Our experiences through the COVID-19 pandemic, recent and large-scale natural disasters, and the Russia/Ukraine conflict have highlighted the importance of enterprise resilience and digital preparedness.
In this ever-changing landscape, enterprise transformation is all around and happening at a pace and scale that might once have been unimagined.
However, many changes have been understandably responsive to urgent needs and not always executed as part of a well thought out transformation strategy. Often, enterprises have leapt straight to a new operating model or technology suite – but without understanding what they are really trying to solve for.
This can mean the solutions are not fit for purpose, functions work in siloes, and the workforce is not doing what it was hoped they would do.
It can also create change fatigue, impact the customer experience and brand legitimacy. Quite simply, it can mean the transformation doesn’t deliver return on investment. A much smarter approach is to take a step back and ‘architect’ a deliberate and dynamic transformation.
This starts with getting clear on the transformation’s purpose, understanding the type of transformation that you are undertaking, then sequencing a path and pace to get there that considers the enterprise’s whole ecosystem. Deliberate transformation means staying focused on the ‘north star’. Dynamic transformation is being flexible when you need to be, and treating transformation as a continual evolution to always remain relevant to survive.
Uncovering the 'why' of transformation
The most successful enterprises don’t just embark on a transformation journey simply to transform, or to be digital. Instead, they have a very clear purpose for the transformation, and a goal to realise value and return on investment – whether measured in financial, cultural, reputational or other terms.
These enterprises will ask; Why are we transforming? What are we transforming to? What are the value drivers? The transformation will cost money and time, so are we really clear on the ‘north star’ driving this?
This ‘why’ needs to be ascertained from the stakeholder environment – the customers, employees, shareholders, the board and community. Where are their pain points, where are the opportunities?
Where can new, valuable connections be made? How can the customer experience be continually improved? With this probing, a future state for the enterprise is clearer, the people and organisational risks are evident, and then the transformation’s real purpose is revealed. It is then possible to design your operating model and service delivery model to achieve this vision.
Understanding your transformation type
Some different transformation types that we commonly support at KPMG include:
- component transformation (across the entire organisation – for example a data lake or a payments capability)
- functional transformation (powering payroll or HR functions)
- enterprise transformation (operating model transformation including experience and digitisation)
- to support Environment, Social and Governance (ESG)/sustainability agendas
- connecting the organisation, for efficiency and stakeholder trust
- transformation as a result of mergers, integration and separations
- performance improvement.
Across these various types of transformations, there are different ways to shape and deliver them for the best outcomes. Therefore, understanding your transformation type can help to inform the right sequence and pace.
Building your transformation roadmap
Building a roadmap for the transformation requires consideration of the type of transformation that you are undertaking, and how it will link into, or impact, the entire enterprise’s ecosystem. The roadmap needs to be sequenced and paced without losing sight of what you are trying to achieve.
The interdependencies of a transformation can be quite complex across functions and services, so it is important not to leap straight to solutions, such as the technology platform you will use.
Instead, you need to spend time in the uncomfortable state of ‘disequilibrium’ to think about where you are going and how you will get there. This involves planning and articulating the direction of travel and what the ‘new’ enterprise will look like in the future. What will the change mean to the employee, the customer, or other stakeholders?
The resulting roadmap needs to connect the enterprise with customers and citizens, suppliers and alliance partners, and your people, systems and processes.
Considering the pace of change
When architecting deliberate and dynamic transformations, it is essential to remember that you are also architecting the stakeholder engagement model and their experience.
Getting the pace right is a key part of this. With all of the programs of work that are underway, the question to ask is 'how can you pace them to align with the capacity, capability and readiness to transform?'
Without considering pace, people can quickly get transformation fatigue, or feel they are constantly in a state of disruption without ever achieving anything.
Building in ‘signposted moments’ along the way that recognise and celebrate achievements keeps people motivated for the next round.
Other factors driving transformation success
In addition to purpose, type, sequencing and pace, there are other factors to architect into transformation success.
For example, leadership needs to be courageous and the right transformation partner needs to support this courage with constructive challenges and keeping the transformation focused.
The authorising environment for the transformation also needs to be set up for success, with the transformation led from the most suitable part of the business, and people at management level in particular engaged and ready to deliver.
Likewise, building a culture of transformation is essential, as is taking people on the transformation journey. Everyone needs to be aligned behind what you are going to do to transform.
Leadership, culture and other human elements to transformation will be explored in more detail in subsequent articles in this series.
How KPMG can help
If you are looking to transform, whatever your transformation ‘type’ we are here to help.
We bring our strengths in areas such as transformation architecture, change management, technology implementation and more to deliver the right support to your unique circumstances.
We work with you to understand – across your enterprise and ecosystem – where there are opportunities for change, your purpose, and how you will get there.
With our deep experience across numerous transformations in different sectors, we understand how to sequence, pace, lead and engage, driving towards an outcome of real value – ensuring you remain focused on your north star.
We also help you be dynamic and ready to make new decisions if the environment demands. Importantly, we show up and anticipate for you the key moments that matter in your transformation journey – always considering the human element of the transformation journey.
