With the onset of the Covid-19 pandemic, companies had to combat extraordinary challenges. Globally many enterprises tried to pivot and survive by taking measures like cutting costs, slashing headcount and pausing investments to preserve cash. However, businesses would need to make a few fundamental changes to flourish in the Next Normal.
To prevent unnecessary costs from creeping back, companies must truly transform on a cellular level to enhance financial performance, build capabilities, and change culture in order to navigate the present crisis and sustain growth in the coming years. Given below are four key elements of true transformation that are expected to pay off big time in the upcoming decade, as suggested by a McKinsey article.
The scale of a transformation is a big factor in determining its success. Bringing incremental changes does not qualify as business transformation. Companies must go all in, revolutionizing past processes and implement innovative ideas. Larger the magnitude of the undertaking, better are its chances of driving a highly successful transformation.
According to McKinsey research, over 40% of an effective transformation’s value comes from growth initiatives and not cost cutting strategies. McKinsey and Company’s Senior Partner, based out of Los Angeles, opines:
“The companies that are doing transformation right have an all-in mentality from the start, incremental change is not their story.”
Speed is one of the most distinct traits of a successful transformation. The sense of extreme urgency helps companies to move fast during transformation. It helps in scoring early wins by swiftly unlocking employee ideas and facilitates better utilization of working capital. Speed allows an organization to have the required stamina to implement the difficult aspects of transformation.
Moreover, in today’s fast changing world, faster implementation of transformation is a necessity. Once the vision of the transformation is locked, the sense of urgency must be created with the support of data. Implementing the transformation as fast as possible contributes immensely to the success of the vision.
Share your vision
“You need to develop a transformation story that creates lasting connection to the change you want to see.”
– Melissa Arnoldi, CEO, Vrio.
To pull off a swift and effective transformation, there should be one vision with crystal clear fundamentals and a completely transparent approach. A successful company transformation is driven by the base level employees of the organization, as a distinctly different approach of working is required from the workforce for the transformation to be successful.
The top leaders of the company must convince the employees to truly believe in the transformation by being transparent about its need and revealing the difficulties that might crop up during the course of implementing the required changes. This will help in garnering employees’ comprehensive commitment for the cause.
When the vision of transformation is set with an aspirational tone by the top leaders of the company, it inspires the people in the lower rungs to surpass their capabilities. To achieve the best outcome from a transformation, a major shift in company culture is required – companies must strive to create a culture of growth and performance, where employees are given clear guide-points about the transformation. Investments must be made in the people; and resilience, collaboration, smart risk taking, and transparency must be rewarded.
Several researches demonstrate that about 70% transformations that are undertaken, usually end up in failures. But today’s business leaders have a chance to flip that story by making bold moves, acting fast, setting and sharing a clear vision and stretching aspirations.