Five Key Phases of a Successful Business Transformation Journey
Whether you’re looking for a comprehensive business revamp or just striving to take your company’s operations to a new level, transforming your business is a challenging, multifaceted journey that takes you into unknown terrain. Comprehensively planning, preparing, and executing your transition in five distinct phases significantly increases your chance of success.
Most corporate leaders have come to realize that fundamental business transformation initiatives will be inevitable as their companies are facing rapidly changing economic and social environments. Many of them will already have a clear understanding of the direction they must move in to improve their business. The challenge, however, is in successfully orchestrating that change. As with other complex tasks, mastering this challenge requires doing the right things in the right order.
Transformation journeys typically follow five distinct phases: envision, explore, prepare, execute, and accelerate. If conducted thoroughly, whereby all relevant aspects are considered and integrated in each step of the journey, following these phases will minimize your risk of failure. Focusing on certain areas of action while ignoring others is not an effective game plan for success.
It is necessary to elaborate the contents of these five phases holistically to gradually build up momentum, secure stakeholder commitment and support, and ramp-up your transition activities. In many ways, this is an iterative process that will include shifting back and forth between the phases to incorporate additional insights. But don’t be afraid to pivot. Indeed, look forward to it.
(1) Envision – defining the purpose of your transformation
Vision statements are used to help enterprises communicate their fundamental purpose and goals to stakeholders. By creating an appealing image of an aspirational future, compelling vision statements inspire action and provide guidance and direction.
In the context of transformation, companies benefit from developing and communicating a specific, change-related transformation vision. Executing change in a corporate environment commonly induces a high degree of insecurity for many stakeholders. The better you can communicate the underlying purpose, goals, and benefits, the more buy-in and support for the change you will get from all involved parties.
Methods and tools like Business Model Innovation and Value Proposition Design will help you develop a thorough and robust image of potential future business. However, an effective transformation vision not only depicts the target but also outlines the path forward. Moreover, it communicates (perhaps implicitly) the benefits to all involved parties, convincing them that it is worth the effort and investment. Therefore, ensure you have a clear, holistic vision of where you want to go, why this change is necessary, and what’s in it for your stakeholders.
Take the time to create a comprehensive, focused vision for your future business, and believe it is possible. Confidence begets confidence.
(2) Explore – laying out the transformation strategy
Once you know where you are headed, it is important to explore the building blocks of your transformation initiative. Consider all areas of action within the context of their dynamic environments. Moreover, uncover and evaluate the mutual interdependencies among the various building blocks.
For example, corporate leaders may ask themselves: In which way do I need to change how our company addresses the needs of customers? From that question, think a couple of steps ahead: What does this imply in regards to the technology you use? Do you need to educate and enable your staff to work differently? Do you have to adjust your organizational structures?
These questions may seem obvious, but it is essential to visualize these relationships. Otherwise, some of these connections may be overlooked during preparation and execution.
Embarking on a transformation journey typically means that you are planning for the long haul. When developing your transformation strategy, it is also important to bear in mind that external developments continue to influence and impact your transition.
New technologies may render your current approach to digital transformation short-lived. Social developments (like the fall-out from COVID-19) can have vast impacts on employee behavior and expectations. And existing competitors or newly-entering rivals may unexpectedly advance, leaving you in a detrimental competitive situation.
(3) Prepare – elaborating the transformation approach and roadmap
Strategy without execution is hallucination. And execution without preparation is hyperactivity. The preparation phase is the transformation journey’s key component that ensures that the desired changes are implemented effectively and efficiently—or not.
While the envision phase describes the “why” and the explore phase defines the “what,” the prepare phase elaborates on the “how.” It’s in this stage that you elaborate on which principles (organizational or methodological) you will follow and which practices (Design Thinking, Lean/Agile) you plan to apply in each area of action. Here is, also, where you prime the grounds for execution.
Again, in order to ensure a successful, end-to-end transformation, the principles and practices applied in the various areas of action must be aligned and integrated. Experience shows that initiatives to implement new ways of working are bound to fail if they are not comprehensively addressed. Ignoring certain aspects of a transition, such as the people-side of change, can significantly harm the success of your initiative.
Understanding the principles behind tools and practices enables you to better define the interfaces among different methodologies. This, in turn, will allow you to develop a sustainable roadmap for your transformation journey.
(4) Execute – integrating strategy with reality
As soon as you’ve concluded your preparation and have defined your transformation roadmap, you are ready to go.
Now change management will become the name of the game: educating and enabling your organization will be central to implementing and enforcing the necessary changes. Proven methodologies like the Prosci® ADKAR approach can be extremely valuable in building the momentum and support required on a stakeholder level.
In essence, this is where executive gravity will make all the difference. By actively and visibly leading the change, top management becomes the catalyst for success. Spearheading transformation initiatives with personal involvement, passion, and empathy holds great leverage and shows the genuine concern of corporate leadership.
(5) Accelerate – iterate, learn, pivot, and repeat
So, you’ve got your transformation journey well-planned and successfully kicked-off? Good. Now make sure that you’re not losing ground or get stuck.
Modern organizational models embrace change and account for it by implementing continuous inspect and adapt cycles. It is important that you are not doing so on operational levels only. Set a visible example by transparently inspecting and adapting at the top level of management. Make sure to regularly review all relevant areas of action and integrate the entire C-level leadership team in doing so.
Assess the progress across the various building blocks by discussing the following questions within your enterprise leadership circle:
- Is your refurbished business model still feasible?
- Are your strategic changes effective in reducing organizational waste?
- Is your technology stack state-of-the-art and generating the value expected?
- Does your HR approach succeed in hiring the right people and developing the required capacities and capabilities?
- And most importantly: Does the integration of principles and practices ensure that all relevant areas of action are addressed and developed comprehensively?
If the answer to those questions is “Yes”—superb! Continue. If not, repeat.
Navigating your transformation journey with a structured, coordinated approach will help ensure you and your business transition successfully. Our Transformation Board will work with you to comprehensively elaborate on each phase of the transformation journey by consolidating and visualizing, and integrating the various areas of action with external influences. Designed as an easy-to-understand, easy-to-use concept, the Transformation Board will become your go-to tool to quickly and easily ensure you’re right on track.