Managing Partner, Deloitte Ukraine
Have you noticed to what extent business conditions have changed? Over 100 years, the average operation expectancy of companies on S&P 500 has decreased from 67 to 15 years. Young startups are capable of conquering the world in a matter of years. A series of weighty reasons to support the statement that business has begun its transformation can be continued. However, now there is no doubt that we should not waste time thinking hard, we have to act.
Business transformation is worldwide challenge No1 both for big international companies and small and medium-sized businesses. The Industrial Revolution 4.0 has touched all areas of work. The penetration of technology has been changing production and business processes. Generations Y and Z dictate new rules which modern business must take into account to be able to hire and retain the best. In particular, these are a favorable office environment, sufficient flexibility of working hours and a high social mission. Deloitte's research shows that the number of companies for which the importance of their social mission prevails over financial results continues to grow.
What to start with? There is no straightforward answer to this question, and owners must make their choice based on their own needs, available resources and priorities. My personal source of inspiration for initiating changes and making the first step was Frederic Laloux's book "Reinventing Organizations". The book describes five evolutionary stages of the organization's management model: Wolfpack, where the whole organization is based on the personality of the leader; Army, which has a clear vertical of power, well-established processes and a stable structure; Machine, a stage when a company has highly efficient business processes and aims at success and innovation; Family defines a global goal for itself and is not guided solely by profit, uses financial resources as an instrument for the realization of corporate values. The highest level - Living Organism - has high level of self-management, with each employee initiating an action.
All five evolutionary stages are quite different but it is normal for a company to be at several levels at once. For example, when the HR team is closer to a family while those in finance are an army.
Transformational changes in Deloitte took place at different stages, hence a combination of a machine, a family and a living organism. At the heart of our company are the values shared by employees, we care about the well-being and health of our staff, and we have our own Deloitte Garage start-up headed by Chief Innovation Officer, which helps us and our clients innovate and live in a new way.
Before making the first step towards change, it is necessary to honestly determine at which stage your organization is. Then you should set the goal, evaluate your capacity and resources. Move confidently and do not hurry. Do not try to skip an evolutionary step because you risk losing time, and then you will still need to come back. Do not be afraid of experiments and failures because this experience will be useful to you.
Partner, Transaction Support Leader, EY Ukraine
The ability to constantly find time and resources to innovate and advance processes is critical to business success. The times when stability of a business was based on its many years in operation and traditions are gone. Companies which want to bring their performance to a qualitatively and quantitatively new level must identify opportunities and challenges and apply them appropriately or respond to them.
Note that business transformation is a fairly broad concept but in this case, we are talking about a profound reorganization of business processes, technology and management systems aimed at achieving ambitious results and leadership in a particular field.
The most valuable aspects of our work are access to information at the global level through the international network and communications system, and the ability to share knowledge and experience with customers to help them change and grow. Consulting involves daily contacts with clients and partners, which enables us to learn about the latest industry trends, ideas and innovative solutions. EY's innovative resources include technological hubs located in different countries, startup accelerators, various digital technologies and tools in which the company invests, including collaboration with technology companies. But, first of all, the company pays attention to the engagement and development of talents, and we strive to attract employees with different backgrounds and skills that can think out of the box and find new ways to solve business problems. Essentially, EY works as a great business improvement laboratory.
Given our experience with innovation leaders in various sectors of the economy, we would highlight the following key factors for successful transformation:
Goal and objectives
It is necessary to formulate the goal and specify the targets of transformation. Certainly, in order to be able to set truly ambitious goals, the management team should be aware of trends, innovations and competitors' actions which can affect the business. At the same time, one must be able to filter out important information – something that may be useful to the company – from the general flow.
Planning, investment and resources
Certainly, the development of a transformation plan is a priority task of the management team. They need to understand how the company's business processes are organized in order to plan detailed steps that will lead to the desired changes. In addition to the plan, it is necessary to have resources for its implementation. Otherwise it will be impossible to achieve the set goals right from the start.
Both shareholders and employees should be involved in transformation at all levels. Everyone needs to understand the goal and their roles in this process.
This item is closely connected with the previous one because the process of change may seem unclear, unpredictable and intimidating without effective internal and external communication. It is very important for participants in the process to have confidence which must be built on competence, shared responsibility, mutual values and fair rewards.
Monitoring of achievements, adaptability and flexibility
A company must have a quality management reporting system which provides timely information for decision making. Introducing innovative approaches, it is important not to get carried away by the process but to pay proper attention to the dynamics of indicators and respond accordingly to any unexpected developments.
Photo: provided by Andriy Bulakh, Larysa Marchenko, shutterstock.
Author: Natalia Kyrylenko.