5-step Process for Business Transformation and Organizational Stability

5-Step Process for Business Transformation and Organizational StabilityDuring the past few weeks, I’ve spoken with many business leaders in the GCC. The topic on every one’s mind is, of course, the economy and how their business can weather the storm. Many of these executives had read my previous posts on restoring an organizational immune system, and on reducing complexity in key areas to increase business stability. Most of them had the same question: where do we start?

The answer is to start at the top – with those in charge of leading the business. The 5-step process below begins there and provides a roadmap for mobilizing the entire organization in support of transformation. It’s important to realize that business transformation isn’t a miracle cure for all business problems. It’s an ongoing journey and a continuous process. There’s no one end point, but every step you take will be a lifesaver for your company. Here’s how you can make sure you’re moving in the right direction:

Step 1: Mobilize Executive Leadership – Develop the KISS Strategy

Organizational change begins with executive leadership, and the first step is to redefine the organization’s strategy in light of current conditions. Often, strategy begins with an overall financial objective, such as return on investment or capital. These days, a financial goal may not be enough; executives must also devise a strategy that enables the business to adapt quickly to new and often unfamiliar terrain. This means understanding, improving and simplifying processes and infrastructure to make the business more agile. It also means enlisting everyone’s help and challenging them to think differently and creatively about the business.

Step 2: Translate Strategy into Tangible Terms – Create a Balanced Scorecard

The second step is to translate the resulting strategy into tangible terms, and communicate it down the chain of command to the tactical level. One way to do this is to develop a corporate balanced scorecard that defines the strategy from four inter-related perspectives:

  • Financial Perspective - What financial objectives must be accomplished to satisfy shareholders?
  • Customer Perspective - To achieve the financial objectives, what customer needs must be met?
  • Internal Process Perspective - To satisfy both customers and shareholders, what business processes are critical?
  • Infrastructure Perspective - To improve and optimize the critical processes, how must the organization be equipped?

Although the Financial and Customer perspectives are developed at a high-level, identifying critical business processes and equipping the organization with an effective infrastructure is accomplished at both the mid-management and employee level.

Step 3: Align Business and Support Units – Cascade Priorities

After you identify the systems and processes that are critical to the success of your business, the third step is to assign metrics, or Performance Indicators (PIs), to the outputs of each core process. For example, if you manufacture products, your core processes are likely marketing and sales, research and development, manufacturing, and purchasing. Each of these processes has certain outputs that should be measured by relevant PIs (e.g., an output of the manufacturing process is the number of units produced, which can be measured for a particular time period to establish a baseline metric).

The same logic applies to transactional organizations, such as hospitals, government agencies, banks, hotels, etc. The outputs of a service-based process may be less tangible, but they can and should be measured to track whether the organization is achieving optimal service levels.

In either case, the trick to aligning infrastructure and processes with strategy is to identify and monitor the metrics, or Performance Indicators (PIs), that support the organization’s strategic goals (e.g., Key Performance Indicators, or KPIs).

Step 4: Motivate Teams for Effective Implementation: Link and Reward Performance

We can’t forget the people component of all this, which is the fourth step. From the CEO to the executive team, mid-managers to project owners, leaders must be able to convey the overall strategy and supporting objectives in a manner that empowers the rest of the organization. This calls for more than simply managing the performance of others. It means guiding direct reports through activities and projects that will enable the organization to meet specific goals, while still maintaining daily operations. This requires an array of leadership skills, such as the ability to take action, provide direction, identify and eliminate distractions, motivate others and facilitate team success.

Leaders must also empower their best and brightest employees to become experts at understanding, improving and simplifying the organization’s core processes. Money and time must be set aside for training and professional development in the areas of Performance Excellence (e.g., Lean Six Sigma), innovation and leadership development. It’s not enough to send a few employees to training and then expect them to make change happen from the bottom up. The commitment to process improvement and organizational stability must be supported from the top and thoughtfully deployed throughout the organization.

Step 5: Strive for Perfection – Repeat the 5-step Strategic Process

Finally, this cycle of transformation must be integrated into the organization and embodied at every level. Go beyond these steps as a one-time checklist, and make the continual pursuit of perfection your goal. The hardest part is getting started. Once employees see how their contribution can make a difference, and management begins to see the positive effect on the company’s bottom line, a powerful momentum will motivate change. With each cycle of this five-step process, your organization will become healthier and more stable.

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Kamal HassanKamal Hassan is President and CEO of Innovation 360 Institute, and is responsible for leading the company’s global operations and customer acquisition.

This entry was posted in Headlines, Leadership, Management, Strategy. Bookmark the permalink.

12 Responses to 5-step Process for Business Transformation and Organizational Stability

  1. This is a very nice blog and I have get good information from here .

  2. Carla Zilka says:

    Sure sounds alot like my book: “Business Restructuring: An Action Template To Reducing Cost and Growing Profit.” Regardless, transformation is a complex process, that if done incorrectly lowers the productivity of the organization and can stall it from advancing. One blog is just enough knowledge to make you dangerous to your organization. Do your research first before trying any transformation or restructuring on your own.

  3. Good overview of the entire process. It’s the traditional recipe. Discipline to keep this happening is fundamental.

    I think this is meant to big business. What about to small businesses?

  4. Absolutely agree, and have enjoyed your previous posts also BTW. One addition, if you will, which you might have already considered under “Infrastructure Perspective”?

    To say that transformation requires a lot of change sounds trite but so many do not act on this critical fact – consideration must be given to how much change the organization is capable of absorbing and for what duration, and to increasing the both the capability and capacity for change – these directly impact strategic agility.

    Organizations looking at 3-5-10 years of change really must invest in Change Management – and not only at the organizational OR Project level OR leadership OR training OR communication (so many approaches focus on only one element). Rather on a comprehensive top-to-bottom capability that can EXPAND the organization’s ability to initiate, complete and sustain change.

    Gail A. Severini, CMC
    CEO
    Symphini Change Management Inc.
    http://www.symphini.com

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  9. dogs health says:

    Eh, he still pitched 14 innings and won, 2-1.

  10. ketema says:

    hi
    can I get this document by pdf to download freely

  11. Jan says:

    Hi,

    I very much doubt that this approach will work in the long run.

    Consider your (Key) Performance Indicators.
    What factors increase performance/productivity?
    H

  12. Jan says:

    Hi,

    I very much doubt that this approach will work in the long run.

    Consider your (Key) Performance Indicators.
    What factors increase performance/productivity?
    How do you define productivity? Teamwork?

    Creativity and connecting people that share the same passion starts with individuals..which is a bottom-up process.

    Creativity may be less tangible than (measurable) productivity/performance, but more likely immune to changing market conditions…if managed by the very best and brightest.

    worth reading: “The Holstee Manifesto”

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