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Sustaining Business Transformation Momentum – 5 Tips!

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The Point: Congratulations on your Business Transformation initiative! You’ve gotten yourself/your organization as a leader to the point where you are taking the steps towards changing how you conduct business — No small feat in and of itself. However, beginning the business transformation initiative is just that — the beginning. What follows will be the architecture of the strategy that falls in alignment with organizational goals, the implementation, and ultimately the monitoring of progress. This post is all about those final stages for business transformation success where you want to sustain momentum. Herein we’ll provide 5 tips to sustaining business transformation momentum… Enjoy!

Tip of the Spear Ventures Sustaining Business Transformation Momentum

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Sustaining Business Transformation Momentum

It may seem obvious that sustaining business transformation is important, and the actions necessary to do so are simple. They are not. This is because companies are often too focused on short-term gains and neglect the long-term imperative. They overlook the difficulties of breaking old habits and creating a healthy, new approach that can be implemented in thousands of daily actions instead of being referred to by a checklist. To maintain business transformation momentum, you will need to develop new skills, be disciplined, and have strong relationships with your organization.

To sustain a transformation, you must embed a “business transformation engine” — A repeatable process that fundamentally alters performance rhythms and decision-making in the company. It’s not about making strategic decisions, but rather about implementing daily initiatives that will change the way the organization works.

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There are five tips business transformation can be built, according to us:

1. See the World from a Different Perspective

It is exhausting to challenge everything, but companies that are open to change never settle for the status quo. They are open to new facts and not content with the status quo. They are vigilant against accepting easily accepted targets.

2. Think Like an Investor (Especially if You are a Private Equity Firm)

Although this mindset isn’t always popular within organizations, it is something that every leader should adopt. Passive employees can kill change in a company, as we all know. Successful employees are constantly challenging their colleagues and not content on just getting along. They don’t settle for a slow pace of decision-making either. They are always looking for new sources of value and how they can contribute to the organization.

3. Assure Ownership is On the Line

Management and outside advisors will have a tendency to set targets during a transformation program. This is what happened with a technology firm client. This should be avoided. Companies with large central teams who have centrally imposed initiatives embedded in budgets without manager buy-in are at greatest risk of falling back to their old ways.

4. Always Work Hard

Companies can easily allow their pace to slow down once they have achieved their initial improvement targets. It is easier to delegate. Senior executives who are unable to focus on high-level targets and don’t get lost in the details, perhaps under the pretext of not wanting to micromanage, should be notified.

5. Address the Underlying Mindsets

In our experience, motivated employees are more productive than those who live in a command-and-control culture. Managers must not only challenge, but instill meaning. Managers must be able to recognize the value of extra effort. They should not assume that employees understand why the company must operate differently in the future.

SUMMARY

These five tips brought into your monthly operational meetings, annual budget discussions, daily management routines should continue to be a part of executives who sustain a business transformation. Leaders that do realize that success in business transformation is not about the scoreboard or whether the organization can deliver $100m, $500m, or both. It’s about whether the process of business transformation has been repeated and replicated in a way that drives better results for the organization long after it is finished.

Sam Palazzolo

The ‘How?’ of Business Transformation

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The Point: In many industries, business transformation or change management programs often fail. We know that business transformation is not for the weak of heart. We’ve seen change leadership in a company not be united and/or committed before, during, and especially after transformations. So are there portions of the business that leaders need to pay attention to? Seriously, not only the specific initiatives but also the changes that leaders are making as to how the business actually works? In this post we’ll explore the ‘how?’ of business transformation in search of a performance infrastructure that is essential for a successful transformation. Once discovered, it will allow you to achieve rapid, dramatic and long-lasting business improvement. Creating an “infrastructure of performance” can help ensure success… Enjoy!

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The Case for Business Transformation – Why?

