not making perfection the goal
We never likely achieve perfection when we’re doing something new. It’s about creating a culture, so that people understand that it’s not a problem if they try something new and it doesn’t work at first — and being open to sharing failures, so ideas get stronger.
What is clear is that there is no return to ‘normal’. Markets, strategies, customers, suppliers, technologies, processes and people all need to be re-evaluated in the new world and the way we transform and change businesses in the future needs to evolve to reflect this.
Based in London and with over 24 years’ global experience, Karen Thomas-Bland is often cited as one of the top business transformation consultants and coaches in the world. She is a trusted advisor to boards, executive teams and investors, creating sustainable, long-term value for FTSE/Fortune businesses and PE funds. She writes for many publications including The Times, FT, Association of MBAs and Management Today.