Most corporations in need of transformation are complex organizations. This complexity was built in decades of focusing on optimizing the core business. With complexity people tend to lose sight of the big picture and become specialized. Hence the problem they see in front of them looks like the most important and urgent, while everything else falls into irrelevance. For transformations, this translates to ‘political battles’ for resources ensuing between the various ‘factions’.
In a recent article, I wrote about 14 reasons why a corporate transformation might fail. This time I would like to focus on one. In my opinion one of the most common reasons for failure is that too many transformations happen simultaneously. Hence the resources are spread thin and people find it hard to focus.
To prevent this, leaders need to prioritize. Prioritization should be rooted in the understanding of two aspects:
- no one single transformation can solve all problems.
- different business challenges require different transformation initiative.
There are many ways of categorize transformations. But oversimplifying, they are either defensive or progressive. Defensive transformations tend to focus on cost cutting. While progressive ones are concerned with growth. For example Idris Jala’s quest of transforming Malaysian Airlines was a defensive initiative.
Understanding the nature of each transformation is just half of the story. This needs to be followed by an understanding of the question(s) each transformation is answering.
Digital transformations (probably the most in-trend these days), are defensive by nature. How so? They focus on expanding the expiration date of the existing business models. As Jeff Gothelf puts it: ‘digital transformation is not innovation’.
This transformation might answer one of the following questions:
- how are we staying relevant in a digital era?
- how are we serving digital natives?
- how can we harness new technologies to improve our existing offering(s)?
Agile transformation has been around for quite some time. This initiative focuses on operational excellence in the digital era. The agile transformation can serve both a defensive and a progressive role. Agile transformations aim at answering:
- how can solutions be optimized?
- how can customer feedback be rapidly and continuously integrated in existing products?
- how can we lower our time to market on product improvements?
Innovation transformation is probably one the newest forms of transformations. For this one, corporations employ methodologies such as design thinking and lean startup. Since the two methodologies are effective at different stages of a product lifecycle, I will address each one as an individual transformation.
Design thinking transformation is by nature a progressive transformation. And it focuses on the following questions:
- are we finding the right customer problems to solve?
- what are the (new) problems faced by our customers?
- what problems should we solve to attract new customers?
Lean startup transformation, like the design thinking transformation is progressive. Another interesting aspect the lean startup process is that it complements the design thinking one by providing answers to complementary questions:
- should we solve these customer problems?
- how can we solve these customer problems?
- price wise, where should we place our solutions?
Enterprises today face an unprecedented pressure to change. Many leaders struggle with taking the right decision when it comes to supporting one initiative over another. With time ticking away leaders shouldn’t be accomplices to ‘office politics wars’, but understand that no silver bullets exist. And each transformation can only serve a limited purpose. Thus, committing to a mix of defensive and progressive transformations will increase their companies’ survivability odds.