This post begins our series on business transformation and explores the differences between change and transformation as a way of opening up the discussion on the best approaches for business leaders and business consultants engaged in transformation efforts.
Over the next few posts, we will explore:
- Drivers of Change and Transformation – Why organisations take on Business Transformation
- Keys to Business Transformation Success
- The Role of the Business Leader in Transformation Success
- And many more aspects of change and transformation
“It must be considered that there is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle, than to initiate a new order of things.” ~ Niccolo Machiavelli, in The Prince
Machiavelli’s advice stands true for both change and transformation in the 21st century. As a consultant or business leader who has attempted one or the other, I’m sure that you will agree wholeheartedly with me on this one.
We Still Don’t Know the Difference Between Change and Transformation, lamented a 2015 article in the Harvard Business Review.
Many among us still don’t.
Many people use ‘transformation’ when they mean ‘change’. Maybe because it’s become the latest buzz word!
However, change and transformation are not interchangeable.
They are two different things.
And unless and until we understand the differences, we cannot go far with either. In the absence of that understanding, we cannot persuade others to go along on the journey, or even get them to begin taking the first steps.
So, whether it is change or business transformation that you or your clients seek, let us begin by understanding the differences.
What is change?
Change is about looking back, looking at the present and coming up with a desired future state. In change management the “focus is on executing a well-defined shift in the way things work” in a limited area or organisation wide.[1]
In managing change, success is measured by how much better that future state is from the present one. How much better off are you after the change? And in giving the answer, everything is perfectly comparable and measurable.
That is not always the case with transformation.
What is transformation?
The butterfly is a transformed caterpillar. Metaphorically, transformation leads you to an entirely different being altogether. PwC defines transformation as “a major shift in an organisation’s capabilities and identity so that it can deliver valuable results, relevant to its purpose, that it couldn’t master before.”
Think big with business transformation, says Deloitte with a view “to generate new value — to unlock new opportunities, to drive new growth, to deliver new efficiencies.”
Doing so may involve taking a fresh perspective on business processes, business model, business domain and cultural and organisational level business practices and approaches.
Let us know what you think – do you agree with this perspective or not?
Feel free to open up the discussion by sharing your experiences in business transformation and change management efforts so all of us can benefit from the discussion. As always, many heads are better than one.
Change and Transformation – Similarities and Differences
Part of the confusion about change and transformation comes from not appreciating their differences. Although there are many similarities between change and transformation, it is the differences that stand out.
Let us explore how the two differ in terms of:
- Measuring results
- Their scope
- Where change or transformation efforts can and must begin
- The interdependencies between change and transformation
Measuring results
You do not measure a butterfly by how fast it chomps through leaves; or for the effectiveness of its camouflage.
There can be a vision for the transformed organisation and what it should look like. But the transformation process is rife with uncertainties. It defies clear and easy metrics.
The true potential of a business transformation can only be quantified after the fact, many years into the future from the starting point.
How can you describe and set metrics for the magnificence of a butterfly’s wings or its grace in flight before the transformation has occurred? This is why setting metrics for transformation, especially before it happens, can be difficult if not impossible.
The success of a business transformation can be measured by how different, how agile, how better equipped the transformed business is to face the challenges of the future it faces. But of course, companies and stock markets being what they are, we still want to see how traditional metrics can be applied to transformation efforts. It has been done, but after the fact. In a future post we will look at how.
Scope and origination
In contrast with transformation, the scope of change:
- Could be incremental, limited to a narrow area or an organisation-wide effort.
- Change could be prompted by wanting to do better, improve results or product, service and process efficiencies.
- And change can be initiated at any level in the organisation. In fact, adaptive changes “are small, incremental changes organisations adopt to address needs that evolve over time.”
When these involve minor modifications and adjustments, managers themselves could fine-tune and implement them within the course of their normal job responsibilities.
Transformation, by definition, requires you to think big.
- Transformation is in fact one strategy for change.
- Organisational leaders may turn to business transformation when they realise that adaptive or incremental changes are not good enough for their business to thrive in a world of disruption and market turbulence.
- Business transformations can focus on business process, business model, domain, cultural and organisational transformations. What we often see are businesses solely focusing on process or organisational transformations. Perhaps that is why many people fail to recognise that transformations can encompass a much wider scope.
- Naturally, thinking big must necessarily be originated at the highest levels of an organisation. Even when an idea comes from lower down in the organisation, business transformation will go nowhere unless there is serious contemplation, commitment and drive that comes from the top.
Interdependencies between change and transformation
Change management can happen without transformation. But transformation, due to the broadness of its scope, would necessarily depend on multiple projects and change management initiatives for its success. In that sense, change management is a subset of business transformation.
The way forward
As you can see, there are more differences between change and transformation than there are similarities. And our entire approach to transformation needs to appreciate and be based on that understanding. When we call any old change effort a transformation, we are giving high expectations and promising more than we can deliver.
We are setting ourselves for failure.
And we are undermining the true scope, value and benefits of business transformation endeavours.
In the end, what really matters is determining whether what you want done in your business, or your client’s business is a change effort or a business transformation project.
In the next post, we will look at why companies take on business transformation and what compels them to do so.
Share your thought with us
Feel free to open up the discussion by sharing your experiences in business transformation and change management efforts so all of us can benefit from the discussion. As always, many heads are better than one.
[1] Ron Ashkenas.. Harvard Business Review. January 15, 2015. https://hbr.org/2015/01/we-still-dont-know-the-difference-between-change-and-transformation
