Making sense of business transformation

Some ideas are too big and too broad for me to wrap my mind around. Human consciousness, how mortgages work, why reality television is so addictive…these questions may have to remain mysteries. Business transformation used to be one of these befuddling ideas.

Nearly a decade at Oxford Economics has helped clarify my focus, especially through the lens of digital transformation, which means more than computerizing processes and operations; it should start with business needs (like increasing efficiency, raising profits, becoming more sustainable)—with digital tools the default mode of improving things today.

But actual transformation is more nuanced than a simple definition. What qualifies a strategic effort as a transformation? Does it need to affect a certain number of employees, reach a cost threshold, or be visible to customers? Does it need a catchy project name (perhaps an acronym!), or is it a way of thinking and behaving?

What qualifies a strategic effort as a transformation?

It turns out that our findings align closely with those identified in the HBR research. And while our research dives deeper into the importance of risk assessment and management—which, as our work shows, correlates with more successful transformation execution—we agree on three common traits that all business leaders need to consider:

• Identify a concrete path to transformation, either through proven concepts that require space to grow, or via new ideas that need to take root.
• Introduce global change at the local level by engaging business unit leaders and creating a culture of experimentation—or, more simply, securing buy-in from the broader workforce
• Create integrated innovation units—because obviously, technology connects people, processes, and systems and enables transformation.

Our new report, The Estimation Game: What do business transformation really cost?, explores these ideas in some detail, with attention to the differences between transformation archetypes.