Digital transformation has made potential market entry for companies a lot easier than it was in the past. Technology means nowadays you can launch a slick product or service quickly and with few resources.
However, genuine digital transformation goes beyond technology and may be described better as “transformation in a digital age”. This involves technology enabling different ways of working for people to transform their organisations and what they do for the customer.
Transformation offers something more significant than technology alone and this type of wholesale enterprise shift is huge, as nothing in the existing business model is left untouched.
Thinking differently, however, is difficult for many organisations and especially for successful people at the top. Despite their success, they and their business may have to discard a lot of what went before. And there are many examples of organisations that didn’t respond to change and are no longer with us.
The people perspective in successful transformation
People play a central role in any type of transformation but beware: depending on how you work with them affects whether they facilitate successful transformation or sabotage it.
Virgin Group founder Richard Branson has said that if you look after your people, they’ll look after your customers. What your people do and say and how they behave will create your company’s culture.
The organisation culture challenge, historically, has been the tension between people responsible for running day-to-day operations and those involved in change projects and programmes. Keeping these teams separate can lead to organisational change foisted on employees, generating resistance and even sabotage.
Successful transformation needs to involve everybody; if they understand and take ownership of change, you’ll encourage collaboration rather than consternation.
But creating the right culture for transformation has to begin at the top of an organisation. Senior management needs to demonstrate it is willing to move from an often traditional and unresponsive cultural approach to one characterised by a mindset of innovation and agility across the entire organisation.
Recognising your business “delta”
Why is it necessary, today, to take business transformation seriously and ensure that people are well-equipped to participate fully in that journey? The critical factors are the changing demands of the market and the velocity of these changes.
For example, a company may have been around for 40 years, but customer expectations are ever-changing. If you provide a service or product in the same way you have always done, you could find there’s now a “delta” to be aware of.
This refers to the gap between companies’ current performance, capability and products – and where they need to be in the market in order to remain competitive.
Deltas tend to attract disruptor companies that offer something different to close that gap – this tends to change the way an existing industry operates or creates a new market altogether. Without realising it, an established organisation becomes vulnerable. Businesses need to be aware of the fact that the size of the delta is continually moving because of new ideas and technological innovation.
It’s not enough to ensure that the delta has been narrowed down once, as market expectations are always changing. If an organisation doesn’t keep constant track of it, the delta is likely to grow again.
The importance of enterprise agility
With worldwide change happening so quickly to markets and customer demands, there is an urgent need for organisations to respond to disruption and the delta by becoming more adaptable, more quickly.
Enterprise agility is therefore becoming increasingly important. This means enterprises and their employees need to move from the idea of long-term stability to living in a state of constant flux and volatility.
When speaking to different organisations, a similar story emerges: project and software teams are using agile methods to work differently and accelerate change; but if their colleagues are not working in agile ways, then there’s a real clash.
Therefore, you need to tackle the prevailing mindset: people need to be more open to change, to increase their levels of ownership (e.g. making local changes in their department or team), recognise their role in the bigger picture and change the way they work.
Embedding enterprise agility
How do you know when your people are embracing enterprise agility and the ideas are underpinning your organisation’s working practices?
There are five key aspects of enterprise agility that you need to embed:
- Your people are embracing change: it’s natural to see some level of change resistance, but you can also see that it’s reducing.
- Challenging the status quo: part of culture change is creating an environment where people are not afraid to ask questions and challenge existing ideas. Also, any good ideas that arise from challenging the status quo should be communicated.
- Everybody understands how their job/role contributes to value creation: it’s soul destroying for anyone to feel their job doesn’t add value to the organisation or customer. So, you have to help people recognise the part they’re playing.
- Development of cross-functional, collaborative teams becomes the norm: therefore, you have a more adaptable, agile enterprise rather than a siloed mentality.
- The evidence of enterprise agility is clear: flexibility and adaptability must be manifest in the organisation, not just talked about.
The types of learning and development an organisation provides for enterprise agility should also be relatively straightforward and founded on basic concepts.
With structured input, the change curve of a changing mindset will take time. Some people will run with it while others follow more slowly. However, an organisation that invests in such learning and therefore in its people should see relatively quick returns.
Enterprise agility is certainly not just a “nice to have”: it has become a necessity as more and more established organisations disappear. The question is, what organisation today is safe?
John Edmonds, PPM Portfolio Development Manager, AXELOS