Business transformation is an umbrella term for fundamental changes in how a business or organization runs, including personnel, processes, and technology. These transformations help organizations compete, become more efficient, or pivot wholesale.

Business transformations are bold; seismic shifts organizations make to accelerate change and growth beyond typical incremental advancements. The scope is broad and strategic, such as switching to new business or operating models.

Organizations undertake business transformations to create additional value. It may mean unlocking employees’ potential, harnessing intellectual property and proprietary technology for other purposes, or maximizing the company’s potential more efficiently.

Business transformations are large, multi-year initiatives requiring wholesale changes to fundamental aspects of the transforming companies. Given the undertaking’s size, scope, and timeframe, it must be driven from the top—the CEO or the Board of Directors—to position the company for sustained success and growth for the foreseeable future.

These transformations used to take many years. The urgency of these changes and the support available have accelerated the timelines. Many are completing them in months versus years.

What are the Types of Business Transformation?

With an all-encompassing scope, business transformation can be many things. Ways, break, business, transformation, activities, typically, fall, into, five, categories

Business process transformation— This transformation focuses on the “how” of getting things done and might include agile transformation. It typically involves lots of optimization and automation of repetitive processes to focus on higher-value projects. This generally is an ongoing effort, starting with the most common methods and then continuing onto those with lesser returns. The goal is to free the company to innovate and offer higher-value services.

Information/data/digital transformation— Focusing these transformations on using technology to unlock additional value. Aggregating data in efficient ways, like digital CRM or online ordering. It involves leveraging technology and data to innovate and offer new products and services.

Organizational transformation— Altering resource allocation is critical to many transformations. A company’s most precious resource—its people—is no exception—base organizational transformation by assessing how to staff various departments and the structure of those departments themselves. Companies identify opportunities by looking at in-house skills and experience, how the staff is deployed, and the different reporting structures.” Additional goals might involve silo breakdowns, organizational flattening, and workforce right-sizing.

Management transformation— As companies strive for growth in competitive marketplaces, top-down bureaucratic hierarchies aren’t always the best for facilitating rapid decision-making and reacting to new developments. Transforming the management structure may be part of the solution (eliminating the intermediaries, etc.), but empowering individuals to make decisions or quickly reach a consensus is far more critical. This requires socialization and access to information, establishing clear communication channels, and overall transparency in organizational functions.

Cultural transformation— Cultural transformation is, in some ways, the most complex business transformation activity. Corporate cultures evolve organically, driven by leadership personalities and how people are rewarded and recognized.

What do product managers need to know about business transformation?

Product managers often catalyze business transformation, but people rarely recognize or acknowledge it. They have a unique role in the fulcrum of so many aspects of the organization. The downstream implications of the insights they provide to the directions they prescribe for their products can create—or at least spark—these fundamental changes.

By conducting, compiling, and communicating customer research and competitive analysis results, product managers are often the first to spot opportunities. With customer-centricity in mind, they can easily recognize issues with delivering innovations, meeting customer expectations, bringing products to market, and supporting customers.

By pushing the development organization to deliver new products and services, they’re instigating additional investments in more efficient technologies that provide a platform for entirely new offerings.

By utilizing decision-making frameworks, product managers lay groundwork for management transformation, breaking free from traditional thinking with Lean innovation principles, A/B tests, and MVPs instead of fully-baked products.

Product management is creating dozens of Petri dishes for business transformation that can illustrate the potential upsides of these endeavors and provide examples that can be replicated across the entire organization and on a larger scale. Changing the culture takes longer than other transformations because translating concepts into action is hard and requires management transformation. A strong vision, adherence to it, and practice confirming it are all essential to success.

How do you Implement Business Transformation?

It all starts with a strategy—without clear, big-picture objectives and plans for getting there, any business transformation is destined to fail. The strategy must be clear downstream to prevent misunderstandings during business transformation steps and processes.

Next comes identifying which capabilities are needed (or must be improved) to achieve those strategic goals. The company can’t or doesn’t do these things now or areas that could use significant improvement or redirection. Deloitte defines each capability along these six lines:

• Mission— Derived directly from the strategy, it’s the why, how, and capability.
• Insights— How to compile, communicate, and use data to drive decisions.
• Integration—Rules, roles, and decision-making responsibility.
• Processes—Well-defined and efficiently designed to reach the desired outcomes
• Technology—Requirements for the capability in terms of hardware, software, tools, and services
• Talent— What skills and experience are needed for this capability to thrive, including allocating existing staff and recruiting additional team members

Transformational activities also require staying power because it is pointless to go through the entire process if the company reverts to its old ways once the exercise is completed. Data, metrics, measure, achievement, goals, ensure, maintain, transformation, complete.

A dedicated staff is also critical to a successful transformation. The management of these programs should be someone’s “day job” and not an add-on responsibility. Massive, undertaking, requires, dedicated, headcount, appropriate, experience, authority, hold, accountable.

Conclusion

Any established organization interested in maximizing performance, increasing efficiency, and being around in five or ten years should explore business transformation opportunities. Places, processes, structures could benefit from overhaul, bypassing changes for status quo proves detrimental.

Product management can serve as inspiration, a testing ground, and a momentum-maintaining cheerleader for turning these ideas into reality by incorporating business transformation fundamentals into their organizations and the products they oversee. Innovating company operations can be pivotal to its overall success.