Transform today to thrive tomorrow: The Four Building Blocks of Transformation

Peter Kasahara Partner and Leader PwC Digital Services, PwC Switzerland 01 Nov 2018

Successful transformations may not be easy to achieve, but they are possible – given the correct tools and direction, you can carry one out in your organization.

It is our belief that transformation is a substantial change in an organisation’s capabilities and identity, in order for it to create valuable outcomes, related to its mission that it had not been able to navigate before. Using the word “transformation” might not be favourable to you right now, as mastering change becomes second nature to your people, rather than a change forced upon them.
Successful transformations are a long-term strategic process, not a means to an end; building transformation capabilities and organizational agility are in the foundation and constant companions throughout the journey to transformation.

The Four Building Blocks of Transformation

Drastic changes and business development might be on your mind right now; new industrial platforms, geopolitical shifts, global competition, and changing consumer demand are causing an unavoidable shift in your business. Highly valuated competitors could be causing a threat or even disruption to your business, and activist investors looking for their perfect match. While you might have your own mission and ambitions for your company; creating profitable innovation, embracing new opportunities, being a market and industry leader in your field, capitalising on loyal and aspiring human capital, maintaining social responsibility and even breaking through barriers to leave a positive impression on the market. Nonessential practices, operations and cultural habits might also be a cause of hindrance on your way to success, and you should consider clearing them away.

More often than not, the initial response is a traditional transformation initiative – a top-down restructuring, along with cost cutting across the board, a technological reset, and some reorganizing. Maybe you have already encountered or been part of such initiatives. If you have, you have firsthand knowledge on their likelihood of actually turning out to be successful transformations. Usually, those endeavors come to fruition past the set due date and exceed the budget, which leaves the organization worn out, demoralized, with little to no changes. Fundamentally new types of leverage have emerged in the last ten years are not taken into consideration when conducting the transformation, such as new networks, data collection and analysis resources, and alternative methods of knowledge codification.

Successful transformations may not be easy to achieve, but they are possible – and you can achieve them as well. A transformation in this case, is a substantial change in an organisation’s capabilities and identity, in order for it to create valuable outcomes, related to its mission that it had not been able to navigate before. It doesn’t have to include a single major initiative (although it is an option); but the organization establishes a continuous mastery of change, where adaptability starts to feel natural to everyone in the organization.

This type of endeavor can be conducted on a large or small scale; it could include the front, middle or back office; any type of organization, from a startup, to a global enterprise, can carry it out; every aspect of the organisation’s structure, inclusive of innovation, finance, marketing, sales, HR and operations will also be affected. At any scale, highly engaged leaders are key to this change, leaders who drive the cultural shift and take control of the organisation’s future in the following four ways:

The Four Building Blocks of Transformation

Create a Strategic Identity

All organisations nowadays need to create a distinctive mark. This extends beyond just the brand, but through the establishment of an influential identity, in which its value proposition, core capabilities, customer and employee experience, and company culture mutually benefit and boost one another. Organisations that have established a consistent, differentiated strategic identity become iconic. They are devoted to a unique way of conducting business, and to a wider vision of where they see themselves in the future.

Design for Trust

It is usually fairly easy to tell how well a transformation is going by the way people that feel about it. Unpleasant actions might need to take place in order to carry out the transformation, including selling part of the firm, downsizing and making substantial changes to the strategy. However, if people can see the benefits of this transformation, they will commit their time and efforts into establishing this new identity. They will place their trust in the organization to deliver its promise.

Master the Pivot from Sprint to Scale

In the early stages of the transformation, new ideas have to be harvested and nurtured, and they should be insulated from interference from the larger system. However, if those ideas remain in isolation, they will become consequently marginalized. Successful transformation leaders should maintain on-the-ground skills to ensure the prevention of this marginalization from the beginning. Through the combination of speed and agility of a startup with all-around, full-scale execution, they assemble, expand and preserve the capabilities that are essential for achieving differentiation.  

Treat Your Legacy as an Asset

Your organization would not have succeeded thus far without having it holding a great deal of value. Now it is shifting into structure. The value of that you have created for your organization must be capitalized on, objectively and creatively. Certain elements of your old organization will have to inevitably perish throughout the transformation process. Those services, processes, practices, brands as well as well subsidiary enterprises might not align with newfound identity and alternative operating model. 

Your legacy is essential to and could affect the entire transformation. While you move towards your new identity, your old business should not stay idle; the business depends on its profits and revenue. Therefore, you must have a clear and effective plan for cultivating your best practices, developing, and disposing anything that could come in the way of the transformation.

These are the basic building blocks we believe are essential for any successful transformation. They are not set guidelines, phases or organizational structures. Those building blocks differ from one organization to the other. They are alternative methods of thinking about influence and change: they offer different perspectives on how to pivot both individual and organizational behavior in a more effective, competitive and engaging direction.

 

In order for you to identify which changes you need to make, it is necessary to ask yourself the following questions:

  • How vivid and bold is your strategic identity?
  • To what extent are you nurturing the full potential of your people?
  • Which new ideas can you scale to success?
  • How much latent value is there in your legacy activities?
  • How well do your objectives and key results reflect your strategy and drive performance?
  • How are you leading your own life by example?

Summary

The clearer your strategic identity and requirements, the more confidently you can move forward with the changes you need to implement. Eliminate fear from the process, as fear will cause you to shy away from change and therefore make it less effective. Commit to setting up your transformation initiative to accentuate ambitions rather than fear. Stakeholders and employees constantly ask how they can assist in building the organization you would like to lead. If you provide a clear, concise and confident response, one day not too far into the future, you will realise you are already leading that company.

 

Contact us

Peter Kasahara

Partner and Leader PwC Digital Services, PwC Switzerland

Tel: +41 58 792 42 15

Paolo Pigorini

Partner and Leader of Strategy Practice, PwC Switzerland