Today’s business environment is full of disruptive forces. Even in less volatile industries, disruptive forces abound. These disruptions include technological innovation, regulatory changes and pressure from activist investors. Many technology companies — both software and hardware — are undertaking such business transformations. Sometimes they do so in response to external pressure, but other times it is to stay ahead. These companies, regardless of their motivations, are trying to introduce new ways of working for large numbers of employees with the aim of achieving a step-change in business results.

The sad reality is, however, that the majority of these organizations are not able to change. Business transformations more than often fail. Research has shown that 70% of large-scale, complex change management programs fail to achieve their goals. Common pitfalls are a lack or inadequate management support, low employee engagement, poor cross-functional collaboration and a lack in accountability. A major change in mindsets and behavior is required to sustain a business transformation’s success. This is something that very few leaders are able to do.

As practitioners in Business Transformation, The Zeroing Agency — a Tip of the Spear Venture — focuses on supporting such turnarounds and transformations. When it comes to Business transformation, we’ve seen it across all industries, and we know that the hardest part of improving performance isn’t deciding what to do but rather — how to do it. This article will discuss an important component of the ‘how‘ of business transformation: the creation of an “infrastructure for performance” which is made up of people, processes and tools that allow successful execution and sustainable results.

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Performance Improvement Requires a Holistic Approach

Companies in financial trouble tend to be more focused on cost reduction and immediate solutions. Many consumer-focused businesses are able to offer stable and healthy product categories. These companies don’t see transformation as a struggle for survival. It’s about reaching the full potential of the company (going from good-to-great) or responding to external challenges or opportunities, such as learning new ways to win or moving away from a historical money-maker.

We have found that no matter what the circumstance, true transformation occurs when the leadership team accepts the idea that there is a holistic approach to changing the way the business operates. This includes addressing all factors that add value to the organization, such as top line and bottom line. This is not an easy task. Ordinary transformation approaches often produce suboptimal results.

To achieve extraordinary results, we believe a comprehensive, highly disciplined methodology–encompassing both the “what” and the “how”–is needed (exhibit). The “what” refers to the smooth flow of specific ideas and initiatives throughout three phases: planning, independent diligence, and implementation. For the experienced executive, these phases will be familiar. We find that executives are more focused on the individual initiatives than how the company must change. This is a problem that many leaders feel. They express concern about sustainability and execution risk, and know that initiatives won’t stick unless they fundamentally change the way the business operates. How can an organization transform its operating model? The “how” is broken down into two parts: performance infrastructure and change management. Many organizations find change management challenging. We will discuss this in detail in a future article. This article will focus on the performance infrastructure. It is essential for effective alignment, communication and coordination at executive level during a transformation.

Making Change Happen at Speed

Performance infrastructure is made up of people, processes, and tools that all work together to deliver superior execution and value. It is the heart of a transformation effort, and plays an important role in its success.

The People: A Governance Structure Lead by a Chief Revenue Officer?

To oversee the execution of each “workstream” (or area of activity), ensure decisions are made quickly, and keep the transformation on course, companies must create a governance structure–specifically, a transformation office (TO) comprising a few respected executives supported by analysts from the finance and HR functions. The Chief Revenue Officer (CRO) should lead the TO and be part of the company’s executive committee. The CEO should be regularly updated by the TO on progress, and highlight issues and possible solutions.

You might wonder, “Is a CRO in charge of business transformation really necessary — or appropriate?” The CEO should lead the transformation. We are unambiguous in our answer. The CEO should be the leader of the company. A full-time, experienced CRO should oversee the transformation. Why?

A CRO with extensive experience in leading sales in companies experiencing business transformation is the ideal candidate. The CRO should have a vision of what is possible. This includes a view of the company’s performance and current capabilities, as well as a realistic plan to encourage different groups to work together.

This is a demanding job, especially in comparison with the already monumental duties assigned typically to a CRO. However, the CRO must radiate confidence and gravitas from the beginning. This will ensure that the organization is motivated and inspired, no matter what the circumstances. The CRO should not be a stern, egotistical dictator. Instead, they must have the ability to see and judge how people are doing so that they can reach their full potential. The CRO should also be able to take deep dives into complicated issues important to the company.

