Business Transformation: The good, the bad and the ugly

The last 100 years witnessed a colossal change of how organizations behaved and how they were managed. During the early 20th century, organizational ability to change due to market was considered irrelevant and typically companies did not have any formal corporate strategy. With the turn of the century, organizations which could not adapt to changes fast enough are doomed to fail and meet their demise eventually. Hence, constant change has become the imperative to survive in the economy. Organizations are growing at extremely fast pace in a complex and diverse world, which means the classical change management approach is not applicable anymore. Everything is accelerating at speeds never seen before.

Executives in organizations should decide whether they want to transform or to die. It's obvious that all executives will choose transformation. However transformation it's not that simple. The organization has to be able to leave behind its well-established identity and its credibility as a brand.

Executive leadership plays a crucial role in transforming the organization. Executives often claim that they are transformational leaders; however the truth is far from reality. The actual definition of transformation and transformational leaders tends to vary among the executives. But what is business transformation? It is a change management strategy which has the aim to align people, process and technology initiatives of an organization more closely with its business strategy and vision. In other words, it is moving from the current situation to the future vision.

Transformations can be good, can be bad and can be ugly.

The good
Transformations are good because they ensure business sustainability and continuity. It is prominent that the ultimate objective of the executives of any organization is to build sustainable business. This means short-term and long-term planning, ensuring the delivery of business value to the shareholders and building strong brand equity.

The bad
Transformations can be complex and painful. If transformations are not properly managed, then they may lead to fiasco. Throughout history, there has been many organizations which failed to transform themselves and don’t exist anymore. Kodak is a good example whereby they had a huge global market share, enormous financial power, but failed to transform themselves. I bet, that the CEO or any of the Kodak’s senior executives were asked during the early 2000’s if they are transformational leaders, they would have stated “yes”. What happened to Kodak is both puzzling and devastating. How come a company having around 85% of global market share failed to transform? This is a topic by itself which I am not going to discuss in this article.

The ugly
Transformations tend to be ugly. Humans do not like change. They prefer the status quo which seems to be safe and less risky. Business transformation creates resistance to change and this is where it gets ugly. This split the employees into 2 groups; one group supporting the transformation (which tends to be the minority) and the other group, who passively or actively do their best to hinder the transformation process. Why they hinder the transformation? Because it is easier and far less risky for employees to stay in their comfort zone. 

Conclusion

Organizations are permanently under pressure to change and to adapt to new environments, as change is inevitable. Organizational transformation is not an easy task, especially one spanning different cultures. However, executives need to employ special skills, competencies, methodologies and tools to ensure smooth transition from the “as is” to the “to be” position. It is imperative for executives to become fully engaged in the transformation process; otherwise “the way we’ve always done it before” will prevail. Change is inevitable and what differentiates organizations when transforming their business and culture is how they manage it. Organizations with strong executive leadership and high proficiency in cultural change management are the ones which could survive and sustain their business. Transformation is a complex task and the executive teams will face many hurdles on the way. However, with the right mixture of authentic leadership, cultural skills and strategic thinking, it will minimize the likelihood of failures.