Transformational Strategy Design & Implementation

What is Transformational Change?

Transformational change occurs when a company engages in big league business maneuvers where the results will be either “make it BIG” or “break it BAD.”

Examples of opportunities for great gain or great loss include core business process improvement / reengineering, mergers and acquisitions, competitive strategy changes and ERP (enterprise resource planning) implementations.

There has been no better example of big change than organizational reengineering. Michael Hammer and James Champy (authors of Reengineering the Corporation, Harper Collins Publishers, 1993) said that in the broadest sense reengineering is “starting over”. Their formal definition is: “the fundamental rethinking and radical redesign of business systems to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed.” And now, more than a decade later, after companies have used process redesign to drive out non-value-adding costs in the back office and on the production floor, Dr. Hammer is advocating the use of process redesign and process management to fuel growth and operational innovation – the process-centered enterprise.

The process enterprise reinvents itself on an ongoing basis to produce a steady stream of performance breakthroughs and stay ahead of the competition. The key question for organizations is how to significantly improve cost, quality, service, speed, product development and sales and marketing simultaneously. Understanding technically how to reengineer business processes does not ensure success. What does increase chances for success is effectively using principles of change management. Managing resistance to change in an organization is by far the hardest part of strategic change … and the part least receptive to a mechanical approach. But a mechanical approach is exactly what’s needed in order to implement change with any chance for success – what we call engineering organizational change. Accepting this challenge and beginning to address it early in a change effort will allow the organization more time to accept the change. Unfortunately, many organizations embarking on a big change focus more on designing the new strategy or identifying and analyzing the process innovations, which are typically relatively easy by comparison.

What’s the Difference Between Transformational
Change and Continuous Improvement?

Transformation and continuous improvement are to CEOs what a driver and putter are to professional golfers. They are different yet complementary. And they are both needed to win.

Both transformational change and continuous improvement:

• Emphasize customer satisfaction
• Use performance improvement measures and problem-solving techniques
• Focus on business processes
• Use teams and teamwork
• Bring about changes in values and beliefs (when successful)
• Work to drive decision-making down to lower levels in the organization
• Require senior-level commitment and change management for success

There are key differences, however.

Transformations focus on large, cross-functional processes and entire business systems. As a result, transformational change can neither be initiated nor sustained from the bottom or middle of the organization. It is driven from the very top by a leader who believes that nothing is more important than improving the performance of major business processes and who is willing to do whatever it takes to make it happen.