Years of research on business transformation have shown that the success rate for these efforts is consistently low: less than 30% succeed. Often, lack of employee communication, engagement and alignment with the new goals are the main reasons for such a high failure rate.
So what is Business Transformation exactly?
Business transformation is all about identifying techniques, new processes and technologies that aren’t being used to their maximum capacity. It requires understanding about how alternate solutions can be applied to further gain market share, increase revenue and customer satisfaction or reduce operating costs. Organisations normally undertake business transformations to create additional value. This may mean unlocking the potential of employees, harnessing technology for additional purposes or becoming more efficient to maximise the company’s potential. Ultimately, the goal of every business transformation project should be to ensure that the best processes and systems are being implemented within an organisation.For many organisations, this is not a simple process, particularly within the organizations that have a mindset that fears change. Therefore, how you deal and communicate with all stakeholder normally dictates how successful the transformation will be.
However, notwithstanding the above definition, business transformation can still mean a lot of things. However, there are normally 5 main categories of business transformation:
Business process transformation: This type of business transformation focuses on how the things are done within an organisation. It usually involves optimisation and automation of repetitive processes and procedures.
Information/data/digital transformation: This type of business transformation focuses on implementing and using new technology to unlock additional business value.
Organisational transformation: Organisational transformation is a type of business transformation that focuses on the company’s biggest asset — its people. The goal of organisational transformation is to optimise how various departments are staffed and structured. Some of the main objectives include breaking down silos, flattening the organisation, enabling better collaboration and people management.
Management transformation: Organisational hierarchies aren’t always the best for facilitating rapid decision-making and reacting to new company initiatives. Therefore, management transformation is one of the solutions to eliminate this challenge. This process, however, requires socialisation, easy access to information, establishing clear communication channels, and the overall transparency in organisational functions.
Cultural transformation: this type of transformation is probably the hardest business transformation to achieve. As organizational cultures tend to evolve organically over many years, they take much longer than any other type of transformation. A cultural transformation usually requires employees to embed new behaviours and new way of working.
Now that hopefully you have a clear idea of what Business transformation is about, we still have the pending question as to why many business transformation processes fail. In the vast majority of cases the reason or reasons as to why a Business Transformation process has failed lies in any of the below points i.e. in the wrong or failed execution of any of the following points.
Evaluating properly your existing business situation
Before going into a business transformation projects to tackle challenges, you need a clear view of how extensive those challenges really are. Depending on the scope of your business transformation project, it may be necessary to evaluate all of the current workflows, procedures, policies, and practices used in the various functions, business units or departments you’re looking to transform. Only after you have a clear picture of your current processes and bottlenecks, you can better understand how new technologies and processes can eliminate the biggest business challenges.
Get executive buy-in
Because of their complexity and the resources needed, business transformation initiatives can be a hard sell to upper management. However since top management, plays a pivotal role in defining the company culture, core values and goals, it is crucial to prove the long-term benefits of the business transformation. Once they are convinced about the benefits, they are much more likely to be a powerful ally in communicating the role of business transformation in setting and reaching organisational goals across the organization
Get employees’ buy-in
After you get the executive buy-in, the next crucial step is to get your employees’ buy in. In order for employees to collaborate in the process and align with your business goals, they need to understand the benefits of your business transformation efforts. Employees need to understand why those changes are good for them and for the business. Only then you can expect employees to work towards the same goals. Proper internal communication is extremely important here. Employees need to feel informed and well aware of how the changes will influence their jobs and lives.
Engage all employees into daily conversations
In order for business transformation to succeed, employees need to understand what is going on in the organization they work for, before, during and after the changes are being implemented. The best way to do so is by engaging your whole workplace into daily company conversations. This doesn’t mean sending a newsletter announcement to all of your employees. This means creating dialogues and two-way conversations where employees can freely express themselves and share their thoughts. Even though this may seem easy to achieve, many organizations are struggling to create such culture, and the biggest culprit for that is the use of wrong internal communication technology such as email and intranets.
