Business Transformation (BT) has been the phrase of the month for quite a while now, and countless consultants have amassed wealth delivering whatever BT is to clients who have been willing to suspend disbelief and get past the price tag for the sake of the sound of the concept.
Too cynical? We confess to a bias, as working consultants, for turning hopes into reality over creating impossible dreams. Sort of a Little Engine That Could yin to the yang of Don Quixote.
BT through technology
But what is Business Transformation? Maybe the definition depends on who's selling it. For some, BT is synonymous with the implementation of new systems, often enterprise technology solutions.
Yet it seems to us that a lot of these enabling technologies aren't so much about transforming processes as they are about conforming processes to their definitions (and limitations). That's generally a recipe for disaster.
We daren't speculate about what percentage of enterprisewide systems implementations never get beyond the finance and accounting modules because organizations and their resources collapse from exhaustion before the nuts and bolts of the operation can be fully integrated into the enterprise solution. And that's to say nothing of the considerable financial and IT resources required to customize the systems to meet operational realities.
Take the case of the billion dollar corporation that undertook an enterprise resource planning (ERP) implementation. Ten years on, the supply chain folks do not have systems support that is user-friendly and process-enabling—and nothing resembling warehouse management functionality. In addition, the operating end of the company has felt compelled to develop—haltingly and in-house—systems that approximate order management. They remain a work in progress five years into the exercise.
As you might expect, this tends to have a demoralizing effect on the staff. Operational folks get pretty jaded pretty quickly when they discover that transformation isn't going to make their work lives any better, and may make them worse.
BT through process
Other will tell you Business Transformation is all about process—that is, re-engineering an organization's operating procedures to eliminate waste and allow it to do more with less.
But there can be an unfortunate tendency among the promoters of process-driven transformation to seek brilliance, breakthrough, and strategic redirection. Sometimes, radical and unconventional thinking is useful; sometimes, it is even on target. And sometimes, it is a futile and counterproductive exercise.
When process redesign pursues change for the sake of change, new strategies for the sake of perceived elegance, and radical options for the sake of shock value, there are serious risks that the people who have got to make all these things happen will refuse to get on the bus. Adding outsourcing to the mix can make for an even more combustible situation.
We know—first-hand—of a case in which self-anointed masters of innovation devised, and attempted to ramrod through another billion dollar enterprise, a solution set that simultaneously threw part of the operating organization out on the street, threatened a significant part of the remainder with replacement through outsourcing, and alienated mission-critical components of the supply base. Brilliant.
BT through people
Others will tell you the key to Business Transformation is to focus on the "people" component of the "people, process, technology" mantra we all love to cite. Today, there are battalions of consulting specialists who focus on "organizational development": building high-performing teams, effective communications, building (or rescuing) business relationships, understanding styles and motivations, roasting marshmallows around the campfire, working and playing well with others, and so on and so forth.
Good stuff, all of it. But borderline pointless if done without clear linkage to business purpose and business outcomes.
We are reminded of the prospective client that wanted organizational development training, which it defined as a two-day workshop to be awarded to the lowest bidder. The company had somehow gotten the idea that such training would lead to dramatic improvements in operating performance and customer relationships. But it was badly misled. Two-day retreats are no substitute for the hard work of mastering the techniques involved in building effective internal and external relationships—and of relating them to business objectives of revenue, profitability, quality, performance, and sustainability.
What if ...?
Bottom line: Technology- and process-driven approaches to business transformation will not produce sustainable results if the "people" part of the equation is ignored. "Feel good" organizational development initiatives will be of limited value without continuous improvement in the process and technology dimensions.
Until and unless we can get to genuinely integrated Business Transformation programs that deal simultaneously with people, process, and technology development, we're destined to fail in our attempts at transformation.
The good news is, all this talk about integrated programs is not conceptual. It's real. A few pioneers are doing it now. Unlike pioneers in some other initiatives, they're not returning with arrows in their backs. They're coming back with transformed businesses—and money in their pockets.
But we've got to confess. These programs are more difficult to put together—getting the right parts in the right sequence— than methodology-driven approaches to systems and technology or process engineering solutions.
Where the effort and investment pay off is in their repeatability and in their embedded continuous improvement components, which deliver value year after year after year. And which include continuing development of the human potential that keeps them going.