What a Corporate Transformation Is Not (Part II)
Many institutions have undertaken expense reduction programs under the branding of “transformation”. While these efforts are useful to fund a true corporate transformation, these strategies are not transformational.
No Automation Without Obliteration
Many firms today will tell you they have embraced change and view change as necessary to compete and keep pace with customer demands. They will also tell you that they are in the process of digital transformation. But are they really?
Over 25 years ago, in his article; Reengineering Work: Don’t Automate, Obliterate, Michael Hammer discussed the tendency of firms to automate business processes as they were, without thinking too much about whether or not the processes were effective or efficient. Therefore, if a process had 25 steps, 25 steps were automated’ effectively paving the cowpath. He further suggested that the proper approach was to “obliterate” the existing processes and re-imagine new end-to-end processes absent of organizational structures and silos.
An excerpt from Hammer’s article:
“At the heart of reengineering is the notion of discontinuous thinking — of recognizing and breaking away from the outdated rules and fundamental assumptions that underlie operations. Unless we change these rules, we are merely rearranging the deck chairs on the Titanic. We cannot achieve breakthroughs in performance by cutting fat or automating existing processes. Rather, we must challenge old assumptions and shed the old rules that made the business underperform in the first place.”
Unfortunately, today many organizations are making the same mistake. Additionally, companies have further complicated reengineering efforts through tactical cost savings tactics such as offshore low cost location strategies (See Part 1 of the What Corporate Transformation Is Not series on our website.)
Since many organizations A) have not documented their existing processes, B) do not have an “aspirational state” or C) do not have a roadmap to get there, we recommend four major phases:
- Discovery — using a people, process and technology approach, organizations must “discover” their current state and define what is being done, how is it being done, and what technologies are being used to get it done. By “walking the process”, the organization documents the process workflow, the people in the process (as well as the time they spend), and the technology utilized..
- Aspirational (Future) State — this is the phase where “discontinuous thinking” is critical. Using Simon Sinek’s Golden Circle, an organization must shift from focusing on how “something is done” to focusing on why it is being done and the role it plays in the mission of the organization. Once the “why” is agreed and socialized, it is time to determine the “how”. The “how” is how an organization serves their “why”. The “what” is literally “what we do” everyday. The Future State is comprised of the “how”. It is how do we fulfill our “why”. In this phase it’s important to understand that no organization can be everything to all. What are your priorities ? If you don’t understand this you may wind up doing very little well.
- Road Map — the Road Map gets a company from the current state to the future state. What are the major milestones and deliverables?
- Project Management — precise project management ensures successful delivery (on time and on budget with stated functionality) while failing small and delivering value throughout the program.
A successful transformation touches all aspects of an organization including but not limited to human resource changes, a communications plan, and the culture to be open minded and take a degree of measured risk.
In summary, companies must disassociate themselves from their current states, re-imagine what could be and take a brave, yet disciplined, approach to true transformation.