A recently published research study revealed that 3 out 4 transformations fail; meaning the success rate of business transformation is only 25%. So, the obvious question is- How to beat these transformation odds?
Here are four core factors for a successful business transformation-
1. Comprehensive scope & cross-functional initiatives-
The transformation campaign must be strategic, intense, and a well-managed program to enhance organizational performance and boost business resilience.
Further, the scope of business transformation must cut across all functions (of the organization) that impact the business’s topline, bottom line and engage a substantial quantum of workforce.
Tip: Checkout more about workforce engagement here.
2. Cashflow management:
It has been found that forty percent of successful business transformation comes from growth initiatives.
However, what goes unmeasured or superficially measured, risks being mismanaged or even under-managed. Hence, growth initiatives must be measured periodically to guarantee success with business transformations.
Several metrics are available to measure organizational growth. However, I’ve found monthly cashflow management as the most powerful metric for measuring growth and the organization’s overall health.
In addition, optimal cashflow facilitates achievement of larger financial objectives. In fact, cashflow management increases the success rate of business transformation by 130 times.
Business transformation is a marathon not a sprint.
Done right, full business transformation can take from nine to eighteen months or more, depending on the size of the organization, countries of business operations, product mix, work culture, employee base and transformation strategy.
Broadly there are three types of transformation- Breakthrough transformation, Streamlined transformation and Incremental transformation. And the strategy must be designed accordingly. To know more about these three types of organizational transformations check here.
For successful transformations, it is vital to step outside of self-imposed constraints and define what’s truly achievable (i.e. the goal) and then go after it with full steam.
I recommend setting a business transformation target of 75% (instead of 100%) at the outset because it increases chances of success. This goal must then be smartly stretched higher as the business witnesses the fruits of change.
Quick wins fund long-term business transformation ambitions.
Therefore, value stream mapping and identifying low hanging fruits is key. This entails selecting business processes that are easy to improve and have a high positive impact on the topline and bottom line.
In my decade-long experience as a business transformation expert, I’ve found that successful transformation follows a trajectory. Here’s one such example of business transformation success track-
A quick sprint at the start motivates stakeholders, employees and boosts the business transformation campaign mojo.
Besides the above four core factors, a focus on communication, leading by example, engaging employees and continuous improvement can triple the odds of success.
Moreover, the culture of continuous improvement keeps the organizational performance from stagnating (or even regressing) once transformation goals are met.
Are you planning to install a culture of continuous improvement at your workplace?
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