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No business survives over the long term without reinventing itself.
But knowing exactly when the right time to undergo deliberate, strategic business transformation—that is, when to change a company or organization’s core product, service offerings or business model—is where the difficulty often lies. That is often because business transformation typically requires overcoming big obstacles: Employees may feel threatened, customers can become confused, investors might not like unproven strategies.
Furthermore, the risk of it not succeeding is somewhat daunting: research contained in this article indicates that, even though more than four out of five executives at enterprise-level organizations recognize the need for transformation, only one third are confident that they can complete the job in less than 10 years.
Despite this, business transformation remains an integral component of an effective business growth strategy. So how can leaders know that it’s time to transform a company and make the case for change? That is the question that Mark Bertolini, David Duncan, and Andrew Waldeck tackle head on in this piece for Harvard Business Review, entitled “Knowing When to Reinvent.”
Five interrelated “fault lines” can indicate that the ground beneath a company is unstable—and provide executives who know how to detect them with early warning signs of industry upheaval, allowing them to prepare and adapt. By detecting fault lines at Aetna, CEO Mark Bertolini and the board of directors were able to make the choice to transform the company beyond a traditional health insurer – even as its profits were soaring. Similarly, Adobe, Nestle and other leading companies have preempted disruption by spotting fault lines early.
This piece by Bertolini, Duncan, and Waldeck details these fault lines, how they were applied successfully at Aetna and other companies, and how you can adapt them to get ahead of growth strategy and industry upheaval through strategic business transformation within your own organization.
The fault lines each focus on the fundamentals: whether the business is serving the right customers, using the right performance metrics, positioning itself properly in the industry, deploying the right business model, and hiring and keeping the most capable employees and partners.
The fault lines each focus on the fundamentals: whether the business is serving the right customers, using the right performance metrics, positioning itself properly in the industry, deploying the right business model, and hiring and keeping the most capable employees and partners.
The fault lines each focus on the fundamentals: whether the business is serving the right customers, using the right performance metrics, positioning itself properly in the industry, deploying the right business model, and hiring and keeping the most capable employees and partners.
Preemptive change is challenging under any circumstances, but it’s even more difficult when the journey will be long-term. Whether a complete business transformation is needed, or simply a shift in one or two areas, the fault line framework and related diagnostic questions can help executives frame the challenge, build confidence, and align stakeholders before it’s too late.
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Source: Innosight
Does Your Innovation Portfolio Match Your Priorities?