Trends and common mistakes in business transformation in 2020
Different areas of business have their own aspects of digital transformation. Additionally, there are also general trends, as well as mistakes, that decision makers make most frequently. Pavel Entin, President at Brainy Solutions, talks about how to intelligently approach digital transformation and not become an adherent of obsolete practices.
Trends
Trend # 1 (outgoing). Agile transformation
Back in the past year, Agile transformation has been very popular. Many companies tried to implement Agile, one way or another. Now it is being introduced only by firms of the last echelon.
In Product Life Cycle terminology, which describes the participants using a particular product, new agile users today are the so-called laggards, which are located at the very rear after the late majority. In other words, Agile has already been implemented by most companies in the industry and the ones remaining are just catching up.
Trend # 2. Corporate innovations
Corporate innovations are a trend that appeared in parallel with Agile, but is still relevant. Different companies understand innovation each in their own way, but all agree that there is always a search for more effective business solutions and their implementation.
Corporate innovations have spread because the scope of work within them is much broader than just the work on finding and implementing startups. It includes new product launches, scaling to new markets, venture capital investments, and more.
Trend # 3. Digitalization
The new and widespread trend in business transformation is digitalization. After all, to work with innovations, you need your own trained team or contractors and providers, including ones who are subject matter experts (SMEs) in the relevant technologies on the market. Business digitalization in many cases can be initiated by an IT department in any company.
Trend # 4. Distributed teams
An important change that has come as a result of the pandemic is the widespread introduction of distributed teams. Even businesses that previously thought they couldn't exist as virtual teams have learned to work with remote management.
These changes are happening for many companies right now, and still most do not understand the full impact of the transformation. Many companies are experimenting with hybrid work methods, where teams meet in the office 1-2 times a week (or just several times per month), while working remotely the majority of the time.
Mistakes
Mistake # 1. The responsible agent does not know change management
Any change must be based on the science and practice of change management. Unfortunately, not many people take courses of change management within universities or as part of their professional development. I am often surprised to find that those responsible for directing business transformation often do not know the basics of change management. It is ironic that the approaches of Kotter (a key change management guru) are not even used everywhere, despite being developed almost half a century ago to address how to approach key aspects of organizational change.
Mistake # 2. There is no team or it is assembled incorrectly
It is almost impossible to find all the competencies and qualities necessary for the transformation in one person. There are many nuances to consider when creating it.
We deeply analyze teams and we teach to combine the necessary qualities and skillsets within them, diagnosing what is missing. It is key to organize the optimal team depending on the company and the specific business imperative.
Furthermore, you need to consider that the team should not only have innovators, but also a person (or people) who will be more practical to look at all the crazy ideas and perform a “reality check” on them in order to ensure the feasibility of the transformation strategy being devised.
Mistake number 3. No business goals set
Basic mistakes begin with the fact that, from the very start, people communicate incorrectly, lack a clear vision of a business goal, do not answer key questions: “Where and why are we moving? How will the changes affect us? What will we get?"
Transformation should not be done for transformation's sake. To illustrate, let's imagine an extreme case in which a food company initially produced ice cream, and then suddenly decided to become an IT company, because such is the latest trend.
It is logical to assume that the processes of making ice cream and the work of an IT company will not coincide in many respects, and such a race for "business fashion" with any lack of synergies between the two business segments (e.g. ice cream and IT) will lead to negative consequences.
Mistake # 4. Misaligned expectations of change
One of the key mistakes lies in managing expectations and risks. Any changes one makes can have complex consequences.
For example, let's say you decided to digitize your sales funnel by implementing CRM. At the start, many people think: now we will implement this IT solution – and we’ll start living a new life! This is not how it actually works. Be prepared that in the early stages the sales team's effectiveness will drop, because using a new tool requires some time to adapt. In most extreme cases, I’ve seen senior management hiring additional employees to work with new IT systems that existing staff does not want to learn themselves.
Often companies really go to the next level in terms of reaching the results they hoped for, and even going beyond the initial expectations. Yet, sometimes it doesn’t work that way because companies run out of patience, time and resources. Failure comes from mistakes in change management and from a misunderstanding of how those changes are affected. Evidence of these mistakes can be found in almost every failed transformation case.
How to transform wisely and maximize results:
- Do the preparatory work before starting the transformation process: conduct risk management sessions, build the right communication and define specific business goals
- Don't follow trends just because they are popular. Analyze and understand what is more profitable for your company to implement: perhaps it’s digital technology, perhaps it’s more innovation, or maybe a mixture of both
- The change agent in your company must be proficient in change management skills. If you understand that you lack knowledge in this area, develop this skill set further or find someone who has required competences and only then start radical changes in business