3 Strategies to Fuel Smart Business Transformation
May 19, 2016 / By Vanessa Horwell
In 2016, stakeholders across practically every business-to-business sector have change on the mind. Whether they're focused on disrupting their industries, creating new markets, or innovating inside their own companies, many executives are just as committed to effecting long-term change as they are to earning revenue – making now an exciting time in the world of B2B technology.
And on the road to lasting change, innovating inside their own companies is one of the most important initiatives for executives to embrace. Before they can solve their industries' problems, B2B companies should make sure – first and foremost – that they're not contributing to them... and even that's not enough. To combat new entrants and other competing market forces, companies must continually address (and resolve) their weaknesses.
"Business transformation" may sound like buzzwordy startup-speak, but it's a concept that should be top-of-mind for all senior managers regardless of company size or growth phase. With one study suggesting that 75 percent of the S&P 500 will turn over in the next 15 years, and another predicting that 20 percent of publicly traded companies will delist by 2021, we've entered an era of "adapt or die" – in which transformation is every company's best hedge against irrelevance.
That said, "transformation" is a hard concept to pin down. Unlike change management, which is focused on making finite modifications based on defined initiatives and improvement objectives, transformation is more holistic – focused on driving substantive change at the fundamental levels of the business. One online resource defines transformation as a strategy that aims "to align the People, Process and Technology initiatives of a company more closely with its business strategy and vision." Alternatively, Harvard Business Review puts it this way:
"The overall goal of transformation is not just to execute a defined change — but to reinvent the organization and discover a new or revised business model based on a vision for the future," writes Ron Ashkenas at HBR.org. "It’s much more unpredictable, iterative, and experimental. It entails much higher risk."
To ensure your own transformation efforts are high-risk, high-reward, it's important to consider which business concerns are most important for your company – and what kind of changes will drive the most impactful long-term improvements. Three efforts are key:
- Revisit Your Business Model
Take a look at your business model from the most objective perspective possible (or retain a consultant who can view it with fresh eyes). How long have you relied on your existing revenue stream(s)? What forces in the market have changed since then? How are new competitors charging their customers – and how well is that going for them? The answers will determine whether it's time to change your pricing or otherwise shift your revenue generation approach.
- Get to Know Your Clients (and their Expectations)
Even if you've served the same base of customers the exact same way for years, they've changed – regardless of whether or not your business has. Adapting to their expectations is crucial, but you need to understand those expectations first. Perform comprehensive surveying and utilize market research to know what your clients want, and develop a transformation plan to give it to them. (If you don't, your competitors will.)
- Know it's Not All About Growth & Revenue
As we said before, many executives are just as committed to effecting change as they are to earning revenue... but that can't be said of every stakeholder. (This is capitalism, after all!) Transformative change rarely leads to short-term growth – and even in the most innovation-friendly organizations, criticism can arise when projects outside the business development engine are prioritized. Stay the course; transforming your business model, product line, or company vision is a long-term strategy that creates growth over time – and an "adapt or die" ethos can help solve industry problems in the process
Sign up for our insights on the convergence of business and PR