By Michael J. Vitale
Business transformations are complex, large-scale changes to your company’s business capabilities and behaviors. Their purpose is to bring about significant and sustainable improvement in performance. For example, companies in the healthcare industry segment may undertake transformations to introduce new healthcare services, improved online healthcare customer experience, or systems for protecting healthcare information.
As with any worthwhile and complex human endeavor, business transformations are filled with challenges. The results from a 2015 McKinsey Global Survey on transformations showed that only 26% of executives considered their business transformation a success. While many factors contribute to the poor success rate, a single theme is woven throughout the failures: the breadth and depth of change in a business transformation is unwieldy. Most businesses are simply not ready for this level of change.
First, business transformations are not the purpose of a company. A company’s purpose is to profitably service its customers. Business leaders want to get this change completed as quickly as possible and get back to running their businesses. Second, business transformations are not something most companies do. Consequently, they don’t have the right skills to address the change. These deficiencies result in a gross underestimation of the change associated with a business transformation and dooms the transformation before it’s started.
If business transformations are so challenging, why do them? In short, because the business environment is constantly changing, and your business must adjust accordingly. In the past decade, the environment has changed at an accelerated pace, in many instances, the business model no longer reflects reality. At some point in time a transformation is likely. With a 75% historical rate of failure, where does that leave businesses?
In every business transformation failure, the challenges demonstrated the company had not completed pre-work, or was not ready to begin follow-on work. In other words, the challenges were directly related to the company’s readiness as it progressed through the transformation.
Is there a way to ensure a company is ready? The answer is yes. Being ready during your business transformation requires two things: checking your current state of readiness and (if necessary) taking steps to become ready.
Are You Ready? Business readiness assessments can be used to measure a company’s level of preparedness to address the challenges and achieve the degree of readiness required. Assessment standards and evaluation methods can be specified for each challenge throughout the transformation.
For example, one readiness assessment tests whether you can explain the reason for undertaking the transformation. Surprisingly, this one of the key challenges in a transformation. To be ready, means you understand why you need to transform your business, and the reason is both aligned with your company’s mission and produces a compelling next state with lasting value.
What if you’re not Ready? If your company has not attained readiness, it must do something to become ready. You will not become ready with the passing of time. Action is required—specifically action that brings you to a state of readiness. A business readiness preparation is a set of remedial actions you can take to help attain readiness.
For example, suppose you have not yet stated the reason for pursuing a transformation. The corresponding readiness preparation would include analyzing gaps in customer expectations, strategic/tactical threats from your competitors, and weaknesses in your business performance and capabilities. You would then identify the factors in your competitive environment, external environment, or internal environment, that are motivating you to change. These are then formalized into a statement of purpose for your transformation.
The magnitude of change accompanying a business transformation can be overwhelming—even if you are prepared—and catastrophic otherwise. You can improve your readiness to address the change by asking the questions “Are you ready?” and if not, “What can you do about it?” As leaders of change you can take the first step toward addressing these challenges— prepare yourself for the change.
“Are You Ready for Your Business Transformation?” characterizes business transformation challenges and shows how they can be overcome through business transformation readiness. Available through Barnes & Noble, X4MU, and LULU
The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.
