In times of instability, having the internal systems in place - together with the right mindset - can be pivotal in successfully responding to adversity.
As the disruptive impacts of Brexit, global warming and the coronavirus pandemic have demonstrated, uncertainty is all around us.
But in the midst of seemingly relentless volatility, why is it that some companies hit the wall while others rise to the challenge?
The Transformation 20 report, published by US management consulting firm Innosight, provides some insights into the reasons why, in its analysis of twenty global companies that have achieved high-impact business transformation over the past decade.
The companies that make the list have done so because they've demonstrated leadership excellence and a strategic approach to business transformation. In addition they've also shown consistent performance in three core areas:
- Growth - demonstrating their flexibility in creating new products, services, markets or business models
- Repositioning - by adapting their traditional core business in response to changes or disruptions
- Financials - posting robust financial and stock market performance
The 5 behaviours of transformational organisations
The top performers in the Transformation 20 report span a diverse range of markets from fintech and IoT solutions, to digital factories and renewable energy services.
But despite their diversity of offerings, there are some overriding similarities that offer a useful blueprint for any business in the midst of a period of uncertainty.
Sitting at the heart of each company's transformational journey, are five deeply-ingrained organisational behaviours:
1. A leadership team that communicates the "why"
Embarking on transformation can often instigate an element of discomfort or opposition from those within the company who may not be as open to change. Overcoming this resistance relies on the presence of a leadership team with a clear mission and a sense of higher purpose, who can guide decisions and provide clarity.
2. A willingness to let go of the past
A common denominator of successful business transformation is not being afraid to make some tough choices, even if that means phasing out the business practices that don't serve the new mission.
3. The leveraging of core capabilities
One of the keys to transformative success, and to gaining entry into new markets, is building on existing strengths or assets such as brand, customer relationships, distribution etc in order to achieve new growth.
4. The seizing of digital opportunities
Many companies are achieving successful digital transformation by integrating new platforms or business models that improve their customer experience, streamline their internal operations or transform their underlying business model.
5. An organisational-wide approach to innovation
Effective transformational change relies on prioritising innovation as a company-wide activity, rather than one that is limited to a specific department. Within that, different types of innovation are also clearly defined, whether it is with the aim of innovating the core business, incubating (or growing) new business or looking for new operational efficiencies.
The biggest themes for growth
One of the overwhelming themes of the Transformation 20 report is the embracing of digital technology, with more than half of those companies on the list reporting they have improved their businesses through the introduction of new digital services that provide added value for customers.
The ramifications of global climate change have also proved pivotal in providing a transformative purpose for many companies, with four of the top twenty firms reporting that they have secured new growth through the development of cleantech business models.
Here in the UK, the importance of maintaining a strategic approach to business transformation is also a key theme.
And according to the findings of the Annual Manufacturer Report 2020, the commitment to business transformation is substantial.
Ninety-four percent of UK manufacturers surveyed say that they are 'alive' to finding new ways to adjust their business practices in order to achieve growth, and fifty-seven percent are confident that their attitude to growth will be unaffected by economic or political uncertainty.
There is also evidence of a shift towards a more service-oriented business model, with seventy-eight percent saying that they have developed (or are in the process of moving towards) a servitised business model that places greater emphasis on providing value for their customers.
Uncertainty, instability and change are inevitable factors in any business.
Surviving these challenges relies on a willingness of a company to adapt at every level - from its organisational culture to its product offerings and its command of technology.
Effective business transformation, that delivers tangible and relevant results, is likely to require a major shift in an organisation's capabilities and identity.
With the right mindset however - and with the appropriate transformational strategies in place - there is the opportunity to both plan for, and react to, the obstacles presented by economic, political, environmental or technological disruption.
