There are many qualities that define a strong leader - and those qualities will shift depending on the person and the circumstance. However, it is when leaders are tested in time of great transformation that a leader’s true potential is discovered. Transformation can be daunting, but it can also be the key to true success. Read below for 6 factors of business transformation - how to identify them and how to apply them.
I love Chris McGoff’s distinction of CHANGE VS. TRANSFORMATION in The PRIMES. Change is improvement on the past (e.g., better, faster cheaper, ______er.) Transformation is something else altogether – a new thing, designed to achieve a vision of the future that isn’t here yet and will be created by us. Transformation is what happened to Shell Oil in the mid 70’s when they redefined themselves as an energy company instead of an oil company. Transformation is what happened when the Internet turned into the web thanks to intuitive interface inventions, like the hyperlink and the browser, that organized information for human consumption instead of computer consumption. Transformation is what happened when Zappos gave customer service agents free reign to make customers happy instead of instructions about how to handle their calls.
From the outside, transformation can appear magical, like the emergence of a butterfly from a cocoon. But when we look deeper, we see very definite patterns, which are repeatable if not predictable. These patterns are what make transformation more of an art than a science.
Below are the key elements of any business transformation:
What is ‘radical success’?: In any transformational effort, the definition of success initially sounds a little crazy. Zappos went for 100% customer satisfaction, Shell set a target that a meaningful percentage of their revenue would someday come from chemical products. Looking at these goals with 40/40 hindsight, including how the market and technology developed, makes sense. However, from the perspective of where the market had been, and prevailing norms at the time, these were radical goals. Define what radical success will look like for you.
Understand the trade-offs: It takes more than just a dream of the future to motivate groups of people to change, much less transform. For people to get up and move, they must not only be able to understand the radical definition of success you offer, they must also believe that complacence with the current situation is not an option. The major inhibitor to transformation isn’t failure, it’s inertia. The catch in business is that you have to counter the inertia of many different people, all motivated by different things. Chris McGoff has identified the three ways people are motivated – intellectually, emotionally and financially – to transform in his STAKE PRIME. If you want to start seeing Change and Transformation happen in your world, start asking people what’s at stake if things stay as they are.
Rear view mirror: Make sure you honor the past and take from it a few things of value, but don’t let it be your guide. Transformation is like reading the wind while sailing, you may have to tack to one side and then the other, but your horizon point is always the goal. Shell could not grow the chemical business by doing things the way the oil business worked. They had to stay focused on doing what was necessary to grow a new kind of business and adapt their company along the way.
Find what is working: Once you’ve really unhooked from the past, you have tremendous freedom to try new things. Many won’t work, and that’s ok, because you’re learning what does. Fail fast. When you find out what works, do more of that and learn from the wisdom of failure. Sure, you have limited resources, which provides some urgency, but there’s too much at stake and no going back, remember? The development of the Mozilla browser birthed the internet. Although Netscape (the company that productized Mozilla) isn’t around anymore, its investors made so much money, they are now the Silicon Valley funders of much of the technology underlying the Internet.
Just let it go: Skilled transformers are always ready to release that which has outlived its usefulness – a brand, a technology, a market, or a customer. Microsoft is actually a good example of doing this well and failing. Under Bill Gates, Microsoft first ignored the Internet because its business model relied on multiple private enterprise networks, not a single, public, open network. After Netscape’s wild success, however, Microsoft saw the writing on the wall and risked much of its product integrity to transform itself successfully into the dominant Internet-savvy company for a time. With the successful release of Internet Explorer, it succeeded in dominating the desktop software market once more, putting Netscape out of business. However, while adapting its products to the Internet, it did not become Internet-centric and remained vulnerable to Google and subsequent Cloud initiatives. It remains to be seen whether Microsoft can, or wants to, transform itself fully into the Cloud. There is always a little bit of caterpillar carcass sticking to us and we must be ready to shed it the moment we are certain it’s holding us back. The art is in learning to know when that moment to let go actually arrives, when you can begin leading your customers just as they are ready to let go too (you don’t want to get too far out in front of your customers).
Embrace risk: There are no guarantees in life and there are certainly none with transformation. If transformation is anything, its unpredictable. Those that survive and thrive in it pay close attention and adapt quickly, managing and mitigating risk instead of trying to avoid it. Quite often the secret to success comes at odd times and in odd forms, and if you don’t open yourself to risk you’re not likely to discover it.
Because it’s an art more than a science, the way to learn transformation is to experience it. Sometimes we’re thrown into a situation where we have no choice But an opportunity we do have all the time is to become adept at transforming ourselves. It’s not just businesses that can transform, people can too, and transformative leaders are often transformative human beings who become skilled at managing transformation in their own lives as well as at work. Research says that it’s a small percentage of people – 5% – that can do so, but I take a broader view of transformation. I think we can become skilled at it if we try. We transform from children into adults, our bodies are biologically transforming all the time and everything I listed above is available to us all personally at any time. All we have to do is want that brighter future, understand what’s at stake if we stay where we are, and step boldly out to let the past go.
What do you think? Do you think transformation is hard? Do you think anyone can do it if they try? Can any company? What’s your experience with transformation?