The CRO should extend the CEO’s reach and have the authority and mandate to manage all levers and influence decisions regarding personnel, investments and operations. The CRO can be an important part of “getting people on the bus,” making key decisions regarding the addition or removal of managers.

Many companies lack the ability to find someone with these qualifications, let alone one who can step in and fill the position. Therefore, the CRO often comes from the outside. Although company leaders might be concerned about the outsider, the ability of an outsider to see the business and make decisions without being restricted by internal politics is one of the most important success factors for a CRO.

The Process: An Unstoppable Cadence of Delivery

Ineffective business transformation is possible if it takes too long. A weekly schedule of transformation meetings is essential to creating a performance infrastructure. Most turnarounds are managed by a project management office that meets once a week to discuss all workstreams. We recommend a 60-to-90-minute weekly meeting for each workstream. In addition to a weekly TO meeting of two hours, we recommend a cadence for weekly transformation meetings. This cadence works because it is relentless and aggressive. It enforces “closed loop” accountability, accelerates implementation, and prevents “pocket vetoes,” other delay tactics, and slippage.

Meetings, and in particular the question-and answer exchanges between CRO and line leaders, are essential for holding people accountable. This is not a consensus-driven approach. The CRO should be open to confrontation when managers fail to meet their promises. Meetings should be transparent and honest. This allows the organization to assess its current situation and identify the best solutions. Transparency is essential to help everyone understand the company’s priorities and decision-making process.

These weekly meetings provide a platform for discussing and debating difficult tradeoffs between revenue generation and cost reduction, as well as for refining individual plans for each initiative. The TO is able to quickly make cross-functional decisions and help prioritize and evaluate competing priorities. The weekly meetings are a valuable tool for developing new talent, and identifying individuals who can be the most beneficial to an initiative. The weekly meetings were used by the TO to identify highly-motivated and high-performing individuals to help develop and build the mobile app.

Although the weekly cadence is an important building block in the transformation process, it’s not sufficient on its own. To instill an execution-focused mindset into daily decision-making, monthly value analysis to quantify the bottom-line impact and an annual “refresh”, which plugs into budget cycles to rekindle idea generation and foster continuous improvement, it should be supplemented with daily performance management.

The Tools: Transparent Reporting and Accurate Tracking Systems

The tools and systems that are used to monitor business transformation performance make up the third component of the performance infrastructure. These might include organizational-health assessments, benchmarks, value-capture models, and visual management and planning aids. Advanced initiative-tracking tools, such as those that can be sorted according to owner, department, delivery status and other criteria, allow users to quickly see the progress of all initiatives. These tools should be easy to use, allowing users to identify delays and trends, track impact, and create rich, yet simple reports. These tools should be accessible to all involved in the transformation.

Our experience shows that the best tools for leaders to monitor the impact of initiatives have the greatest success rate in business transformations. Too many executives simply launch initiatives and hope that the money will eventually show up in their company’s bank accounts. Initiative owners can use sophisticated tracking tools to tie each initiative’s impact to a profit and loss line item. Executives can use this level of detail to make sure that each initiative has a positive impact on business results — It also builds in additional layers of accountability towards achieving the ultimate business transformation goals.

SUMMARY

Business Transformation is not for the weak of heart. Before embarking on a change management program, change leadership in a company must be united and committed. Once they have achieved this, they need to pay attention to not only the specific initiatives but also the changes that they are making to how the business actually works. A performance infrastructure is essential for a successful transformation. It will allow you to achieve rapid, dramatic and long-lasting business improvement.

