Transformations are an organizational strategy in which one set of activities is replaced with another. In business, transformations take place as a means to increase productivity and efficiency. By replacing what had been there previously, such as the HR manager with a robotic process automation software, it means that headcount in the company will be much lower. Before embarking on a transformation process, the benefits would have to be clear and adequately weighed against the cost of not embarking on such transformations.
Transformation in business
Many people have a difficult time understanding what transformation in business strategy is. In the simplest terms, it’s using new technologies to meet goals and disrupt old markets. A transformation in a business strategy is also when a company changes their competitive approach or the way they do business. A transformation could be driven by new technology, changing consumer needs, or shifting trends and preferences. Transformations typically involve major changes to an organization’s culture, marketing and sales efforts, production process, organizational structure and management systems.
There are two major types of transformations with the first of them being Evolution – the process of gradual change; revolution – the process of sudden change in one aspect which then impacts other aspects of the business strategy.
Businesses can also apply for government grants for research purposes to help with their transition towards a more sustainable economy. These grant programs typically help businesses transition to a more sustainable model without extra cost, by offering funding towards the cost of research and development.
According to transformation consultants, putting sustainable practices into place can sometimes restrict a companies growth. Capital investments are usually needed to introduce eco-friendly practices but such investments restrict the company’s cash flow, thus restricting their ability to grow. The capital investment is an essential element in creating environmental sustainability, if these investments are not made then the business will have to spend more money in the future on repairing their infrastructures instead of growing their business which may result in a decline of customers.
Common types of Transformations
Process Transformation: This focuses on how products or services are produced and delivered with technology.
Customer Experience Transformation: It strives to deliver an extraordinary customer experience that exceeds expectations and heighten levels of customer satisfaction.
Digital Transformation: This typically seeks to aggressively digitize all parts of an organization, including operations, assets, workforce, marketing channels and data in order to better compete online by attracting customers who want seamless digital experiences.
Organizational Transformation: This looks at the way companies operate by considering what capabilities they will need to succeed.
Global Transformation: This focuses on how a company’s current processes and business models may need to be adjusted in order to capitalize on new opportunities in global markets.
Businesses that have successfully implemented transformation are more likely to compete successfully than those who have not.
Current technologies and trends suggest that organizational transformation will continue to become more widespread as organizations shift from being hierarchical, siloed structures operating across lines of business with hierarchically organized departments and processes, towards networked structures built around the customer experience, empowered employees who can handle increasingly complex workloads and changing priorities.
Recently, the pace of business transformation has accelerated due to technological developments in data collection, storage, and analysis. Businesses can now generate, collect, analyze and use vast amounts of data to gain better insights into customers and markets. New technologies such as the internet of things (IoT) enable businesses to monitor customers and assets in real time and gather information that helps organizations make better business decisions.
Businesses also have access to abundant computing power at a low cost that enables new online experiences for consumers. This has led to a proliferation of digital platforms for communicating with businesses. Digital platforms allow consumers to interact with businesses and each other more closely than previously possible.
Additionally, a lot of these technologies and trends have evolved rapidly over the past few years. In some cases, the speed of change has been so fast that businesses have not had adequate time to react.
Experts agree that in order for businesses to succeed in the 21st century, they must transform if they are to compete effectively in new markets and stay ahead of evolving demographics.
Empowerment: Empowering employees is a key component of successful transformation. According to “The Economist”, “Enabling employees to operate and thrive within an organization is vital – but only if their sense of self-worth does not suffer as a result. Organizations need to avoid the trap of treating employees as cogs in the machine.” This can be more challenging for leaders, who must not only prepare their organizations to compete in the 21st century but also keep employees invested in the organization’s success.
Businesses can empower workers to innovate and make changes by providing support and resources for them to develop new skills. Because employees help create a business’s identity and reputation, transforming a business requires employees as well as leaders to be involved. When businesses develop systems that allow workers to contribute ideas, they are more likely to succeed.
Mobility: Mobility affects all aspects of transformation, from how work is done, where it is done and who does it. Businesses must be able to move employees and the jobs they do across organizational borders so that the organization can adapt to the changing needs of customers.
Mobility provides employees with greater autonomy and time flexibility, allowing them to work from home or use their own devices. In addition, mobility allows businesses to work with clients from anywhere in the world by collaborating digitally. Yet while it may seem like a convenient solution, mobility is not a silver bullet for transforming businesses. This solution must be coupled with other elements of transformation outlined above (e.g., customer experience) in order to truly result in a transformation that will be sustainable in the long term.
Disruption: Disruption occurs when a new technology disrupts an existing market or business model. For example, when the iPhone first came out, it disrupted the market by providing features that had previously only been available on high-end and expensive smartphones. Similarly, computer technology has been disrupting banking and insurance since the 1990s; as recently as six months ago, banks were still struggling to be able to compete with newer technology that allows customers to do business digitally and quickly.
Disruption can take several forms for businesses. For example, change in the workforce is often disruptive because it changes a business’s workforce requirements (e.g., changing the skillset required) or how employees are managed (e.g., providing greater empowerment). Additionally, technology-driven disruption can be disruptive to businesses if they are unable to keep up with changing technology.
Disruption is not something that businesses can necessarily avoid; however, they can prepare themselves to deal with it better by being aware of potential disruptions and how they might affect them.
Organizational transformation is made possible through the use of digital technologies. Digital technologies enable companies to digitize their workforce, assets and operations. This means that these assets can be managed remotely and accessed anywhere in the world. In addition, digital technologies enable the development of transformative business models like platforms, which allow for flexible use of assets and rapid customization based on consumer demand. These services can provide value to consumers by reducing redundancy and enabling customers to purchase goods and services with a single click.
Digital technologies have created new challenges for companies. For example, in order to take advantage of these technologies, companies must transform their business operations in many ways. The pace of organizational transformation has increased significantly over the past few years as businesses develop new methods of engaging with customers and workers through digital platforms. According to “The Economist”, using digital platforms is “the only way for organisations to work with consumers on a mass scale.” However, one expert cautions that not all companies can successfully use this approach. For example, while Uber has provided consumers with a convenient and inexpensive way to get a ride, it has faced challenges in operating in some areas due to regulatory issues. In addition, Uber drivers have faced challenges as they seek to organize and obtain better wages and working conditions.
Businesses today are experiencing a rapid pace of change. There are many practical steps that can be taken to successfully transform businesses for the digital age, from customer experience management strategies to workforce mobility strategies. However, businesses must ultimately ensure that their transformation efforts do not result in negative outcomes for workers or consumers.
