“Can we really call this a transformation? Isn’t the word a little strong, Marcel?” “If we change our processes and systems without changing our business model and products, is it really a transformation?” I often get this sort of question from my clients. Here’s what I tell them.
Transformation: It’s a scary word
Transformation, the “T word”, can be a little scary. Why? Because it is often a synonym for major changes within the company that bring chaos, layoffs, instability and uncertainty.
That’s why instead of using such a strong word so loaded with implications, many leaders prefer to talk about a strategic plan, a reorganization, programs or projects.
How do we define or identify a transformation?
Basically, I see two schools of thought on the matter:
- There are those who argue that any initiative that involves changing processes, how things are done, is a transformation.
- There are those who only use the T word to describe a major shift that shakes a company to its core.
Transformation: the new standard
Semantics aside, there’s one thing that I think holds true for most organizations these days: if they want to ensure their continuity, they have no choice but to engage one way or another in some sort of major change.
Whether we call that change “transformation” or something else doesn’t really matter.
What matters is understanding that in a world that is digitizing and changing at an increasingly rapid pace, a transformation is no longer the exception, it’s the new standard.
There’s transformation and there’s… transformation
Transformations, like tropical storms, can be classified into categories:
- Category 1 – Improvements: Multiple changes made continuously to ongoing operations in order to improve performance (e.g., new equipment, new procedures, reorganization of a division). Here, changes are mainly internal and produce swirls which are general limited to a sector.
- Category 2 – Major changes: Major projects that transform multiple processes and working practices (e.g., purchase and implementation of a new client management platform (CRM)). Here, changes resemble a small local storm. They take longer to implement and touch a larger number of people but still remain mostly within a limited number of sectors in the organization.
- Category 3 – Growth-Driven Transformation: Acquisition, merger, or accelerating the pace of production, etc. that result in a new organization (e.g., Rio Tinto's acquisition of Alcan). Here, changes are linked to external factors and aim at reaching new markets, widening product lines, respond to increasing demand, etc. without a major shake up or upheaval of the industry. These changes provoke an internal storm (restructuring, new processes and systems, new management styles, etc.).
- Category 4 – Survival-Driven Transformation: Important or major restructuring aimed at keeping the organization from negative growth (e.g.: Research in Motion/Blackberry or a number of businesses who need to modernize their systems, processes and structures to remain competitive). Here, the industry, competition and customers (external factors) force the organization to make multiple large-scale internal changes to survive or return to growth. This generates a tropical storm of changes within the entire organization.
- Category 5 – Proactive Transformation: Transformation of the business model of the organization that creates an upheaval in the industry (e.g., La Presse newspaper’s switch to digital La Presse +). Here, the organization provokes major changes in its industry in responses to changes in many factors in the environment. It is a hurricane of changes for the organizations that sweeps the entire industry on its path.
Now it’s your turn
Are we talking about a transformation in your business? You decide. Regardless, you can be sure of one thing: if your organization is not prepared to change in one way or another, it's just a matter of time before it will be forced to, to ensure its continuity, or even its survival.
Cofounder, Vice President and Strategic Consultant