A modern way of working can be admired not only in Silicon Valley but also in Berlin, and the success factors that distinguish digital companies and agile organisations are known: holistic customer focus, internal budget processes, separate IT systems or full control of digital projects. However, the individual perceptions of the people responsible for the implementation are often very different. This article therefore describes the approach in the context of a transformation which – ideally executed – can be transferred to all levels of a company.
The challenge of common objectives
It is often the case that digital changes fail because top managers cannot agree with one another. Although a clear commitment to the set goal is expressed, implementation takes place in an uncoordinated manner and there is little to no progress. The transformation is regarded as incomplete. The company management, which wants to develop the organisation into a digital, customer-focused company, firstly needs to fully understand all the facets of the planned change with regards to the consequences, and then visualise the actual, functioning business model in its target state. They should enter into an intensive opinion-forming process.
For example, such a transformation requires that all HR systems be changed. The stipulation, “We will address each other by first name”, and the abolition of tie-wearing is certainly not sufficient. Since employee development paths are completely turned upside down, radical rethinking is vital; budget planning and control processes – as well as the spatial concepts – have to be adapted. All executives and employees must buy-in to the change. The process requires an extremely high degree of intensive communication, honesty and authenticity. The time challenge for top management is considerable, and often underestimated.
Procedure: The opinion-forming process as a “transformation journey”
One characteristic is always the same in the successful transformation of companies: the long-term, intensive discussion process about the target image by top management. The process of achieving a digital and agile company can be worked out on five different levels by top management on the road to “transformation”:
- Digital, customer-centric target image (“how do we want to be perceived by our customers?”)
- Customer-focused KPIs (“what do we want to achieve for our customers and how do we measure ourselves?”)
- Way of working – customer-oriented work (“how can we achieve this for our customers?”)
- Agile organisation and leadership (“the rules of our cooperation”)
- Customer-oriented mindset (“our behaviour in cooperation”)
If top management has intensively addressed and understood these five levels, the change can proceed. It is recommendable to consult an advisor with a great deal of expertise in change and transformation management in this development process. This can also help address and smooth over personal differences within top management. Mutual interaction and the corresponding corporate culture is vital to the success of the change, as well as customer perception of the company.
Examples of successful transformations
In the 2000s, when a large European telecommunications provider transformed itself from a product-focused to a customer-oriented company, this change was preceded by a three-month intensive process of opinion-forming at the board level. For three months, the board met weekly for day-long workshops, cooperating to develop a new business model under the guidance of a consultant, and to understand every detail. During the discovery process, each member of the board went through a personal learning curve; the discussions were collegial, cooperative and even contentious.
At the end of this “transformation journey”, all members of the board agreed on the new business and operating model, and implemented it with conviction. They accepted what the transformation would mean for each individual executive management division, and what changes would have to happen in the organisation, the executives, and the employees. Each board member was fully prepared meet the implementation challenges head-on, and to bring their best effort. The board group had grown into a partnership-based team.
A second example is the transformation journey that a product-oriented provider of IT solutions has gone on to become a digital company. Three members of the board developed the target image of a customer-centric and digital business model over a longer period of time. It included key figures and operational measures to achieve customer orientation, governance and a new corporate culture. During the discussion of the content, one of the members of the board became aware that there was a difference of opinion regarding the implementation. This disagreement led to a new development process.
This small step, perhaps perceived as redundant at the time, paid off several times in implementation. It went smoothly and quickly; today’s customer figures and business results speak for themselves.
The working world will have changed completely by 2030. All of today’s predictions will occur, although with different characteristics and at varying levels of intensity. What is certain is that we are unlikely to be working and “serving” customers in the way we are accustomed to today. Since the expected changes are known, every responsible top manager should deal with the possible and necessary changes.
With all of my experience as a consultant, and taking into account scientific studies on successful transformations, my recommendation is that every board of directors and every management team should go on a “digital and agile transformation journey”. This means taking part in a high-intensity (at least once a week), long-term (three to four months) discussion about the target image, the future design, and the organisation of the company on the five described levels.
The time and content investment always pays off. We know from modern management methods around Lean, Agile, Scrum, etc. that constant examination of the target image is necessary. This should be a lasting process in every top management team if the company is to be successful in the long term. There is still time to shape your future. Doing so will facilitate not only the change into a digital and agile company, but also future transformations.
The desire for transformation into a digital and agile company is becoming increasingly important for many companies. Although the success factors are known, the processes often fail due to the lack of interaction at the management level. But how can an optimal transformation be designed so that it can penetrate all areas sustainably? Jan-Peter, an expert in change and transformation management, describes the prerequisites for successful transformation and the challenge of accompanying this “journey” as a consultant with his five-level model.