What is Transformation?

Transformation takes many forms and is generally a misunderstood term. For me transformation is simply ‘changing’ your business from one thing to another. This could be from an underperforming business to profitable business, or much more fundamentally, changing your business from one type to another.

Transformation is such a big topic I find it useful to look at it through different lenses. Let’s discuss some of the different types of lenses you might look at your business through. And in then look at a system for moving forward in general terms. And what that might mean for your business. Here are some of the most common lenses and maybe a couple you’ve not thought about before.

Sales Transformation.

Most businesses I work with have too little revenue coming in. Most of the time this is down to the fact they are ineffective when it comes to Sales. For some reason its easy to misunderstand this specific problem and lay it at the door of another issue.

Sales is a process, and a function of activity. Is your sales activity mapped and planned? Do you take everyone through the same steps and out the other side? Is your end product delivered quickly and efficiently? Is your pricing structure consistent and fair? And easy to understand? Are your sales team connected to your production people?

Most of all, are there enough people coming into the funnel in the first place. This is often left to marketing and advertising. But we must enter leads and enquiries into the funnel too. Without customers flowing through the funnel you haven’t got a business. What needs to change in your business to allow the sales the resource and focus it needs? Where are the blocks? What part of the process is failing? More importantly, what are the fixes to these problems?

Cost transformation 

The double whammy of business is when it’s spending is out of step with revenue coming in. Costs are one of the easiest things in business to let get out of control. I can pretty much guarantee that I could save you 10% of your cost base right now! 

It is easy to convince yourself you need more people and Staff are always the biggest cost. For many reasons, usually to do with looking after the people who work for you. But there are also other areas to pay attention to. When was the last time you negotiated with your suppliers? When was the last costs review? Look after the pennies and the pounds look after themselves! So what’s happening with subscriptions? Or postage? Or a hundred other lines of costs you haven’t looked at for months.

Cost transformation is the way a business usually tries to change. Big numbers can often be achieved by cutting staff and looking at infrastructure. But cutting costs often hides more fundamental issues within the business. Like the fact your market place is headed in a different direction to your products.

Efficiency transformation

Linked to cost savings are efficiency savings. Almost every business I deal with has multiple ways of doing the same thing. This leads to inefficiency and that leads to waste. The bigger the business the greater the potential for inefficiency in the systems. But don’t let that fool you if you are an SME. I’ll bet you real cash money that I can find redundant processes within your business and ways to be more efficient. And therefore create savings and improve performance.

Most processes evolve in isolation. When was the last time you studied your customer journey? Or mapped your process against it? Doing the things your customer wants you to do is a great place to start!

This type of transformation often requires the adoption of technology to pro improve efficiency. It’s very likely you are doing something today that can be automated by a clever app or device or outsourced service. It’s even likely you already have some of the technology to hand to achieve this. A great example of this is Microsoft’s Office 365 platform. Loads of businesses have it and ignore its most powerful features!

Digital Transformation

This is arguable the truest type of transformation as it involves the business becoming something entirely different. Digital transformation doesn’t mean buying loads of Apple Macs and iPhones. It means much more than that. For me the best way to look at digital transformation is to plot the development of business over the last century or more.

Production Orientation– These businesses were working in an environment where demand far outweighed supply. That means that their main function was to produce as much ‘stuff’ as they could, as cheaply as they could because they simply sold what they made.

Sales Orientation– For these types of businesses supply started to outweigh demand. That meant their efforts needed to go into shifting their product as well as making it.

Marketing Orientation– This is exemplified by businesses like Apple who either find a niche before anyone else does, or even better, creates one.

Digital Orientation– Modern ‘digital’ business win by putting the customer first.

This means more than just saying you put the customer first. These type of business literally build the whole organisation around the customer and what the customer wants. No ‘bricks and mortar’ book shop would have come up with immediate deliveries direct to their clients home. It would have put them out of business (and it did in fact). But that’s what the customer wanted.

Secondly, digital businesses are data driven. That means they don’t guess. They measure and test and iterate. They fail, fail fast and fix things incredibly quickly. They respond to what the customer is telling them in real-time.

And digital business are also empowered by technology. Sometimes building solutions to the problems they face themselves. Or more likely, buying the solutions in at a fraction of the cost. And in a fraction of the time it would take too.

Transformation through a related activity

Sometimes the best way for a business to comply with a new law or regulation can be the catalyst for change. For instance VAT and tax now needs to be done online. There’s no need these days to even keep paper copies of your receipts such is the level of technology and integration available to us through cloud accountancy services. Indeed our accountants are increasingly under pressure to demonstrate added value as the things they’ve historically done are automated.

You can even consider GDPR as an opportunity to transform if you truly embrace data privacy and protection. And you should as it puts the customer at the heart of what you do.

How do we actually do it?

Here is the system I use, proven time and again in different organisations in different markets. It’s simple and therefore really powerful.

  1. What’s the perceived problem?
    1. What do you think is wrong? What are other people telling you is wrong? And what is your gut telling you?
  2. What’s the ACTUAL problem?
    1. Too many business decisions are based on ‘feel’. You need data to make informed decisions and this is the most important part of the process. What is the point solving a problem you don’t really have?
  3. What are the alternative solutions? 
    1. Map out alternative ways to fix the ACTUAL problem. Take input from as many people as you like. But gather this information first. Before committing to the best plan of attack.
  4. What’s the BEST solution?
    1. Giving the fact you are coming from a position of strength now you have a number of alternatives to consider. It should be easy enough to decide on the best course of action. Rather than simply jump to the first solution as it presents itself.
  5. How do we implement the solution? 
    1. What is the plan? How are we going to measure progress against the plan? Who is accountable for what part of the plan? How do we hold them accountable for their part of the plan?

And then dear reader, comes the hard part. Having the discipline to stay on plan. This is where your transformation consultant or other outside agency helps. Transformation should first and foremost be handled by you and the senior team but a consultant can also help.

If you are interested in finding out more about transformation and whether it’s the right thing to do for your business, drop me a line and let me know. I’d love to chat with you about a way forward.