The environment organisations operate in is far more unpredictable than it was even five years ago, with disruption arising from all parts of the market and value chain.
As Matthew Bishop of the Economist recently said;
“the pace of change will never again be as slow as it is now”.
Phrases such as “digitization”, “globalization” and “big data” are blurring the lines creating incredible pressure for organisations. At the same time technology is changing consumer behaviour, providing greater transparency, empowering start-ups and through social media giving voice to anyone who wants it. This is the perfect storm; (and that is before we think about the Brexit).
As a result, the traditional sources of competitive advantage such as market position, scale, brand are diminishing or as the likes of Blockbuster or Nokia have found out, become obsolete. The outcome is that traditional, dominant players are increasingly overtaken by nimbler organisations with stronger business models which can better compete and cope with change.
In this shifting environment, organisations simply must transform, which could mean a fundamental change in strategy, operating model, people, processes and culture. For some organisations the urgency is high; for others, it is an ongoing adaptive process. In both cases though, the transformation fundamentally alters the trajectory of an organisation, it is a profound change.
Typically, a transformation was perceived as a really radical business solution indicating that a company had really significant problems. Often, it may have been foreshadowed with a degree of drama such as receivership, a dramatic market share loss or a profit downgrade. A transformation then, was the last chance to change the trajectory of an organisation, who really has no choice but to change. This perception is outdated.
The reality is the earlier an organisation understands the environment and transforms, the better the potential outcome. Indeed, leading organisations who are transforming are those who are pre-empting the market and use the opportunity to reinforce their competitive strengths.
Equally important as well, is that transformation is a process of evolution, not a onetime event, as the environment will continue to change, and the speed of change will get faster and faster.
Therefore, transformation is in fact, “always on”, and requires a series of interdependent initiatives that allow change to happen. For this to happen an organisation then needs to have the right culture, be change ready, and have a great understanding of the environment. An organisation must though, have the ability to act, because once there is a degree of drama, the entire conversation will change.
In the future, what will make organisations stand out, is not their ability to deliver transformations, but those who can make transformation, a real competitive advantage.