“Without leaps of imagination or dreaming, we lose the excitement of possibilities. Dreaming, after all is a form of planning.” – Gloria Steinem
Visioning is the first step to your business transformation. In doing so, you can take one of two alternate pathways: going big or going for minimum viable transformation. We discussed how in our earlier article (Part 1) so that it gives us a head start in transformation success.
In this post we continue the discussion.
Having a good plan is key
A plan for business transformation creates a road map, together with an executable plan with resources, both financial and human. It lays out the roles and responsibilities and metrics that are necessary in implementing the project of business transformation.
Good management is critical for success in business transformations.
McKinsey has defined five stages or “frames” of transformational change:
- Setting goals (for both performance and organisational health),
- Assessing organisational capabilities
- Designing the transformation initiatives
- Executing those initiatives
- Sustaining the changes that were made.
According to the authors of Beyond Performance: How Great Organisations Build Ultimate Competitive Advantage, companies that took action on all of these five frames achieved a transformation success rate of 72 percent.[1] Although this book was written in 2011, the authors are addressing the heart of why business transformation are necessary in the first place:
“The organisations that learn are able to keep finding new sources of value and capturing them more quickly and effectively than their peers, creating the ultimate competitive advantage...” The book uses the analogy of a marathon runner to explain the five frames in action.
The 2019 version, Beyond Performance 2.0: A Proven Approach to Leading Large-Scale Change, “more than doubles your odds of successfully leading significant, sustainable change by applying equal levels of insight and rigor to the “hard” and “soft” elements that matter”, says a McKinsey review.
There is more to it than planning
Going back to basics, whatever that you plan, big project or small, it is necessary to address all relevant parts of the organisation and its environment. Looking inside, if we borrow from the McKinsey’s 7S framework, that means addressing strategy, systems, structures and the people aspects: staff, skills, style and shared values. We will discuss the people aspects of business transformation in a separate post.
The other thing you must add into the mix is resources, which translates to time, money and effort.
However, before you can get to the implementation stage, all of the changes that precede the transformation must be carried out by people already within the organisation. This is true even if you get new hires to dedicate to the transformation project.
It is when considering the time and effort that business transformation calls for, that contextual ambidexterity comes in.
What is contextual ambidexterity?
Ambidexterity in a person, as you know, is the ability and agility to use both hands. Organisations, similarly need to become good at two things:
- Carrying on the present revenue generating activities effectively.
- Seeking and developing new revenue generating activities and areas.
If your business has mastered contextual ambidexterity, it means you are able to carry on the regular operations and work on projects for generating future revenues—such as your planning of the business transformation —simultaneously.
This is not easy. In fact, it can be quite challenging. But those companies that master these two divergent priorities are the ones that grow their revenues, and prosper, way beyond those that do not.
If you want your business to succeed in your business transformation effort, you have to look at how you and your team can cultivate the ability to handle current operations and work on the transformation work without dropping the ball.
Share your thoughts
We will discuss more on keys to successful business transformation in the next article.
In the meanwhile, consider whether your business has the contextual ambidexterity you need to transformation success. How can you cultivate it? We invite you to share your thoughts in the comments.
[1] Scott Keller and Colin Price, Beyond Performance: How Great Organizations Build Ultimate Competitive Advantage, first edition, Hoboken, NJ: John Wiley & Sons, 2011.