Sam Palazzolo

Private Equity’s Lean Into Business Transformation

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The Point: Private Equity-backed businesses outperform their business counterparts in periods of economic uncertainty and/or business transformation because their leaders are more involved in leading. If you’ve read anything about Private Equity or Business Transformation — or Business in general over the last few years, it’s likely that you’ve heard a lot about leaning in. Recently, we’ve encouraged clients to “lean in to business transformation,” or told leaders to “lean in on innovation,” or “detail the future by leaning in.” So we pulled-up recently and asked ourselves at Tip of the Spear Ventures and our Business Transformation Consultancy, The Zeroing Agency, “What’s with all the leaning in going on here?” When business leaders actively accept challenges and seek more responsibility — especially in order to progress towards goal attainment, the “lean in” movement makes sense. And in no other area of business ownership does leaning in on business transformation play out better than with Private Equity. So in this post, we explore Private Equity’s Lean In To Business Transformation… Enjoy!

Private Equity's Lean Into Business Transformation

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Private Equity’s Business Transformation Performance

It is well-known that the top private equity firms have the highest returns on equity by using financial leverage to improve the strategy and operations and then exiting at higher multiples. PE advocates also argue that strong board governance, management incentives, and a concentrated shareholder pool are essential for long-term success.

Nothing represents business transformation than those industries faced with difficulties, like in oil and gas, as well as mining, in the wake of falling commodity prices. McKinsey conducted a study to determine if more disciplined PE practices would make a difference in difficult economic times. They compared the performance over a period of nine years amongst 659 PE-backed enterprises and public companies in different sectors. They found that PE-backed businesses outperformed public peers in business transformation efforts and those recovering from business distress. This was even after taking into consideration a higher probability of bankruptcy.

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Is Private Equity Just Better At Business Transformation?

PE ownership has some advantages over public ownership in business transformation. Based on our experience with both types (full disclosure, Tip of the Spear Ventures is a Private Equity firm), we have found that PE boards are more active in setting ground rules and willing to hold management accountable for a business transformation or turnaround. For example, the most successful PE-backed companies boards quickly change the rules of engagement, communicate performance targets clearly, establish a timetable and determine if the CEO and the leadership team are capable of executing the plans. We have observed that these successful PE boards are also very adept at shifting organizational behavior away from “normal” working mode and into “overdrive” mode when planning progresses to execution.

The Lean Into Rules for Business Transformation

These lean into rules — or requirements — for business transformation are not mandatory for all leaders and their companies boards. Others may not have the time or motivation to follow these guidelines. We believe boards and leaders of public companies can benefit from the urgency, energy, and hands-on involvement in rapid owner-assisted business transformations. PE governance offers clear benefits during difficult times as well as the tangible benefits of active board leadership, and direct owner accountability. These are able to truly transform the game and provide the perfect setting for “lean into” moments for business transformation.

SUMMARY

In this post, we explore Private Equity’s Lean In To Business Transformation. While there is much success provided for PE-backed organizations success during business transformation, it’s important to realize that Private Equity does not own the exclusive rights to business transformation success. The key underlying concepts of urgency, energy, and hands-on involvement regardless of ownership structure are elements of success for those seeking business transformation.

Sam Palazzolo

How to Effectively Communicate Your Business Transformation Initiative – Five Tips!

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The Point: In business transformation initiatives, everyone scrutinize every detail – Stakeholders, Investors, etc. So how can you effectively communicate so as to manage the discussion? At Tip of the Spear Ventures’ Business Transformation Consultancy — The Zeroing Agency — We’ve seen business transformations achieve less than full-potential results because of communication. So, in this post we’ll explore how to effectively communicate your business transformation initiative along with five tips… Enjoy!

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Business Transformation Communication

As a leader, you know that there are always a few challenges present in your business. Communicating with stakeholders (Your superiors, subordinates, and peers) during a business transformation initiative is perhaps the most difficult aspect. Leaders must be prepared for increased scrutiny of disclosures and reporting. Leaders are subject to rigorous performance discussions about their managerial-abilities. Leaders in business transformation situations must convey humility and confidence about any mistakes made, as well as a belief that they can correct them.

Leaders, Team Members, etc. will scrutinize every financial statement, report and public appearance for signs of weakness or strength, regardless of whether the business transformation is a formal restructuring or strategic redirection. Competitors will use any hesitation or ambiguity to win customers, suppliers and key employees. All these challenges are present simultaneously, when core business management is most challenging.

