Business transformation – the art and science of strategic change management

By February 12, 2019Uncategorized

By Yannick Schilly – President & CEO Altix Consulting Inc.

A brief introduction: (2min read)

We are living in absolutely incredible times! The new information and telecommunication technologies combined with a globally interconnected world allow us to see and understand the transformation our world is going through – in real time. Of course, we only get highly aggregated snap-shots, but still enough to see what is going-on on our planet. The WEF – World Economic Forum in Davos is wrapping up after bringing together for a week an extract of the world’s elite, CEO´s of global companies, Champions in the categories of Politics (Presidents and Head of State), Economists, Scientists, Technology Gurus, Media Experts, … you name it. During a week, they stop the time, they stop running in order to reflect, to better see and understand where the world is heading to and to some extent even influence that direction through presentations, comments, discussions and business deals (they won’t stop completely). The speed and the noise in our day-to-day business world can be literally overwhelming and will at times confuse even the best qualified top executives, business owners and their advisors but most certainly everybody else in the organization from, at times, Senior Vice-Presidents to Directors, R&D engineers or sourcing managers, middle management and staff.

The world is evolving at an incredible pace and is at the beginning of an exponential acceleration curve, which means it will only get faster with an increasing level of complexity and volatility. Just look back a few decades and a few hundred years. Innovation is fueled by technology, social and professional networks and an interlinked global economy as well as through market dynamics and competitive pressure. The positive aspect is that our world is getting better (less poverty, less wars, better access to care, medical, food and education, …), the negative is as always technology is mis-used to increase fake news, questionable businesses, new crime types (cybercrime), the rise of dark web and under-regulated crypto-currencies, new political influencing tactics, drugs and depressions …

The beginning of 2019 is marked by accelerating global trends (digitalization, artificial intelligence, electrification, the internet of things and smart devices) as well as a new and increasing risk landscape (global trade risks, geopolitical power games, less multilateralism and more populism, market risks – financial and industrial,…). We are in the middle of the 4th industrial revolution and our world is changing radically:

–       the political landscape

–       the trade landscape

–       the market landscape

–       the technology landscape

–       the business landscape

–       the risk landscape

–       the workforce and education landscape

In summary the entire place is being re-engineered.

The future of everything is being re-designed and re-created, the future of health, the future of mobility, the future of society! It might have always been so in fact, but again with today´s capability we can better see and better reflect it to integrate the dynamics into our strategic planning. Also, remember the acceleration element I referred to, the pace of technology and innovation was never before in history as it is today.

This might scare many of us, a few will accept the facts and try to develop adjusted strategies on individual levels (for their families, lives and careers) but also for their companies or business. Some will take it even further and will be active drivers of the next disruption – somebody works on the next Apple, the next Facebook, the next Tesla, the next Alibaba,…

Best practices: (2min read)

Let’s learn from our Global World Leaders and let´s take some time out to reflect the game and to check a couple of core elements of business model and strategy! Large companies are actively driving business transformations to be prepared for the future of their respective markets and industries. Best in class startups, small companies and middle market champions will do this important work as well, often times partnering with qualified strategic advisors as they do not have access to the same level of internal corporate resources or to the big and often inaccessible giant strategy and consulting firms.

Business models and business strategies are not and should not be set in stone. They are critical tools and methods requiring regular check points, adjustments and in-depth reflections.

–       How are societal changes impacting our business?

–       How is the rapid evolution of science and technology impacting our industry?

–       What, more than everything, is impacting the world of my customers?

–       How do we need to adjust our service offering and competencies to better serve them?

–       Is our sales model still valid, how is it impacted by digitalization?

–       Which role are hardware, software, services and data playing in our business model?

–       How is our competitive landscape impacted by new market players from Tiger countries?

–       How is our product portfolio and our product supply chain impacted?

–       Which changes are required to remain relevant and competitive in the market place?

–       How are our factories impacted by automation and robotics?

–       How does the workforce need to evolve and how do we need to revise our human resource strategies?

–       How and where do we go to market (products and geographies)?

–       Is our pricing model still performing?

You sense it, the number of questions could easily fill many pages, I will spare you that now. Eventually you will have to go through that exercise with your leadership team.

Did you already schedule your time-out session with the leadership team?

Business transformation looks at the enterprise, the business unit, the factory in an integrated and holistic way. Linked to strategic and execution planning, business transformation is the process of managing large scale transformations including the very mechanical elements of the enterprise like strategy, business model and processes, product portfolio, supply chain and IT systems but also at the less mechanical and more emotional elements like people, cultural change, values and principles. Change management is always difficult, it is often scaring us, Owners, CEO´s and Executives as it is charged with risk, as would any enterprise or major initiative, but the risk of missing the boat and departure is higher. The process can be scheduled but should not again and again be postponed into the future. This would ultimately put the company at risk, it will pressurize margins in the short term and upset customers and employees in the long run eventually endangering the further viability and existence of the company.

Take action(2min read):

Business transformation, as well as large scale company initiatives, is not something we do all of the time. We need to educate ourselves about the processes and technics, exchanging best practice with others who have been there and done that successfully, eventually multiple times.

Communication strategies are as critical as the overall transformation strategy and should not be underestimated. The effort is, as well, significant and should be properly planned, evaluated and scheduled through professional project management methodologies. A good intention can easily turn into a disaster if the level of follow-through and management isn´t appropriate, sufficient or unqualified. Find the right qualified external partners and advisors to help you navigate through the process. They will guide you professionally through a multi-stage process of first understanding, evaluating scenarios and strategies, planning and executing change over reasonable periods of time. The professional experts should have a high level of seniority and experience in the subject matter but also in industry. Former, carefully identified, Senior Executives will eventually bring that level of expertise and wisdom and not be too theoretical. Advisors can´t and should not create the strategy as we know our business and industry better than they do, but they can be a strong asset to help us navigate the complexity of the process and bring the competence and the capacity we need for that large-scale initiative. They can help us to get insights into our own companies as employees will often disclose information they will not divulge to their own management. This is critical for ensuring the best results for the new strategy.

What I personally learned over the years, in different cultural environments, in Europe, in China or in the United States, is that people are at the core of change processes. As we are all in the boat, let’s embark everybody on the change journey – communication and alignment of why ? what ? and how ? – across hierarchies and across functions are key for success!

Eventually, you might find out in the process that a business transformation isn´t what you need, just some punctual, strategic or targeted interventions whether fixes or evolutions. This is often the case for market leaders well ahead of the curve and dominating competition with advanced technologies, products and solutions, higher profit margins and plenty of financial power. You as well can be there tomorrow, but you have to get a game plan in place – a roadmap to the future (3-5 years not 15-20). If you already have all the answers, lucky you – you are fine!

About Altix Consulting Inc.

We are your international management consulting partner, providing business strategy, technology and innovation, and operational excellence support, in the world of advanced manufacturing and international supply chain.

www.altixconsulting.com

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