Organizational Transformation & Culture Change
Digital transformation isn't the only thing driving the need for a change in culture and mindset at the enterprise level. Demographic factors have come into play as the job market sees an influx of Millennials into the industry and the imminent departure of baby boomers from the B2B sector. Meanwhile, innovative processes and new approaches are changing the way business is done.
Change and Its Challenges
Transformation at any level of business is seldom easy or straightforward. In B2B industries, one of the main challenges is educating stakeholders and creating change at the organizational level. As the mantra of digital transformation resonates across the globe, digital is influencing and merging with broader business aspects. There is now a broader cultural change at play which intersects with more specific issues of talent management, succession planning, and generational changeover.
This is simultaneously a challenge and a broader integration issue set to drive companies into the next era of the digital age. Mindset shifts and cultural changes are a requirement for meeting this challenge - and all associated aspects speak to the ability of companies, after integrating these changes, to become more agile and more resilient to ongoing market fluctuations.
The Dangers of Inertia
As the line between business processes and technology blurs, the influence of digital expands. Digital is everywhere - and organizations need to assemble the skills and resources to master it.
Doing nothing is no longer an option. If companies don't innovate or integrate the right technologies and processes, they face a very real threat of going out of business. This is not necessarily an issue of an immediate death - more like a slow crawl towards irrelevance. Organizations that can't or won't adapt will simply be left behind.
The Need for Resources and Solutions
Digital transformation, organizational restructuring, and cultural change are all endeavors that require considerable planning, time, money, and other resources. For those unable to take on these projects alone - or those who prefer to seek out optimal solutions - there's a growing ecosystem of service and resource providers to call upon. Solutions for the primary market may incorporate elements from any of the following aspects.
A competitive IT market and the availability of cloud-based services has brought the levels of computing and data analytics power needed to sustain large-scale automation technologies. Automation has the potential to transform and optimize business processes - provided the following lessons gleaned from past successes are taken on board:
- Strategic Planning Is a Basic Requirement. An automation strategy for B2B operations must be designed from the outset to streamline, re-engineer, and continuously improve your business processes.
- Automation Can't Work Miracles on its Own. One tool won't necessarily solve your multitude of organizational challenges and address all your process automation requirements. Intelligent automation works in tandem with workflow dynamics, machine learning, and other digital technologies to achieve maximum benefits.
- Centralize - Standardize - Optimize - Automate. This approach, together with the creation of an automation platform, will empower you to use automation as a strategic tool for end-to-end transformation.
- Technology Has Limits. You'll need to set performance targets and expectations based on what the automation tools can and cannot do.
Concerns about the technology's impact on employment patterns are still common, with "automation" and "job losses" synonymous in the minds of many. While it may be true that automating tasks routinely performed by human workers results in some shifts in personnel, there are also opportunities to be had. Automation can free valuable talent from mundane tasks, enabling them to concentrate on more strategic matters that directly benefit the business. And with emerging automation technologies, there's a need for new skills in managing and overseeing the new systems.
Organizations that have successfully deployed intelligent automation have seen myriad benefits, including revenue generation, improved time to market, increased accuracy, greater regulatory compliance, and cost savings.
Digital transformation requires companies to change not only the tools and technologies they work with but also the way they work together. To do this successfully, all internal stakeholders and external partners must be on board and aware of what's taking place. A change management program is therefore essential.
- Prepare. Develop a "digital transformation charter" detailing your business goals, relevant metrics, and strategies to achieve them. At this stage, you should also identify executive stakeholders and functional change agents - those who will act as influencers to drive acceptance of change.
- Define. Select desired business outcomes and define the user experience and solution elements needed to document and map them.
- Design. Finalize your digital transformation blueprint. In addition to the relevant technology and solutions, this should include plans for content, training, and communication.
- Build and Verify. Here, successful organizations merge their project management tools, combining functional requirements and user experiences with previously defined change management plans and tasks.
- Launch. At this point, the active drive for adoption and implementation of change begins in earnest. Monitoring and the analysis of feedback become key as you shift from a project management model to a program management and governance model.
Internal Sustainability Measures
Much like change management, making digital transformation and its associated culture changes sustainable requires a sound strategy, based on in-depth analysis. This will enable your organization to predict possible risks, make budgets, assess the impact of changes or enhancements, and set measurable targets for success.
Laying the foundation for a successful and sustainable digitalization program takes several steps.
