These days, organisations have no choice but to transform themselves as they follow a new map of reality. Israel Berman provides some pointers on how to prosper on this journey of discovery.
For many years the business community has been talking about the need to change, what should we change and how do we change? The trouble is that changing what already exists is focused on the past. Change means altering something in some way and improving it, in the same way we change our clothes. Many people in business are accustomed to problem solving by looking closely at a problem and correcting it. But you are improving the past, which is no longer relevant. It has become something else. Instead, we need to shift our mindset from change to transformation.
Today’s leaders have the privilege of being present in a defining moment. We live in exciting times. The business community is going global, getting bigger, collaborating and removing obstacles. Communities are strengthening and becoming more nationalistic at heart. We are facing a new economy and a new map of reality. The centre of economic gravity has shifted. The West no longer dominates the East. China has transformed and built a powerful middle class from nothing in less than a decade and this is not the only example of this accelerated pace of development.
Understanding the implications of this shift is fundamental for all boards if they are to understand how significantly and rapidly the world has moved and is continually moving. It is easy to get left behind. And yet if boards are to succeed in the role of guiding an organisation to deliver long-term value, they must keep pace with the world beyond the organisation to understand the amount of transformation needed and to lead the way along the journey.
The notion of transformation and how it is different from change is not well understood. Transformation itself has transformed. In this new world, a successful leader with decades of experience and an impressive track record is now struggling in a completely different arena where the rules of the game have changed. The competitors, definitions of markets and ingredients of success are all different.
The difference between a successful business and a less successful one is not in its strategy. The truth is that most business strategies are not that different from one another. The differentiator is in the proportion of the strategy that is implemented successfully — how much of the plan is turned from a board presentation to reality. This is the biggest challenge for boards wishing to transform in such a constantly volatile and dynamic business environment.
The number of organisations that have successfully implemented a strategy of transformation, dismantling what was and creating something new, is not high. Having the right plan – deciding what you want the organisation to become – is not the critical factor. Most businesses with solid plans fail because they are not organised the right way to deliver what they want. They have a good plan, structures and processes, but when you look at their operation holistically, it is not aligned to executing the plan. Some actually encourage the wrong thing and they don’t understand why it doesn’t work.
We have a tendency to “over plan”. But transformation is not going to be perfect. You are starting the journey and you cannot see the end. You begin moving towards the goal, and you continue to transform as you go. Gone are the days when you need a 10 year strategy. Now a one year strategy may be too constrictive. Instead, you need agility more than a long-term plan. If you are not flexible enough to see what is going on, or you’re not courageous enough to take risks, you’re in the wrong business.
Organisations that have successfully transformed have not done it merely by changing their brand identity or launching a new product. To truly transform means to move towards an unknown outcome, to change modes of working built over years, decades or even centuries. People have to transform as well.
People are at the heart of transformation and it is always the leaders and people at every level that prove the difference between success and failure. We can change our clothes, but transforming ourselves from the inside out is not so easy. Organisations that want to turn a transformation plan from a Powerpoint presentation to reality will discover that changing people’s behaviour and mindsets is a fundamental challenge that has to be overcome.
For this reason, boards play a crucial role. The board is the enabler, creating the right ambience, demonstrating patience and looking forward to pick a route to go down. Leadership is vital, because whatever path you choose, you need to follow it through. Fear is not a plan. No one has the option not to transform – it is just how fast, how smart and what direction you are going to take. It is not important to be an expert. Instead, simply ask what it is that people – our customers, our stakeholders and ourselves – actually want. In a mature market, with increased competition, what people want from your organisation is for you simply to be more relevant and meaningful in their lives. The role of leaders is to inject passion into this simple mandate and tell a compelling story that excites people.
The journey of transformation is a long-term journey of discovery. There are no clear answers and no formulae to follow. It takes courage and patience.
Already a member?
Login to view this content