Years of research on business transformation have shown that the success rate for these efforts is consistently low: less than 30% succeed.
Moreover, only 16% of respondents say their organizations’ digital transformations have successfully improved performance and also equipped them to sustain changes in the long term. An additional 7% say that performance improved but that those improvements were not sustained.
Often, lack of employee communication, engagement and alignment with the new goals are the main reasons for such a high failure rate.
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In this blog, we will go over some of the best practices for implementing business transformation successfully in 2020.
The Definition of Business Transformation
Business transformation is all about identifying techniques, new processes and technologies that aren’t being used to their maximum capacity. It requires understanding about how alternate solutions can be applied to further gain market share, increase revenue and customer satisfaction or reduce operating costs.
Organizations undertake business transformations to create additional value. This may mean unlocking the potential of employees, harnessing intellectual property and proprietary technology for additional purposes, or becoming more efficient to maximize the company’s potential.
The goal of every business transformation project should be to ensure that the best processes and systems are being implemented within an organization.
For many organizations, this is not a simple process, particularly within the organizations that have a mindset that fears change. Therefore, how you deal and communicate with employees dictates how successful the transformation will be.
6 Main Dimensions of Business Transformation
It is very important for organizations to focus on the main business capabilities that have a direct impact on how successful business transformation will be.
In reality, only a small number of total capabilities play a critical role in helping the organization find new ways to differentiate, gain competitive advantage and compete. Focusing on those critical capabilities can help deliver greater value and help the organization realize its business transformation ambition.
The Deloitte Capability Hexagon provides a comprehensive approach to defining and designing enterprise capabilities across six dimensions:
- Mission. The purpose of a capability, how it will operate, and what value it will deliver. The mission is derived directly from—and supports—the company’s strategy.
- Insights. The decision flow, information, and analytics that drive informed and timely decision-making.
- Integration. Clear roles, decision rights, and policies that facilitate integration within and across other capabilities, functions, and partnerships.
- Processes. An integrated and efficient set of processes designed to achieve the desired outcomes.
- Technology. The software, hardware, and tools required to enable the capability.
- Talent. The competencies, skills, talent infrastructure, and workforce planning that enable an optimal talent base to execute the capability. This broader viewpoint allows organizations to frame and link execution to the value defined in the transformation ambition.
14 Steps to Succeed in Business Transformation
As many business transformation initiatives fail, we have put together the 14 main steps organizations should follow before and during their business transformation efforts.
1. Evaluate your existing business situation
Before going into a business transformation projects to tackle challenges, you need a clear view of how extensive those challenges really are.
Depending on the scope of your business transformation project, it may be necessary to evaluate all of the current workflows, procedures, policies, and practices used in the various functions, business units, divisions or departments you’re looking to transform.
Only after you have a clear picture of your current processes and bottlenecks, you can better understand how new technologies and processes can eliminate the biggest business challenges.
2. Get executive buy-in
Because of their complexity and the resources needed, business transformation initiatives can be a hard sell to upper management. But because the C-Suite plays a pivotal role in defining the company culture, core values and goals, it is crucial to prove the long-term benefits of the business transformation.
Once they are convinced about the benefits, they are much more likely to be a powerful ally in communicating the role of business transformation in setting and reaching organizational goals across the organization.
3. Get employees’ buy-in
After you get the executive buy-in, the next crucial step is to get your employees’ buy in. In order for employees to collaborate in the process and align with your business goals, they need to understand the benefits of your business transformation efforts.
Employees need to understand why those changes are good for them and for the business. Only then you can expect employees to work towards the same goals.
Proper internal communication is extremely important here. Employees need to feel informed and well aware of how the changes will influence their jobs and lives.
4. Engage all employees into daily conversations
In order for business transformation to succeed, employees need to understand what is going on in your organization before, during and after the changes are being implemented.
The best way to do so is by engaging your whole workplace into daily company conversations. This doesn’t mean sending a newsletter announcement to all of your employees. This means creating dialogues and two-way conversations where employees can freely express themselves and share their thoughts.
Even though this may seem easy to achieve, many organizations are struggling to create such culture, and the biggest culprit for that is the use of wrong internal communication technology such as email and intranets.
On the other side, the implementation of new employee communication technologies that ensure easy access to important information and support two-way employee communication, can make your business transformation efforts more streamlined and successful.
5. Focus on your communication strategy
As cited in Purchase Control article,
“Digital technologies are powerful tools, but they require human intelligence—and enthusiasm—to be used effectively. Without informed and engaged team members across the organisation and a long-term digital roadmap built on supporting company ambitions in the digital world, even the most ambitious digital transformation strategy will fail.”
Therefore, from its inception, any business transformation project should be founded on clear and constant communication between the project team, management at all levels, and the organization as a whole.
Efficient communication ensures everyone is in the loop and it helps employees understand their specific roles and the availability of resources to help them achieve their goals.
In addition, continuous communication helps build a spirit of collaboration, encourages employees’ voice and ensures everyone has the information they need to address any frustrations, roadblocks, or other challenges that may occur.
Therefore, clear communication is critical during business transformation. Moreover, statistics say that organizations that follow this practice, successful transformation is more than three times more likely.
6. Build an efficient change management process
Business transformation means changes within the organization. Therefore, effective change management is crucial during these projects.
Effective change management allows you to track, measure, and analyze the changes being implemented and understand how they are effecting the whole workplace.
Remember that the teams responsible for change implementation have to be very good communicators. Leading a successful change without ensuring that the right information reaches the right employees at the right time is impossible.
7. Set clear short and long-term goals
Setting clear goals and communicating them to the employees is very important during business transformation. Employees need to understand the goals they are supposed to achieve and how they're going to achieve them.