- Create a Clear Vision for the Process. For sustainability, this vision should focus more on your long-term goals and the experience you'll be creating for both internal stakeholders and customers. This strategic vision will be based on the short-term objectives and resources visible to your organization today, but with a global view that also addresses the future.
- Analyze the Market. A profound analysis of your competitive environment and market dynamics will assist in creating a relevant and up-to-date strategy, and in identifying the technologies you require to make change sustainable. Don't be afraid to think "outside the box" by looking at what's been successful in other industries.
- Design Your Experiences. These will include the digital experiences of your customers as they engage with your organization and the experience of your workers as they engage with the technology and processes you've put in place.
- Make Periodic Assessments. Examine your digital infrastructure to determine how well software, services, apps, and other tools are addressing your current and future needs. This assessment will help you identify which processes need to be automated or optimized, how your technology may be updated or improved, and which parts of your set-up are truly necessary.
- Make Tweaks and Adjustments. Sustainable transformation requires constant monitoring and a willingness to change in line with the times and circumstances. You'll need to have the skills available to make occasional adjustments to your infrastructure. At an organizational level, you'll need to make allowances for training, on-boarding, and other moves necessary for sustaining a digital culture.
Agile Company Structure and Corporate Culture
A collaborative study in 2018 by the McKinsey Agile Tribe (a group of over 50 global colleagues bringing expertise from the digital, operations, marketing, and organization disciplines) identified five key characteristics of successful agile corporations. These are:
- Re-defining Value: Agile organizations re-imagine both whom they create value for and how they do so. Intensely customer-focused, they seek to meet diverse needs across the entire customer lifecycle.
- Having a Network of Empowered Teams: While they still retain a stable top-level structure, agile companies replace much of the rest of their hierarchy with a flexible, scalable network of teams. These teams operate at high standards and with a high degree of autonomy.
- Rapid Decision-making and Learning Cycles: Rapid-cycle working models accelerate strategic thinking and execution, while the integration and continual rapid iteration of thinking, doing, and learning allow the organization to innovate and operate in an agile way.
- Dynamic and Passionate People: By putting people at the center, the agile company engages and empowers everyone in the organization, engendering a corporate culture where they can create value quickly, collaboratively, and effectively.
- Next-Generation Enabling Technology: An agile corporate structure requires a rethinking of the technologies underlying and enabling the company's products and processes, as well as the technology practices that support speed and flexibility.
Budget and Planning for Resource Allocation
In order to support a culture of change and a sustainable transformation, budgeting and planning for resource allocation must be adaptive and innovative. The following strategies can assist in achieving this.
- Decentralize Decisions and Replace Policies with Priorities. Guidelines can give each employee the authority to determine courses of spending that will serve the company from their position. Decentralized decision-making and budget-setting can save time and create an environment of trust, where the judgment of individuals is seen to have value.
- Improve Mechanisms for Investment in Innovation. Resource allocation will benefit from a lean approach to innovation that goes beyond the traditional budgeting and procurement process.
- Build Rapid Response Capabilities. An internal team dedicated to keeping an eye on market trends - and with authority to act on them - will be better able to identify opportunities and risks and decide what to do about them.
- Dedicate Resources to Processes. In a 2018 analysis of budgets for digital transformation, the Beyond Budgeting Institute recommends replacing the annual budget process with three separate processes: target-setting, financial forecasting, and resource allocation. This leads to better decision making, more meaningful targets, unbiased forecasts, and lower costs.
- Prioritize Strategy - and Slash Costs for Everything Else. Buying resources "as a service" is one way of accomplishing this, while allowing more of your budget for strategic matters.
CRM for Corporate Communication
Customer relationship management (CRM) systems help to fine-tune and optimize the customer experience - but for client-centric businesses, they also closely align with organizational goals. CRM does this by enhancing internal communications as much as enhancing communications between staff and consumers.
Enterprise-wide CRM brings together all the functional areas in your company with the common purpose of optimizing the customer experience. This means sales, marketing, service, shipping, logistics, IT, and finance employees can see what stage a prospect or customer is at, and what tasks must be completed in a given timeframe.
Thus, the CRM platform becomes a communications hub for the enterprise.
A CRM platform's various communications tools may, therefore, be used to keep internal stakeholders informed of new and ongoing developments and will play a role in the change management process. Facilitating communication across the enterprise also assists in disseminating information relevant to corporate culture and digital transformation initiatives.
Organizational transformation is set to be a hot topic at Digital Transformation Connect 2019, taking place this September at the Rancho Bernardo Inn, San Diego, CA.
Download the Agenda today for more information and insights.