Companies must apply an agile mindset toward business transformation by building business agility across all aspects of an organization.
As customers, competitors and technologies evolve at a rapid rate, business leaders must be proactive to effectively address the threat of disruption and drive competitive advantage in the marketplace. In fact, almost 75 percent of companies expect to increase the number of significant change initiatives planned for the next three years.
Although this may surprise some, this increase is becoming the norm as the relentless pace of change continues to increase exponentially. Hence, transforming your business continuously in an agile fashion is key to success. We define business agility as the willingness and ability to respond to changing business dynamics in a flexible, adaptive and rapid manner.
Companies that can pivot quickly in transforming their business will have a significant competitive advantage. Those that don’t will cease to exist. One recent survey shows over 90 percent of companies believe business agility is key to their success, but only 10 percent believe they meet the mark.
Embarking on business transformation is a daunting effort in its own right, but doing so in an agile manner is even more challenging.
To accomplish this, companies must first understand the scale and complexity of business transformation and then understand how to take an agile mindset toward transformation.
Defining Business Transformation
Many companies are initiating business transformation efforts to address critical challenges. Unfortunately, “business transformation” is now an overused term that means different things to different people.
People widely and inconsistently use “transformation” to describe varying degrees of “business change.” This use ranges from tactical improvements around a given operation to the development of new business models causing broad-based industry disruption.
True business transformation is complex and multi-faceted and impacts all part of your business.
Hence, we define business transformation as “driving competitive advantage in the market through the deployment of strategic changes and performance improvements across the organization, encompassing strategy, process, people, culture and technology elements.”
Each element, as illustrated in the relationship model below, is critical on its own but collectively requires structured integration with others to deliver new business capabilities and achieve world–class performance levels.
So, how do companies address large–scale change and complexity and do so in an agile fashion?
Taking an Agile Mindset Toward Transformation
Based on business transformation complexity, a thoughtful approach is required.
It starts with an analysis of your current situation and the business drivers impacting your business, including customer, competitor, regulatory and internal pressures. Essentially, you need a 360-degree understanding of your organization’s performance.
From there, you can develop a compelling vision, strategy and business architecture to guide the ideation, design and delivery of world–class business capabilities in an agile fashion to quickly drive value. And of course, you must enable and sustain this change through an intentional focus on people, culture and change governance.
The graphic below defines Centric Consulting’s point of view around the six key elements essential to successful business transformation.
It is important to note that this does not imply a sequential or waterfall-based approach to address the various aspects of transformation. As companies respond to changing market dynamics, they need to integrate each of the above elements on an ongoing basis:
1. Business and Customer Insights
It is imperative to know where you stand today to transform your organization. Based on the rapidly changing nature of customer expectations, technological advancements and new competition, where you stand can shift in the blink of an eye. As a result, companies must gather and process real-time business and customer insights and effectively leverage these analytics to feed both planning and operational activities.
2. Vision and Strategy
Companies can no longer rely on three- to five-year strategies (or even one-year strategies) to guide their organization. Dynamics change too rapidly. While you still need a North Star to guide your organization, it can’t be so rigid that you can’t make adjustments based on current and future business drivers.
3. Business Architecture
Companies must inherently build agility into their process designs, organization structures, workforce and technology infrastructures to enable adaptive change. So, each of these elements must work together cohesively to ensure you can continue delivering world-class capabilities as business requirements change.
4. Agile Value Delivery
Organizations must continuously and incrementally deliver value to the marketplace. Business and IT teams must collaborate closely to provide new business capabilities at an accelerated pace. To do that, your company must leverage agile and modern software delivery techniques that can help you create and bring new products and services to the market.
5. People and Culture
Without a focus on people, your organization can’t effectively transform, let alone transform with an agile mindset. Companies must build change leaders across their company and establish a culture of change that engages all employees.
6. Enterprise Portfolio Management
Enterprise Portfolio Management (EPM) historically received a bad reputation due to a bureaucratic way of doing things. Today, EPM emerges as a strategic business capability required to accelerate strategy execution and value realization — not hinder it.
Based on today’s business climate and increasing pace of change, business transformation is no longer a periodic or every five– to– ten–year initiative. Companies must take an agile mindset toward business transformation by building agility across all aspects of an organization.
However, we know building business agility and driving ongoing business transformation is complex and a big undertaking for any company.
To learn more about every aspect of a business transformation, and how to implement it, read our in-depth guide, “Rethinking Business Transformation: Build Business Agility Throughout Your Organization To Keep Pace With Rapid Change.”
Companies that can pivot quickly in transforming their business will have a significant competitive advantage. Those that don’t may cease to exist.
Want to learn how we can help with your business transformation efforts?