Set smaller short-term goals to motivate your employees, and a few long-term goals or milestones to celebrate with the whole organization.
8. Foster a sense of urgency
Without a sense of urgency, it is hard to motivate and engage employees and other stakeholders to take actions and participate in the transformation process.
Therefore, for business transformation projects to get implemented, senior leaders should foster a sense of urgency for making those changes. This is the practice where good leadership communication is crucial.
9. Eliminate fear in the workplace
Business transformation efforts within organizations can develop emotions of uncertainty and fear. This may cause employees take their frustrations out on each other. Here, internal communicators and managers have the responsibility to overcome the difficulties and resolve conflicts.
A research shows that only 38% of people like to leave their comfort zone. The other 62%, however, are not comfortable with changes.
In addition, many employees think that business transformation projects may eliminate the need for their skills and expertise. This mainly happens during digital transformation efforts where people are convinced that new technology will replace them.
However, according to research, 67.8% of companies report that technology disruption has had a neutral-to-positive impact on job creation. 37.3% report a net increase in job creation because of it.
Therefore, with the proper employee communication strategy, employers need to ensure that their employees feel safe.
10. Enable cross-departmental collaboration
Business transformation is the process in which many different departments contribute and, therefore, they must be able to collaborate and communicate with ease.
Having everyone on board and informed before and during your business transformation process may be a challenge. This is especially true for large organizations with various offices and departments across the world. Therefore, global and interdepartmental communication has to become a priority.
In order to achieve such cross-departmental synergy, you must make sure that your organization has the right communication technology in place.
11. Choose carefully the communication channels you're about to implement
If you are a part of a large organization, you are probably using multiple internal communication channels. Slack, Microsoft Teams, email, intranet, document sharing and projects management solutions... you name them!
These are all various means of communication within an organization. The complexity of this communication ecosystem makes it hard to ensure that all the employees get the information they need to successfully follow the new business transformation initiatives.
Smarp, our employee communication solution, is designed to help companies eliminate this growing challenge. It connects all of your communication channels into a single platform where employees can instantly access, share or comment on important updates.
12. Be agile and encourage new ideas
Organizations that are not agile are almost destined to fail in their business transformation efforts.
Companies that are most advanced in their transformation efforts managed to turn their company culture into an internal accelerator of innovation and transformation.
What's more, over 47% of executives say that they are investing in building a culture of innovation at their companies.
However, it can be extremely hard to embed new behaviors within organizations. To achieve that, employees need to feel free to share their voice and their ideas.
It is the leaders’ and other internal communicators’ job to drive those behaviors through efficient, consistent and continuous communication with employees.
13. Close the skill gap at your organization
Closing the skill gap before and during business transformation efforts is something that most organizations struggle with.
According to research, 90% of jobs are seen to require digital skills in the future. On the contrary, 44% of workers aged between 16 and 74 in Europe do not have basic digital skills.
Therefore, investment in people and new skill development is crucial for business transformation.
Being aware of this challenge, 52% of companies are planning to invest in upgrading employees skills.
14. Measure your employees’ engagement
By now, you have probably understood how important effective communication is for successful business transformation.
However, communication strategy without goals may not bring so much value to your organization. Communicators need to understand the effectiveness and outcomes of internal messages delivered to employees.
They need to understand and measure which messages are the most effective, which channels are the best to deliver those messages, and which employees engage more than the others.
Tracking such data is very powerful when it comes to understanding your employees’ alignment and engagement with your business transformation efforts.
In the past, such numbers were very hard to track. Today, however, internal comms tools like Smarp track your employees’ engagement with internal content in real-time.
5 Main Types of Business Transformation
Business transformation can mean a lot of things. However, there are 5 main categories of business transformation:
- Business process transformation: This type of business transformation focuses on how the things are done within an organization. It usually involves optimization and automation of repetitive processes and procedures.
- Information/data/digital transformation: This type of business transformation focuses on implementing and using new technology to unlock additional business value.
- Organizational transformation: Organizational transformation is a type of business transformation that focuses on the company’s biggest asset — its people. The goal of organizational transformation is to optimize how various departments are staffed and structured. Some of the main objectives include breaking down silos, flattening the organization, enabling better collaboration and people management.
- Management transformation: Organizational hierarchies aren’t always the best for facilitating rapid decision-making and reacting to new company initiatives. Therefore, management transformation is one of the solutions to eliminate this challenge. This process, however, requires socialization, easy access to information, establishing clear communication channels, and the overall transparency in organizational functions.
- Cultural transformation: this type of transformation is probably the hardest business transformation to achieve. As organizational cultures tend to evolve organically over many years, they take much longer than any other type of transformation. A cultural transformation usually requires employees to embed new behaviors and new way of working.
Employee Communication Plays a Crucial Role in Business Transformation
As mentioned earlier in this blog, employee engagement and communication are some of the most important prerequisites for successful business transformation efforts.
Therefore, organizations now must consider implementing new communication technologies to help leaders and employees prepare for the change and work towards the same goals.
With employee communications solutions such as Smarp, organizations are able to:
- Easily reach all employees with relevant information and updates
- Reach all employees regardless of their location
- Create and share more personalized content to drive employee engagement
- Make all the content easily shareable within and outside the organization
- Support two-way conversations within the workpalce
- Achieve a complete organizational and strategic alignment
- Help employees keep important documents, messages and conversations in one place
- Enable employees to have instant access to information on their mobile phones
- Better filter and prioritize content delivery to prevent information overload
Schedule a Smarp demo yourself to see how it can help you drive more digital transformation success.