As a result of the crisis management, many companies have already successfully implemented initial changes and are initiating new topics for implementation. We are experiencing a seamless transition to a phase of transformation that not only involves risks, but also opportunities. We have summarized a few of the success factors for sustainable transformation.
In nearly all industries, a momentum of increased willingness to change has emerged in recent months. We have to accept the fact that many businesses will not return to their original status with their well-known rules of the game.
It is not only the way companies collaborate, communicate and digitize that has changed due to Covid-19. We are also experiencing, for example, how the balance of power in our supply chains is shifting, how value chains are reorganizing themselves and how mergers and acquisitions landscape is becoming more dynamic. The generated momentum can now be actively used to set a few new directions.
The first step is to critically review your vision in the organisation: Does the corporate vision still fit into the changed "eco-system" that will be there after the transformation?
This requires a better understanding of the success factors of future business – in a business environment that will be different tomorrow than today. It is no easy task to sketch out possible visions of the future that are plausible, consistent and comprehensible in times when planning is difficult. But – the right time to develop a vision out of it that is meaningful and desirable for the employees. Now is the right time to set such processes in motion and to closely involve the employees.
Although planning in the classical sense is difficult to do at the moment, it is even more important – according to Simon Sinek – to deal primarily with the Why. In turbulent times, this is the strongest source of meaning and inspiration for the most important resource in companies – our employees and managers.
The current phase is an excellent time to "clean up" and stop doing things that no longer seem appropriate in the current situation. One of the success factors of transformation is focus. We can no longer allow ourselves to push ahead with things that distract us and lead to misdirection of our already limited resources. Fredmund Malik sees this "systematic waste removal" as one of seven tools that every manager must master and which gains dramatically in importance in times of crisis. It is a process of continuous and systematic self-renewal. The task consists of objectively and emotionlessly questioning and evaluating all existing activities, whether they really contribute to our vision or not. If we are critical of ourselves, we find it difficult to simply stop existing activities. We should avoid this “effort-justification effect” in phases of transformation.
The Corona crisis has made it clear how important networks are as an enabler for agility in our companies. This refers to the connection between business units, central functions and market units, but also to the network of and between core processes (such as planning processes, budget processes, risk management, product development, etc.). The frame of reference for connecting structures must always be the business relevant activities.
The period during the Corona crisis has also shown how traditional, rigid structures and hierarchies ultimately block the accomplishment of important tasks. In the past, hierarchies were established in companies with the aim of making structures calculable. This also created the biggest obstacle to networks and connectivity. The network structure is not calculable. Promoting connectivity means in a first step not to prevent connectivity and also the willingness to give up power.
Only through such networks can we generate the necessary ability to change and agility, which is so crucial to success in dynamic times. To achieve this, rigid structures have to be broken down bit by bit. This refers to structural boundaries (e.g. corporate divisions), excessively rigid board structures and planning processes that are imposed on us at fixed intervals throughout the fiscal year.
However, it is not a question of allowing "anarchic conditions" and connecting people in the company in an uncontrolled way. Sensible connectivity requires very clear framework conditions and defined feedback mechanisms. Quality assured processes are therefore the basic prerequisites for the functioning of networks and organizational learning.
A tightrope walk lies ahead of us here: finding the right balance between the necessary structures and processes and the necessary degree of connectivity and participation.
We now have the unique chance to use the already existing momentum and willingness to change in our companies for reorientation. At the same time, we have to part from things that no longer fit into the target picture. This leads to a new focus and transparency in our actions.
We have to use feedback loops to interlink measures, goals and results and to connect the right people with the activities critical to success. In this way, we put the implementation work in the transformation on a broader basis and, as a company, achieve new qualities of agility and capacity to act. Qualities that will equip us for the future and ensure long-term viability.
I wish you good luck.
Your Ronald Herse