Why transformation is the wrong word - and what to do about it
Article and video below by Stuart Maister, Joint MD, Mutual Value
Pretty much every organisation now is undergoing ‘transformation’. Mostly this is a word to describe the rapid move to a much more digitally enabled business, whether that is about productivity, customer experience, the proposition on offer, efficiency or all of the above.
What a terrible word to use. It is a highly transactional concept, suggesting there is a beginning, a middle and an end to the ‘transformation’.
Vendors sell transformation as a product. Leaders declare transformation as a strategy – ‘we will go from here to here’. Those involved see it as a project.
Yet we all shout from the rooftops that this is a constantly changing world. The speed has increased. ‘Nothing will be the same again.’ We all need to be prepared for disruption, new challengers and be consistently innovating.
In this world ‘transformation’ is clearly the wrong approach. As you undergo this change from egg to chrysalis to butterfly a big old bird may come along and eat you up. And even if you transform in this way – what then?
This new paradigm calls for something else: permanent evolution. Most organisations understand that the sands are constantly shifting, and so talk of becoming agile. In this world a transformation is a set piece leviathan, whereas what is usually required is a few huge leaps but also constant and never ending incrementalism.
Let’s PEP things up
The speed of this need is such that we should now talk of Permanent Evolution at Pace – PEP – to describe what we need to address.
This is a change of mindset among everyone involved, and it has huge implications for the way organisations work with their suppliers ad partners, and how vendors can provide most value to their customers.
In the old paradigm buyers and sellers negotiate deals focused on project delivery. The deal is the thing, and success is judged by whether the products and services were delivered on time and on budget. Then the parties consider further transactions of this type.
In this new world that doesn’t benefit the customer nor the people they serve. The requirement should now be for deeper relationships between the parties focused on constant adaptability, meeting short term needs to respond quickly with long term strategies to ensure this is easily done. Change should be built into the relationship as a key component of what is being achieved together, with clear and defined ways for the parties to work together and bring specific value to achieve the optimum results.
The emphasis in this environment is on the relationship, not the deal, and it requires the establishment of real trust so that the team works together to the same goals. If any part of this team has a transactional mindset then this damages the trust that ensures consistent achievement.
A buyer that recognises this and builds it into its supplier strategy will, over time, find that it is working with partners in a collaborative, aligned way. This makes demands on the buyer as well as the seller, because it assumes both sides are loyal, trustworthy, honest and focused on value creation, not price. The classic RFP process mitigates against this approach – though some public procurements are seeking to build this philosophy into their framework contracts.
A vendor that demonstrates this approach will differentiate itself from other more transactional rivals. In doing so the firm will need to bring new ideas to its customers, work in an open and honest way and demonstrate at all points of contact integrity and a commitment to the best outcome for the customer. If the vendor is driven by hitting its quarterly numbers this will be understood by the buyer but gets in the way of establishing this dynamic, fluid relationship that will create much greater value for both parties.
This is not just about buyers and sellers
Exactly the same issues appear within large organisations, where ‘transformation’ is often carried out by the technical function and the rest of the firm are its ‘clients’ (or victims, depending on your perspective). In this scenario, transformation is often something that is perceived as having been done to the business, not by it.
Again, it is critical for those leading the central functions to adopt a Mutual Value approach, co-creating visions with those involved and ensuring everyone sees their role as aligned with the Permanent Evolution at Pace that drives real world business strategy. Otherwise trust breaks down and cynicism replaces it. The way this work is done is as critical as what is happening to the outcome achieved.
Mutual Value is a platform for change
Mutual Value is a concept and programme which is aligned with these new demands of an ever changing environment, in which trusted relationships should be the driving force of success. Permanent Evolution at Pace is how we see this requirement. It would be interesting to hear if this resonates with your own experience.