Extract
In today's increasingly dynamic and competitive business environment, companies must adapt to market changes, customer demands and emerging technological trends. This means constantly transforming to stay competitive, relevant and sustainable in the long term. However, carrying out a successful business transformation is not an easy task. It requires careful design, efficient planning, smooth execution, and effective control to ensure alignment and commitment by all members of the organization.
Contents
Bases of a Business Transformation: Awareness and Definition of Change
Every Business Plan, the set of principles, guidelines and objectives of an organization, sees the need to constantly reinvent itself and transform itself to stay relevant and competitive in the face of market trends, customer demands and regulatory changes. This with an approximate frequency of at least three years, varying depending on the industry and sector in which the company participates, however, as a general rule, it should be reviewed at least once a year in search of opportunities for improvement. .
This business transformation, generally associated with the same organization growth that allows exploring new horizons, it is not simply about implementing new technologies or changing internal processes; it is a holistic process that involves cultural, organizational and strategic changes that impact all aspects of the organization in search of achievement in terms of:
Increase Profitability: Create value for customers and meet your needs with greater operational efficiency and better profit margins.
Accelerate Growth: (Re)invent products and/or services to obtain differentiation, positioning and a competitive advantage.
Maintain Survival: Overcome internal crises and changes in the competitive environment by making better use of available resources.
Having clarity about the impact we seek to achieve in our Vision and Business Model is the first step to validate the need and urgency of change. This transformation awareness can be achieved through the use of the Business Model Canvas, with which we can conceptualize in an easy and visual way what would be the impact of our decisions when providing service to clients to obtain income and benefits and discern what changes would be the more they would help the business achieve its objectives.
Planning Business Transformation: Defining SMART Strategies and Objectives
For a business transformation to be successful, it must be supported by a series of strategies and objectives that provide direction and focus to the change, and allow the organization to measure its progress and adjust its approach as necessary. These strategies and objectives must meet with SMART features.
(S) Specific. Clear, well defined and understood by everyone.
Greg McKeown, in his work “Essentialism — The Disciplined Pursuit of Less”, explains that most organizations tend to have vague values, overly broad visions, and boring and unemotional goals. When defining SMART goals, we seek to answer the question:“What are we going to do specifically in line with our values and our vision?”. The answerIt should be simple, inspiring, concrete, meaningful and quantifiable. Some examples may be:
“Improve efficiency and productivity by implementing _____ before _____.”
“Innovate and develop new solutions to change _____ before _____.”
“Position in the market and surpass _____ by the end of _____.”
“Create an external collaboration with _____ by the beginning of _____.”
“Acquire financing from _____ before launching _____.”
“Increase revenue by _____% by the end of _____.”
“Open an office in _____ before starting _____.”
“Obtain _____ certification during _____.”
“Reduce expenses by _____% by the end of _____.”
(M) Measurable. Numerical data from a reliable source.
Quantifying progress toward achieving goals in terms of key performance indicators (KPIs) and behavioral indicators (KBIs) is one of the most powerful tools when driving change, since itIts analysis awakens a sense of urgency in people and triggers continuous improvement throughout the organization. due to that (non-)fulfillment of goals can trigger impacts:
Financial, in ROI, ROA, ROS, ROE, EBITA, Sales, Cost, and Profits.
Commercial, in itService Level and Customer Satisfaction.
Operational, in the Supply Chain, Process Flow, Resource Optimization, Quality Systems and the use of Technology.
Humans, with Staff turnover (silent or announced), the Development of collaborators, the organizational Culture and the internal Environment.
These indicators must be easy to administer, apply and explain to guarantee its use by the people responsible for its processes; and the results of their application must justify the investment of time and other resources to develop and obtain them since they can become an administrative burden for work teams that does not take them anywhere.
Capture the goals and their indicators in a Balanced Scorecard (BSC) allows explaining the relationship between different strategies and objectives with causal links and facilitates their monitoring.
(A) Achievable. Compliant under current conditions.
Defining goals must take into account the current conditions and realities of the organization, since their current situation may not be the most favorable in financial, human, material and/or technical terms to develop the change.