Communication during business transformation is not an easy task. Our research suggests that there are some guidelines for communicating with stakeholders. Leaders can improve their focus and support their teams by focusing on the team’s perspective, monitoring changes in support base, identifying future milestones and building trust/credibility.

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Five Tips to Effectively Communicate Your Business Transformation Initiative

Tip #5 – Communicate from the Team’s Point of View

To achieve a successful business transformation, there must be input from many stakeholders such as investors, board members, owners, employees, customers, suppliers, government agencies, communities, and unions. It is important to communicate early and often in order to establish a consistent narrative for stakeholders and convince them that the business transformation is a win-win proposition.

Investors hold the purse strings. Employees may be motivated to work harder if they acknowledge a company’s achievements and reward it by increasing their share price. If investors remain negative about a company for too long, it can lead to low morale and defections that ultimately affect the viability of any business transformation. A decline in share prices can lead to activists launching attacks or to a takeover bid for a company with a lower intrinsic value. In such a situation, news that is not good news is often considered to be bad news. This process can be accelerated and accompanied by increased risks from a lack of communication.

Communication with investors and team members is important to set the tone for all discussions. It is tempting to adapt messaging for different stakeholders. We have found that this can lead to confusion, conflicting narratives and increased risks. Some cases ended badly because the company misrepresented what it said to whom. We have also seen messages from internal management leak to investors and other stakeholders (such unions) or messages meant for employees confuse employees about company priorities.

Tip #4 – Watch for Shifts among Core Supporters

Even in times of great fortune, smart leaders invest their energy understanding the views and values of their most important supporters. These “intrinsic supporters” base their decisions on a thorough understanding of the company’s strategy, performance and potential for long-term value. They are more likely than short-term supporters to support leadership during a business transformation and to help the company’s stock prices move as it develops. However, we have found that supporters can shift more in times of business transformation than in times of crisis. This can indicate the difficulty of the transformation ahead.

Leaders can benefit from a thorough analysis of these supporters to help them assess the potential impact of any improvements. External agents such as public-relations or communications firms can help to identify pain points. Leadership must address these issues head-on and not hide behind pleasant statements and platitudes. For example, one company’s supporters praised management’s efforts in addressing hot-button issues raised during meetings between top supporters and the board of directors.

Tip #3 – Share a Specific Vision for the Future

A company going through a business transformation should have a clear and compelling strategic vision about its plans to fix the root causes of underperformance or distress. This meant that one client had to recognize its shortcomings in capital discipline and commit to improving return on investment and short-term results. It meant that another client had to integrate ten previous acquisitions that had tripled its size, reduce fragmentation and build a more efficient central support system.

A vision should include financial goals and an outline of how they will achieve them. The organization should be open about the tradeoffs it is making between saving money to improve the bottom line and investing in the business to sustain its performance after the business transformation efforts are complete. We have found that investors are open to reinvestment as a key part of long-term value generation. They are willing to support if they know what investments are being made and when they expect returns.

Although being too precise about timing can lead to problems, investors often value and sometimes demand a guidepost. One client company, for example, set a midterm goal to grow earnings margin by 18 percent to 20 percent. It regularly reported on progress towards that goal during earnings calls and in reports. A company that was part of a cyclical industrial industry business had been earning lower returns for five years. It set bold goals to return capital invested at or above cost. This goal included estimates of margin and cost improvements from its largest divisions.

Tip #2 – Build Trust & Credibility

Leaders of companies that are underperforming will not be able to regain trust and credibility with stakeholders until they have a discounted version of the improvements they claim. To regain trust, leaders must be transparent and open about their work and inspire confidence in their ability to do the right thing.

