As the magnitude and speed of technology-led disruption increases, and the barriers between human and machines are eliminated, continuous incremental change is no longer enough for organizations to remain competitive and customer-relevant. Transformation is the new normal, and it’s not a one-time event. Organizations—and people—need to be prepared for continuous transformation, and new capabilities will be required for success.
Transformation requires a two-speed approach to business
During transformation, an organization has two areas of focus. First, effort and energy are required to continue to run the existing core business to generate revenue and ‘keep the lights on.’ At the same time work must be done to reimagine and reinvent the business or operating models and/or customer/employee experiences to achieve transformation goals.
At the beginning of a transformation more resources will be focused on the core business. Overtime as transformation progresses, that balance will shift. As opportunities identified throughout transformation are acted on, legacy business activities and processes will be retired, and a newly defined business/operating model will become the new normal. The cycle then repeats, often with pressure to shorten transformation timelines.
Leaders need additional capabilities
To thrive in this type of environment, leaders need to evolve their capabilities. What has been required to succeed in a ‘business-as-usual’ environment where incremental change and continuous improvement are the norm is not enough to drive transformation. Transformation requires additional leader capabilities.
For example, knowing the business and applying an owner’s or growth mindset won’t achieve transformation goals. Leaders also need to be able to navigate ambiguity and take calculated risks to make assumptions about future business conditions and customer needs. Setting strategy and identifying supporting tactics is no longer enough. Leaders need to be able to reimagine the business, create a vision of a bold new future and ensure that the entire organization is committed to and participating in experimentation and iteration to achieve the goals (see Figure 1: Foundational and Transformational Leader Capabilities.)
Figure 1: Foundational and Transformational Leader Capabilities
Front-line participation is mandatory
As transformation is planned under considerable uncertainty and ambiguity, and achieving goals requires experimentation and iteration, ensuring the participation of the people who actually do the work, and will likely be the first to spot problems and opportunities, is critical. Front line employees need to have a clear understanding of the transformation vision, and their role in the process. They will need to commit to the journey without fully understanding what the end state will look like, and co-create the future. Organizations need to invest in developing capabilities like creative thinking and problem solving, learning agility, self-awareness and resilience to ensure that employees can productively contribute.
Managers – the translators in the middle
As leaders will be pushing ideas down to managers for implementation, and managers will be working with employees to push ideas up for consideration and/or implementation, they will need to act as an important translator or conduit between ideation and implementation that flows in two directions. As an implementer, the manager needs to ensure that they work to prioritize the highest value initiatives to avoid straining resources, and identify the best resources for their projects. They also need to keep employees excited and productive throughout continuous change that includes a great deal of ambiguity.
Managers will need to extend their capabilities as well (see Figure 2: Manager Foundational and Transformational Capabilities.)
Figure 2: Manager Foundational and Transformational Capabilities
Improving transformation outcomes
Getting started on either building or maturing transformation capabilities can seem like a daunting task, and it can be difficult to know where to focus. There are a few mission critical activities that will provide a significant return on transformation efforts:
- Update your internal competency models and job profiles to reflect Industry 4.0 realities where:
- Transformation is continual,
- Data is abundant and must be properly leveraged,
- Technology plays a more significant role in driving organizational performance,
- Jobs need to be adapted to focus on the work/tasks that people can still do better that technology.
- Understand your organization’s readiness to start or succeed in transformation. If employees lack confidence in the ability of the organization to reimagine and reinvent itself to succeed in the volatile, uncertain, complex and uncertain world, it will be a challenge to get the participation required for success.
- Assess the capabilities of your leaders, managers and employees to contribute to transformation and put solutions in place to close any development gaps that exist.
- Focus on transforming your culture by putting processes in place to build speed, improve collaboration, be courageous, and capture and use knowledge.