Focus on your communication strategy
Digital technologies are powerful tools, but they require human intelligence—and enthusiasm—to be used effectively. Without informed and engaged team members across the organisation and a long-term digital roadmap built on supporting company ambitions in the digital world, even the most ambitious digital transformation strategy will fail.Therefore, from its inception, any business transformation project should be founded on clear and constant communication between the project team, management at all levels, and the organisation as a whole. Efficient communication ensures everyone is in the loop and it helps employees understand their specific roles and the availability of resources to help them achieve their goals.In addition, continuous communication helps build a spirit of collaboration, encourages employees’ voice and ensures everyone has the information they need to address any frustrations, roadblocks, or other challenges that may occur.Therefore, clear communication is critical during business transformation. Research clearly indicates that organizations that follow this practice are three times more likely to have a successful business transformation project.
Build an efficient change management process
Business transformation means changes within the organisation. Therefore, effective change management is crucial during these projects. Effective change management allows you to track, measure, and analyse the changes being implemented and understand how they are effecting the whole workplace. Remember that the teams responsible for change implementation have to be very good communicators. Leading a successful change without ensuring that the right information reaches the right employees at the right time is impossible.
Set clear short and long-term goals
Setting clear goals and communicating them to the employees is very important during business transformation. Employees need to understand the goals they are supposed to achieve and how they’re going to achieve them. Set smaller short-term goals to motivate your employees, and a few long-term goals or milestones to celebrate with the whole organization.Foster a sense of urgency
Without a sense of urgency, it is hard to motivate and engage employees and other stakeholders to take actions and participate in the transformation process. Therefore, for business transformation projects to get implemented, senior leaders should foster a sense of urgency for making those changes. This is the practice where good leadership communication is crucial.
Eliminate fear in the workplace
Business transformation efforts within organizations can develop emotions of uncertainty and fear. This may cause employees take their frustrations out on each other. Here, internal communicators and managers have the responsibility to overcome the difficulties and resolve conflicts. Many employees think that business transformation projects may eliminate the need for their skills and expertise. This mainly happens during digital transformation efforts where people are convinced that new technology will replace them.
Choose carefully the communication channels you’re about to implement
These are various means of communication within an organisation. The complexity of this communication ecosystem makes it hard to ensure that all the employees get the information they need to successfully follow the new business transformation initiatives.
Be agile and encourage new ideas
Organisations that are not agile are almost destined to fail in their business transformation efforts. Companies that are most advanced in their transformation efforts managed to turn their company culture into an internal accelerator of innovation and transformation. Hence the importance of investing in building a culture of innovation within organisations. However, it can be extremely hard to embed new behaviours within organisations. To achieve that, employees need to feel free to share their voice and their ideas. It is the leaders’ and other internal communicators’ job to drive those behaviours through efficient, consistent and continuous communication with employees.
Close the skill gaps at your organisation
Closing the skill gaps before and during business transformation efforts is something that most organisations struggle with. We all know that a majority of jobs are seen to require digital skills in the future. Present research indicates that around 44% of workers aged between 16 and 74 in Europe do not even have basic digital skills. Therefore, investment in people and new skill development is crucial for business transformation.
Measure your employees’ engagement
I hope that by now, you have probably understood how important effective communication is for successful business transformation. However, communication strategy without goals may not bring so much value to your organisation. Communicators need to understand the effectiveness and outcomes of internal messages delivered to employees. They need to understand and measure which messages are the most effective, which channels are the best to deliver those messages and which employees engage more than the others.
Thus, I hope you now understand that undergoing any business transformation or business re-engineering guidance requires speciliased expertise in having such a process to increase the chances of it succeeding.
At EMCS, we specialise in assisting various businesses in analysing their own business performance and internal processes to then devise any needed business transformation processes and most of all managing such a transformation process in a professional way, winning over all stakeholders involved to making such a process a success.
EMCS is today an approved service provider under the Business Re-Engineering & Transformation Scheme from Malta Enterprise. Those businesses that would have to embark on a business transformation process project to change the way they operate can avail themselves up to a maximum of €5,000 for every business, allowing them to embark on such re-engineering or transformation projects under the professional guidance of approved service providers like EMCS. Feel free to contact me on firstname.lastname@example.org for further details on this scheme.