Tip #2A | Get Rid of All the Bad News. Leaders should be as honest as possible right from the beginning. This is a well-known principle in politics, but it also applies to businesses going through a business transformation. The opportunity for a new leadership team to admit all past failures and begin fresh is a wonderful one. One example: A company’s stock rose after it announced a write off of over $1 billion. Investors and stakeholders saw this as a sign that the new leadership team would take responsibility for past mistakes and make tough decisions about exiting investments that were still taking capital and management’s time. The task of a current leadership team is more difficult. Strong leadership is required to critique one’s actions and sometimes risk being replaced. Investors and stakeholders might be more patient when a business transformation is in progress, but they will wait for evidence to prove that it is working. If bad news keeps coming in, even the most dedicated stakeholder or intrinsic investor’s patience will be worn thin.

Tip #2B | Establish a Track Record of Delivering. Only communicate the goals that you are confident you can reach–using metrics and milestones that you review regularly. Then prove that you can accomplish them. Credibility is important in a turnaround. Nothing can undermine it more than making promises and then failing to deliver. Metrics don’t have to be strictly financial. One company, which had repeatedly missed its output and financial targets, focused its business transformation goals on operational metrics to show tangible improvement in performance. For instance, it tracked progress towards overall equipment effectiveness. Although these operational metrics weren’t directly related to top-line performance they provided stakeholders and investors with a way for them to monitor their leaders and hold them accountable for making improvements.

Tip #2C | Offer Incentives to Targets. Talk is cheap and sophisticated stakeholders and investors tend to gravitate towards leadership teams that are willing to put their money where it is needed. Structured compensation packages that directly tie them to business transformation targets and having board members and executives buy significant amounts of stock in a company are signs of confidence and commitment to keep their promises. One company presented a new incentive plan for business transformation that aligned incentives between leadership and frontline employees based on similar performance metrics. Stakeholders and investors responded positively to this plan, citing it as an example of the company’s focus and commitment towards turning a new chapter and a reason to keep their current position.

Tip #2D | Increase Transparency. Honesty can be helpful not only in the financial guidelines, but also for specific projects. Two made a habit of describing — during earnings calls or investor gatherings — 10-20 projects that would improve operational efficiency, cash generation, and worker behavior. The stakeholders and investors noted that they were more impressed by the clear picture of the transformations that these companies underwent and that they believed that the margin improvement was more sustainable than shortsighted cost reduction.

Tip #2E | Be Confident. Leaders need to project confidence in their ability to weather difficult times and compete with other companies, as well as a positive outlook on the company’s future. They must also show humility when faced with distress, regardless of whether it is due to past underperformances or external factors. Stakeholders and investors will be looking at word choice and tone to identify signs of arrogance or overconfidence that can result from denial of past mistakes.

Tip #1 – Brand the Business Transformation

Although branding a business transformation might seem like marketing to many executives, it can be a powerful way to create a focal point for the outside world and amplify the story to make the rebuilding effort more credible inside the business. For example, a client company gave a succinct name to its transformation efforts and included it in all of its external communications. Stakeholders, investors and media began to mention the project name in their communications. This was a shortcut for the company’s impressive transformation. It made internal and external communication more cohesive and gave employees some external recognition.

Brands can convey a feeling of new beginnings. A campaign name can be attached to write-offs, exits of failed ventures, or even boring PowerPoint templates for earnings call slides. This will reinforce a consistent, compelling story about change and help build critical momentum.

SUMMARY

in this post, we explored how to effectively communicate your business transformation initiative along with five tips. In business transformation initiatives, everyone scrutinize every detail – Stakeholders, Investors, etc. So how can you effectively communicate so as to manage the discussion? At Tip of the Spear Ventures’ Business Transformation Consultancy — The Zeroing Agency — We’ve seen business transformations achieve less than full-potential results because of communication. Why?

Communication is not an alternative to performance. A stock price can only be driven by beating expectations and punishing short-sellers quarter after quarter. Leaders can build momentum by communicating with investors and other stakeholders in a thoughtful way to help them raise a company that is struggling to create new value through business transformation.

