Work on your business model
If you ask me, successful business transformation starts with asking why the Company should be in the business.
And, reaching milestone without bruised and bleeding.
You as a business owner, must evaluate:
- why you are in business
- how you make revenues
- how many different ways can you make revenues
- your business position in the customer value chain
Whether you are a last mile player or intermediate, even if you run marathon, you may benefit lot more. As a matter of fact, you may be underwriting principals of business without realizing it.
Successful transformation is all about picking up the right friction to address in the market and working on sweating just enough to make the right moolah!.
Pursue offerings that improve your company’s market relevance, increase
customer stickiness and above all yield higher than average revenues.
More the recurring revenue better it is.
You should constantly Identify scalable revenue opportunities so that transaction costs of managing the business does not linearly increase with the scale of operation.
Focus on strength and deepen expertise
Playing what you are good at, can yield better predictable outcomes.
When you know your customers well, understand their latent needs and serving them with delectable offerings is the strength, building on the customer experience management, is the sure way to prosperity even in service business.
Deep domain expertise, multiple market exposure and deep insights in
the markets can be a stealth mode weapon.
Productize the services and standardization of process would yield scalable and sustainable platforms to grow.
Plan big, firm on direction but be flexible in actions
To pursue transformation, companies need to get to the big picture to see which way the markets are treading, catch the cues early and cast the direction firmly.
Business transformation is a multi-period event and lots of time you may see twists and turns before one reaches the goal.
Companies must realize which goal remains constant, what changes may be required in tactical areas including business development, marketing and delivery functions.
Work hard on only few things at a time
You should focus on fire on few fronts at a time, for better controls.
A common understanding – Review quarterly and half-yearly, maximum 3 areas, and 2 measures for each area.
Cut flab, Unwind quickly to transform
You may have to scale down sometimes, for scale up in business.
Your company should contain low EBIT offerings; and when required cut the arm completely. Closure or downscaling can be painful and bring lots of emotional baggage. However, you can Revisit requirements and outcomes, align them better for improved productivity and cost advantage.
Build capabilities of People and infrastructure
Simply, business transformation is all about increased capabilities of people.
- Hire new resources to complement gaps in capabilities, and build an effective knowledge transfer mechanisms so that skills set remain even in times of attrition.
- Hire resources for their attitude, and hire slowly.
- Allow them to fail and learn, but when found waxing and waning, fire quickly.
- Invest in mid and senior levels for long haul and empower them to own and drive outcomes.
- Cultivate internal talent by creating newer platforms for the incumbents to extend and stretch their capabilities.
- Build stronger and hungry team by hiring cohorts of fresher and align them to right mentors. Complement external training and development with coaching and mentoring.
- Create new organization, and empower through systems and process
- Business transformation unlocks the hidden value of your company
- Create newer organizations to bring more focus and market alignment,
- Create space for newer leadership to emerge to own and direct growth
- De-risk your company from vagaries of markets and offerings
- Create sub-divisions for increased focus
- Align shared services to contain cost (may be, matrix structure)
In a business transformation, you are not just bringing new talent at key roles, but the incumbent leadership progressively stepping back so that the new leaders own and manage their areas of operations.
Build systems and process that promote data driven decision making, ownership of tasks and outcomes.
Sales operations can bring in transparency and sense of urgency in acquisition, and limit the tendency to operate at one level below.
Adopt frameworks that work for you.
- Never ape large companies and their approaches.
- If Balanced score card (BSC) requires too much administration, instead adopt a simplified common objective methods.
- Process and procedures must be chosen for their effectiveness and ease of working.
- In short follow KISS principle.
You should have converts and champions for driving the implementation of your Business transformation.
Your business requires only a few committed generals who can lead a pack of soldiers for a long haul.
They absorb the agenda, align the resources and marshal the pace required to reach the goals.
Beware – Entry and exit of expiry date leadership disturbs your business transformation motion.
Select the leaders wisely and set them with explicit goals of outcome management.
Transform the complete organization
All business functions should tango in tandem for your business transformation to succeed.
1] HR may have to move beyond recruitment, attendance and salary ledgers.
HR needs to move to the role of custodian of the organization culture, leading in defining and adopting routines and programs.
2] Marketing too has to move beyond peek-a-boo at some industry event.
Marketing must employ all the available marketing assets (social media, offline and PR) to improve branding.
3] Sales needs more curated meetings ably supported by inside sale that adopts intelligent mining and campaigns.
Persistent and clever acquisition and deeper account engagements drive sales revenue.
Pricing must move from a single point to a stack based pricing.
Bundling services & features intelligently uncovers the value of the solution and often helps in addressing various customer segments.
Wind up slow, Pace it right, stick to play
A good sugarcane crop needs sufficient time to harvest. Hastening the process may lead to low quality cane without much juices.
Similarly, your Business transformation is a cultural shift, not just addition or deletion of some products and services.
Manage constant pace by providing sufficient time to for all the stakeholders involved in the transformation, and by creating pre-wiring sessions at crucial transformation stages – for small wins motivating; complete organization to embrace the next steps.
Business transformation requires investments tied to measurable outcomes and impact.
Invest in people, their development and product development.
Invest on building your organization unique culture.
Winning and sometimes investing in an industry or analyst enabled award helps in building the brand recall and positioning.
Investments in customer experience management, quality and delivery make a huge impact during transformation.
Invest in key relationship
Business transformation in essence is improving predictability and de-risking the revenues.
Convincing existing clients with improved or new offerings are easier than new clients.
Deepen the relationships with key clients, pursue lighthouse programs to iron out the new service and product offerings, improvise them and assiduously build a platform where the clients could refer and promote the company.
Nothing works like a peer referring a service provider to another.
Over communicate, inform, influence and advocacy
Be careful – your Business transformation can be messy, disruptive at many levels. Leaders must communicate the agenda, the outcomes and motions often at various platforms.
Leaders must inform and influence various layers of the organization.
Continuous and consistent information and advocacy on the transformation state and outcomes achieved improve transparency and commitment.
Business transformation like any change initiative is risky and challenging.
There has been many moments of despair and few moments of exhilarations.
Many a times the drawing had to be revisited to recoup resources and replan strategy.
Some changes have been smooth, while continue to be overwhelming.
While it has been easier to change process and systems, most challenging would be the people part.
However, the outcome is significant, some may be realized very early in the business transformation, while some may require longer time to hatch.
Companies have improved their product ranges, significantly de-risked their businesses, improved delivery and emerged stronger wholesome organization.
Pathfinders work with Small and medium companies that pursued business transformation to improve their market relevance and financial sustainability.
Pathfinders take heads on the winds of commoditization, falling margins and technological change.
Suresh Shah has been helping businesses customize their transformation plans and simultaneously improve their capabilities.
Suresh Shah, Pathfinders Enterprise
Above write is general in nature, for sharing our experiences and insights. This is inspired from notes by Browne and Mohan