Operational transformation is an undertaking that spans across different facets of a business. There are the general goals of automation, cost reduction, and better service. Businesses have no problem in identifying the improvements they desire. However, the level of success hinges on how well they define the improvements.
The approach to deliver a 20% efficiency gain is very different from one that aims for a 50% improvement and a 30% upsell. To avoid leaving success up to chance, businesses need to do a more thorough job in defining the success yardstick. They need to do the following five things.
- Understand the status quo
Businesses generally have a fairly good idea on where improvements are needed. It is fairly straightforward but it is inadequate to base a significant investment on generic evidence of issues. Gather feedback from the customers, employees, vendors, and others who are involved in the target areas for transformation. The discussions will reveal unknown idiosyncrasies. Collect data on specific challenges such as customer effort spent on a process, for instance, to establish a baseline for reference. The knowledge also offers insight for prioritization of the transformation opportunities.
- Identify unique differentiators
This requires some soul-searching to identify what differentiates the business from the competition. The unique differentiators are competitive advantages that the business wants to leverage. Ask the customers what they like. Consult the business partners why they value the relationships. Take note of the differentiators and explore ways to enhance them. For instance, when business partners place a high value on the secured website access to transactions, find out which aspects they like and what else they like to see. Again, quantify the effects if possible. This helps to focus on things that would be well received.
- Innovate with focus
A transformation initiative should be more than improving the status quo. It is an opportune time to introduce new ways to run the business and push the boundaries for innovative concepts. To do this successfully, review the findings from the above and seek new ways to generate new strategic advantages. The key is to be focused so that the project team won’t be chasing after too many ideas. It is impossible to do many things well all at once.
- Validate new ideas
Testing and verifying the usability of the new solution are crucial before a broad rollout. Invite key users or customers to test drive the prototype. Gather specifics on what works and what doesn’t. To prepare for a proper evaluation, establish an assessment grid for the review. Refer to the baseline performance that you have gathered and review the level of potential improvements. This is necessary for the purposes of validation and ranking of areas that require further refinement. Without it, it would be difficult to determine where to focus the energy.
- Manage risks
This covers the risks associated with the initiative and potential impacts. For the highly probable risks, quantify the effects and determine how well prepared the business needs to be to overcome them. Often, changes introduced by a transformation initiative are irreversible. Systems are replaced. Jobs roles are modified. The organization structure might be changed also. It would be difficult to reverse course. Conduct a proper risk assessment and develop a detailed plan to mitigate the impacts.Specificity spells insight for action. Click To Tweet
Execution of a transformation initiative requires careful planning. Specificity spells insight for action. It is better to be prepared so that there is adequate information for making informed and expedient decisions along the way.