Sam Palazzolo

In Need of a Business Transformation? Strategies & Execution

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The Point: As a Leader, you know the challenges of operating a business firsthand. With a “We can do it!” attitude, you may be operating your business the best that you can. But are you in need of a business transformation? From our experience at Tip of the Spear Ventures, most leaders don’t recognize the early indicators of business transformation (Denial?) and often focus on the wrong problems/initiatives. So, in this post we’ll explore if you/your organization is in need of a business transformation as well as provide strategies and execution tips… Enjoy!

In Need of a Business Transformation - Tip of the Spear Ventures

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The Case for Business Transformation

Over the past few years, at Tip of the Spear Ventures we’ve seen a disturbing case for business transformation. Namely, sales growth has been somewhat stalled (1-2% top line revenue growth) and earnings before interest/taxes (EBIT) have increased at relatively the same rates. Worse yet, most strategic planning departments forecast that these figures will change little in the coming months/years. Changes in customer preferences, eCommerce capabilities, and the cloud of continued economic uncertainty places pressure on most business leaders.

There are typically two types of business transformation moments that leaders now face. The first is that of cash flow or generation (Either we don’t have enough cash on hand to fund the operation — production, payroll, etc. — or we’re simply not achieving a high enough level of sales to generate sufficient net profit). The second, and far more difficult for a leader to detect, consists of a set of business transformation issues that may not threaten the business but pose fundamental issues to current business model sustainability.

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How Do You Identify Business Transformation Opportunities?

What does a good real-world business transformation consist of? How can a leader tell whether they’re in need of a business transformation? To answer these questions, we recommend a strategic and tactical approach to business transformation.

Strategically, leaders should be vigilant about their performance in four dimensions of business transformation excellence. These four dimensions are strategy, execution, cash flow and people. A leader’s material underperformance in any one of these dimensions could be very problematic. However, if they don’t have a compelling value proposition that customers will choose them over others, they won’t last.

Tactically, we suggest some criteria for evaluation. At the forefront is year-over-year growth (YOY). If YOY has been negligible or negative for at least 4 consecutive months, and/or is 10% or more below industry peers (competitors), a case for business transformation exists.

How Do You Transform the Business – A Three Stage | Seven Step Approach

The experiences of leaders that have successfully conducted business transformation, either since or during the global financial crisis of 2008 | global pandemic crisis of 2020, have shown that a three stage | seven step approach to business transformation can lead to success.

Select image to receive a 1-page overview of the approach

STAGE #1 – SEE

STEP #1 – ACKNOWLEDGE

We explore disruptions within and outside our clients’ ecosystems. This inspires imagination with new customer requirements, new ways to work, and new forms and value. This process leads to a customer-centric, technology-enabled business model and operational model.

STEP #2 – ARCHITECT

We help you achieve your business transformation goals by creating business models and/or operating models that are both value-creating and strategically sound.

STEP #3 – SELECT

We support the selection of the best business transformation options, program leadership and the best path forward by incorporating leadership alignment, financial readiness, and financial wherewithal.

STAGE #2 – DO

STEP #4 – PILOT

We validate that there is value in building capabilities, service delivery models and organizational structures. We test them against customer/stakeholder expectations, talent/abilities, mindset, organizational fault lines and competitor responses. Finally, we specify the amount of change needed to adopt the new operating system.

STEP #5 – DEFINE

We incorporate lessons learned from pilots and design prototypes to modify business transformation value expectations and business or operating model elements. Then we define the business transformation launch roadmap, integrated change program, and build the business transformation program.

STAGE #3 – DELIVER

STEP #6 – SCALE

We prepare leaders to initiate larger scale change. We also support implementation and program execution of organizational change programs. And we quantified progress on key launch metrics and value outcomes metrics.

STEP #7 – ADAPT

We track the value of the transformation and offer adaptations to business or operating model elements to meet ongoing disruptions, competitor moves, and analytic insights.

SUMMARY

Times are indeed tough for retailers. But being in a distressed situation isn’t cause for despair. If retail leaders face the facts early, identify and address the root causes of their financial distress, take costs out quickly, and ensure disciplined execution, they can deliver—and rapidly move beyond—a turnaround.

Sam Palazzolo