It is analysis of the current situation It can be achieved through the use of the SWOT Matrix Analysis, which integrates the vision of the different key areas of the organization on:
The current situation in your market (Opportunities and Threats), influenced by the political, economic, social and technological environment, and
Internal characteristics (Strengths and Weaknesses), influenced by leadership and their power games, the teamwork, communication and internal technical aspects.
With this, organizations can avoid setting overly ambitious goals, which can lead to demotivation and frustration,and the goals are too easy, which may not drive the necessary change.
(R) Relevant. They must trigger an action depending on the result.
If a result or the behavior of the indicators is off target, or has a trend that is interpreted as negative for the organization, All possible causes must be identified and assessed. to define action plans to improve the situation and avoid its recurrence on future occasions.
It is important that the strategies that are defined and the actions that are taken regarding the performance of the indicators provide comprehensive solutions to the organization's opportunity areas given that there are no individual successes or failures, only a shared result that is the maintenance of sustained profitability of the business.
(T) Time-based. They have a defined time.
Setting a specific deadline to achieve goals activates a sense of urgency and focus throughout the organization. This helps maintain momentum and avoid procrastination since without a defined time period, the goal could be prolonged,
By following the SMART method for setting business transformation goals, Organizations can ensure that their strategies and objectives are oriented towards tangible results. This provides direction and focus to the transformation, allowing the organization to measure its progress and adjust its approach as necessary to achieve the desired success.
Executing Business Transformation: Establishing Harmony in the Organization
When carrying out the transformation, it is extremely important to have:
Communication: Let everyone know the plan and their respective roles and responsibilities.
Shared goals: It is recognized that success is indivisible and we all fail if the plan fails.
Adequate and capable resources: Leaders provide technical capabilities and experience from previous exercises.
Scope management: Advance planning with schedules is carried out and reviewed constantly.
Change management: Lessons learned from previous exercises are taken and we work with well-informed people to anticipate and manage change.
Visual management: Have the goals in places visible to everyone and not only in documents, slides and other places where it is difficult to find them.
Pilot tests: Changes are tested in controlled environments with real conditions including contingency tests.
Traceability: Successes and failures are documented to help in future planning exercises to achieve the expected results.
Clear and unambiguous accountability mechanisms: The gap between the goal and the result is measured, and actions are triggered on it.
This last point turns out to be one of the biggest challenges when carrying out the Tactical Plan given that break the status quo and opens the door to fear that the performance of the person responsible will be exposed and punished, especially in environments of family businesses; the adoption of such mechanisms with a human approach that separates the problem from the person and maintaining effective, frequent, honest and open communication is key if you really want to achieve a transformation process.
Controlling Business Transformation: Managing Change
Change management is a critical aspect of any business transformation strategy. It involves identifying and addressing resistance to change, effectively communicating the benefits of the transformation, providing training and support to affected employees, and managing the risks associated with the change process. Effective change management helps to minimize disruption and ensure a smooth transition towards the new desired state.
Timely monitoring and analysis of information on the progress of the transformation by the people involved in the processes are the basis for improvement and achievement of the organization's objectives when designing and implementing a change. The ability to adapt and adjust the strategy based on the results obtained It is essential to ensure the long-term success of business transformation.
Conclusion: The Strategy belongs to All Members of the Organization
When seeking a business transformation we seek to link and align the different parts, stages and phases of the projects and operations with the short, medium and long term goals, prioritizing the compliance with goals and obtaining results that guarantee the survival, growth and profitability of the business always remembering that: What cannot be measured cannot be controlled, what cannot be controlled cannot be managed, what cannot be managed cannot be improved.
However, it is important to note and clarify that the strategy that is implemented is almost never the same as the one found on paper, but it is something emergent and dynamic due to rapid changes in the business and organizational environment, therefore, the formulation and review of strategy is a continuous process. This fact should not discourage the creation of a good plan, since without it, the organization would lack direction and would be at the expense of its reactive capacity and not its proactive capacity.
Want to know more? Visit our Blog: https://www.consultoriatacs.com/en/blog
Ready to transform your company? Write to us at: contacto@consultoriatacs.com
Contact us today and find out how we can grow your business together!
About Pablo Tellaeche (Author):
Owner and main consultant of TACs Consultores, Speaker and University Professor; seeks to bring a true and positive Lean Culture and Digital Transformation to every company with which he has the pleasure of collaborating.
Comments