Definition: A portfolio of interdependent or intersecting initiatives that reinvent a business organization and discover a new or revised business model based on a vision of the future.
It may involve:
- Getting more revenue from current product or service
- Creating a leaner support organization
- Shifting from internally-focused to externally-partnered product development
- Ramping up the search for acquisitions and adjacencies
- Developing a new set of cultural principles
- Introducing a revised approach to performance management aligned to the initiatives
In order for transformations to succeed, leaders may need to learn a broader set of transformational leadership capabilities such as dynamic coordination of resources, stronger collaboration across boundaries, communication in the midst of uncertainty and how to prioritize and stop lower-value activities.
An independent survey* of Western European enterprise-level companies that had undertaken transformations found that:
- 44% were motivated by growth in international competition
- 34% were motivated by industry consolidation
- 34% were motivated by increased competition in domestic markets
- 86% felt that managing transformations is an integral part of management
- 30% felt it was something at which they excel
While the goal is to make the company into something totally different, no one knows for sure what the final outcome will be. Transformation is as much a process of discovery and experimentation as it is of execution. While managers really do know how to execute discrete changes, they tend to know much less about how to engineer a transformation.
* The Economist Intelligence Unit