Business Transformation 2019

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R A C O N T E U R . N E T 03 /business-transformation-2019 ack Welch, former chair- man and chief executive of General Electric, knows better than most how change can affect a business. "When the rate of change on the outside exceeds the rate of change on the inside, the end is near," he wrote in GE's annual report at the turn of the millennium. It's an observation that seems even more pertinent now than it did then. When Mr Welch made the remark there were no smartphones, Mark Zuckerberg was just another high school student and the Twin Towers were still standing. Today the fourth industrial revolution is disrupting entire industries, climate change is a serious threat to supply chains and political turmoil is part of everyday life. In other words, change is the new normal. "What's really clear is that change has accelerated exponentially over the last couple of decades," says David Holliday, a partner at Gate One, a digital and business transfor - mation consultancy. "Meanwhile, you have all these organisations that are trying to make sense of what it means for them, and what it means for their leaders and their people." One way to figure out where to focus your efforts is to create two engines that sit alongside the core business, says Mr Holliday. The first engine drives the exploration and incubation of new ideas to iden- tify what might be important to the business and its customers tomor- row; the second embeds any proven concepts within the organisation. However, this approach can be "fas- cinating but very unsettling" for leaders, he warns, because there's "a lot of trial and error" involved in making it work successfully. Generally speaking, he's found there's a clear distinction between organisations when it comes to dis- ruptive innovation. "They're either at the forefront, driving it with a positive mindset and treating it more as an opportunity, or they're on the back foot, seeing it as a major threat to their resilience," he says. Leaders of the latter type may have reached their current posi- tion not because they excel at lead- ing change, but because they have a deep understanding of today's busi- ness environment. In fact, they may not feel well equipped to deal with continual change and disruption. But as Irene Molodtsov, chief exec- utive of business transformation consultancy Sia Partners UK, says: "Change is not a one-off activity. It's business as usual." So these leaders may simply have to learn the right skills on the job. Bernd Vogel, professor in leader- ship and director of Henley Centre for Leadership, says that first and foremost they need to be clear about what areas of the business they want to remain stable and what areas they want to change faster, as well as which business capabilities they truly want to improve. "In many organisations change can take on a life of its own and then it can become a burden," he says. "The key that actually connects why you're doing it gets lost in the detail of the process." In addition to setting a clear vision of how the organisation needs to change and why, the energy and passion with which leaders apply themselves to business transfor- mation plays a vital role in its suc- cess. "When you're communicat- ing a vision it's like an input," says Professor Vogel, "and it's really important to ask: 'Have we actu- ally created a spark? Has that vision landed with every manager? Have they formed an attachment to it? And are they empowered to contrib- ute to it?'" When resistance to the vision occurs, it's often not because peo- ple don't believe change is neces- sary, "but because they don't think that the action, the attention, the commitment is behind it at the top level", he adds. Companies that place an emphasis on long-term innovation, supported by every member of senior manage- ment, are far more likely to succeed in a climate of perpetual change, says Darren Fields, managing direc- tor for UK and Ireland at Citrix, a multinational software company that provides digital transformation solutions. They should also acknowl- edge that some individuals will be more comfortable than others when it comes to experimenting with new technologies and processes. "By supporting such 'innovation champions' or 'intrapreneurs', who aren't always at the senior level, but have the skills to identify and put new processes into practice, and giving them room to make mistakes, organisations set themselves up to discover new and more efficient ways of performing for their custom - ers or users," says Mr Fields. Many successful business trans- formation strategies also draw on insights from the organisation's partner network and sometimes involve new partnerships with start- ups or other organisations. "The more that they're looking at a range of both internal and external ways to bring in new ideas and properly test them, the better," says Gate One's Mr Holliday. While Ms Molodtsov at Sia Partners UK believes innovation partnerships can have many pos - itives, she says businesses need to think carefully before embarking on them. "You have to make sure that your values and your vision are aligned," she explains. "When people representing differ- ent value sets and different ways of doing things say 'we're going to go to market together', people instinc- tively start cutting up the invisible pie. They start talking about how something is going to look and how they are going to co-brand it, when what they should be focused on is the market. Go out, pilot something and then, if it's successful, you can start having those conversations." The pace of change will no doubt generate many more of these con - versations in the future as compa- nies look to respond quickly to new desires and demands. Although it's impossible to predict exactly what these will be, one thing seems cer- tain: if the rate of change on the outside an organisation currently exceeds the rate of change on the inside, it's unlikely to be around to fulfil them. Change is the new normal BUSINESS TRANSFORMATION @raconteur /raconteur.net @raconteur_london Transformation projects used to be singular events; now change is an everyday part of life so businesses and their leaders constantly need to adapt to thrive Oliver Balch Freelance journalist, specialising in business, sustainability and travel, Dr Balch is currently based in Portugal. Cath Everett Freelance journalist specialising in workplace and employment issues, she also writes on the impact of technology on society and culture. Francesca Cassidy Freelance writer specialising in lifestyle and business topics, she contributes to a range of business and consumer- facing publications. Karam Filfilan Business editor and writer specialising in human resources, future of work and innovation, he was previously deputy editor of Changeboard. David Cowan Author and editor-at-large of The Global Legal Post, Dr Cowan specialises in a range of legal and economic issues, and is a regular contributor to The Times Literary Supplement. Duncan Jefferies Freelance journalist and copywriter specialising in digital culture, technology and innovation, his work has been published in The Guardian, Independent Voices and How We Get To Next. Distributed in Duncan Jefferies Contributors Publishing manager Ed Prior Digital content executive Francesca Cassidy Head of production Justyna O'Connell Design Joanna Bird Grant Chapman Sara Gelfgren Kellie Jerrard Harry Lewis-Irlam Celina Lucey Samuele Motta Head of design Tim Whitlock Associate editor Peter Archer Managing editor Benjamin Chiou Although this publication is funded through advertising and sponsorship, all editorial is without bias and sponsored features are clearly labelled. For an upcoming schedule, partnership inquiries or feedback, please call +44 (0)20 3877 3800 or email info@raconteur.net Raconteur is a leading publisher of special-interest content and research. Its publications and articles cover a wide range of topics, including business, finance, sustainability, healthcare, lifestyle and technology. Raconteur special reports are published exclusively in The Times and The Sunday Times as well as online at raconteur.net The information contained in this publication has been obtained from sources the Proprietors believe to be correct. However, no legal liability can be accepted for any errors. No part of this publication may be reproduced without the prior consent of the Publisher. © Raconteur Media raconteur.net ferdinandstohr/Unsplash T R A N S F O R M A T I O N J Constellation Research 2018 Build a competitive advantage in the current market Implement new, data-driven business models Reach and engage with customers more effectively TOP THREE OB JEC TIVES OF DIGITAL TR ANSFORMATION Cross-industry survey of decision-makers 61% 50% 25%

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