For many Boards, the pandemic has catalysed broad business change by accelerating digital transformation initiatives. The availability of cloud computing has democratised access to technology, and businesses of all shapes and sizes have seized on this opportunity to: increase revenue, margin, and profit; enter new markets and launch new products and services; delight, excite and get closer to their customers; and become more operationally efficient, increasing productivity, cutting waste, and reducing costs.
The pandemic brought into sharp focus what many businesses knew already; they were comfortable with business as usual and keeping the lights on, but were not equipped to respond to the challenges of implementing broad organisational change, quickly and without a roadmap. Despite this, organisations everywhere stepped up to the plate and adapted their business models to respond to the needs of their customers.
As we slowly return to normal, it may be tempting for Boards to slow down the pace of transformation, but now is not the time to take your foot off the gas. According to new research, 94 per cent of senior leaders made some adjustments to their business models during the pandemic, while 56 per cent said that they changed their business model significantly. Remarkably, these decision makers accelerated planned digital transformation initiatives by almost two and a half years. As a result, they are now more optimistic about the year ahead, with 89 per cent saying that they expect their revenues to grow on average by 21 per cent over the next year. This is too much of a prize to leave on the table in favour of returning to the old ways of working.
The business executives and line of business leaders I have spoken to recently now have a taste for change. They’ve seen that by undertaking experiments with minimal upfront investment of time and money, no long-lead analysis or analysis paralysis, with clear ways to measure return on investment, they are able to create a flywheel of innovation and change that delivers a reinvention dividend. Even if the experiments fail, the insights from those fast failures can drive tactics and what happens next.
Maintaining the momentum
Sustaining the levels of change seen through the pandemic over the long-term may not be possible for all businesses, but striving to embed agile working practices and collaborative decision-making processes into the DNA of your business will make it more achievable. Customers will certainly not be slowing down and they will continue to be dissatisfied and want something better. Disruptors and competitors will be quick to seize market share if they can serve your customers better than you can, and will happily step into that gap.
I’m still amazed that only 50 per cent of business leaders expect to continue transforming after the pandemic. These companies will face pressure on multiple fronts, not just from disruptors, but also the new breed of enterprise we’ve seen emerge from the pandemic, those that have a new spirit of reinvention, embrace the cloud, and have accelerated transformation by years.
In the work I do with organisations who are transforming through cloud adoption, there are five key principles that I see regularly in the most successful projects:
1. Executive sponsorship
An early challenge to the success of change in organisations is the lack of executive sponsorship. Having a visible leader who is engaging, seeks diverse perspectives to drive informed collaborative decision-making, and who is prepared to share the vision and mission for change at all levels of the organisation is key to unblocking change. An effective and engaged executive sponsor will create cross-functional, empowered, and informed teams instead of siloed ones.
2. Aligning the business and technology
Successful transformations need both the business and technology to be aligned. Historically, the technology function has taken a role focused on running the business rather than innovating for the business. The business, on the other hand, has got used to using the tools at its disposal to deliver outcomes (or not). Aligning the business and technology around a cloud adoption strategy will facilitate governed use of the cloud in new and innovative ways, meeting the needs of the technology function and the desires of the business.
3. Normalising change
Often, I meet customers who talk about things always being done a certain way. This devotion to systems and processes which have ‘always been this way’ is a barrier to change. Teams are often reticent to suggest change or transformation because of gatekeepers to these systems. Successful transformations require organisations to ask more frequently why something is done a particular way.
4. Creating a culture of reinvention and innovation
Organisations have demonstrated throughout the pandemic that they are very willing to try new things. The most successful adoption of cloud takes place in organisations where the entire business is engaged as a single culture of reinvention and innovation, where line of business leaders and other executive stakeholders create a pipeline of opportunities for teams to build, and where change becomes the new normal.
5. Developing and nurturing skills
Many customers tell me that they want to transform, but they lack the experience to be able to do it successfully. Developing and nurturing skills that encourage reinvention and innovation within your organisation is a key principle found in successful transformations. However, this doesn’t mean you should stop at just training and certifying your teams. It’s important to give your teams actual real-world, hands-on experience and empower them to question the status quo.
Using these principles, you can position your organisation to keep transformation front and centre of your business strategy.
The pandemic was the perfect reason to get started, it should not be the excuse to slow down.