Business transformation means a constant adaption of business models and identification of growth engines within a company. Underpinned by a transformation of the corporate culture, mindsets and behaviours.
Business Model disruption creates need for Business Transformation
The pace of Silicon Valley based companies has challenged the old traditional business models of most industries, using the access to superior technologies and excellent human talent of the best universities of the world. Their clear focus on growth, high capital returns and enormous flexibility has defined new rules how to play the business game in an accelerated way. The set of their cards seems to hold all the aces: capital access, human capital and a network of accelerators who have clear strategies how to serve the goal. The famous ones, like AirBnB or Uber, have created new ways to share assets and to create more consumption in a world where customers already have it all. In the next stage of the race, those companies will play an additional ace: the access and analysis of the consumer data they have collected over the years.
All other industries, e.g. car manufacturers, insurances will be affected and have to react on the next wave of business models which will threaten their normal business. Will banks exist any longer if you could do all your financial services with a cool Fintech-App? Are medical doctors still needed or is artificial intelligence superior in their ways of treatment using the latest therapeutic knowledge? And what is the business transformation needed to adapt quickly to a fast changing environment?
Defining a clear Business Transformation Process
The race is on but it is difficult to judge how the business transformation process should be designed. Talking about acceleration, company leaders know that they can’t stress the organization for years. So one of the key question you need to answer is: « In which strategic context are we doing this?» And to decide whether we talk constant development or whether we are in a very specific situation where we have to act fast and accelerate the business. Otherwise, we risk the core and the stability of the business.
To make a business transformation happen, you must define a structured process.
1. The first step is the vision and answering the question “where do you want to go?”.
2. Next is the evaluation of your business transformation capabilities: “do we have the skills/ capabilities to do this?”. PEAQ uses clearly defined assessment tools like the Barrett’s Cultural Values Assessment Tool to identify potential blockages and the level of fear within an organization.
3. Third you need to answer “what specifically needs to be done?” What practically are the drivers of top/bottom line performance?”
4. In our Team Development Workshops we work hard on mindset shifts, creating choices and commitments to build the capabilities for the next level of growth.
5. Only then starts the execution, normally it takes a 3-5 year journey to act on a large scale transformation. It is structured by different work-streams, normally working on Products/ Services, KPIs, Roles & Communication.
Continuous adaption after a business transformation process
First a business transformation process has to be clearly announced and well-communicated. Subsequently the leaders have to deliver in a credible and consistent way and create quick wins. In our role as trusted strategic advisors we often observe that the energy of all people involved is extremely high at the beginning but will be diluted over the months by daily business. To keep the whole team going, it requires a consistent effort, a structured process with precisely defined milestones and the future leadership behaviours articulated.
As a core leadership team, it is essential to keep the energy level up. Most companies are used to permanent change and have the appropriate tools and processes in place. Nevertheless, 70% of all change management initiatives fail in the long-term. It is much easier to build a new culture within a Start-Up-Company with a highly committed team of founders. Instead of changing the old habits and behaviours of a Fortune500-company. Why? The energy is new, fresh and clean. The culture is not influenced by old blockages and set-backs. On the contrary the energy of co-creation and collaboration is powerful and creates fast growth.
However, if you align your core leadership team on the strategic context and get their commitment to the business transformation they will inspire the rest of the business to come along on the journey.
Integration of IQ-EQ-SQ
The leadership team has to be willing to create this energy during the business transformation process. It needs an openness which is radical and self-reflective. And a learning journey in leading themselves confronted with their biases and blind spots. This takes enormous commitment and effort. PEAQ uses the Theory U process describing three key openings:
- the mind to challenge the assumptions (IQ),
- the heart, showing yourself as being vulnerable and listen to each other with empathy (EQ) and
- the will to let go pre-set plans and objectives (SQ).
We are used to work on the IQ level but to work on the EQ and SQ level as well is highly innovative. Feeling uncomfortable despite all tools in place and the connection to the business modelling is demanding as you play on a different level. But right here is where you create the concrete breakthroughs, where real transformation starts. Working with PEAQ means having real, open and honest conversation and having effective relationships among people who shape companies.
To engage in a conversation about how we could assist your business transformation write to qa@peaqpartners.com
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