Business leaders may find it increasingly risky and unnecessary to transform their businesses when things are going right. The costs of such efforts may also have an unfavourable impact on their decision-making. However, after BCG’s study encompassing hundreds of such transformation efforts between the years 2010 and 2014 took effect, it was realized that pre-emptive transformation is the best way to forge ahead. This kind of change gets embedded right from the level of the corporate strategy itself, so the efforts are more concerted towards effecting long-term change, rather than anything reactive. For most industries this is true, with the greatest per capita impact generating for material followed by consumer staples and discretionary. The one industry where the effect is the opposite is financial services. There also exist some secondary benefits of opting for this strategy such as reduction in the average costs, and a change in leadership to people more proactive. For effecting such transformation success, companies must have above-average spending on R&D, restructuring costs and capital expenditure, plus a long-term strategic orientation. A sense of urgency needs to be curated for this while constantly watching out for any early-warning signals. The talent recruitment team must work towards creating a leadership structure which has such transformative personnel. This will help control the narrative. The right approaches to change need to be selected away from traditional, project-management methods.

Source:https://www.bcg.com/publications/2018/preemptive-transformation-fix-it-before-it-breaks.aspx?linkId=55688388&redir=true

Uploaded Date:11 September 2018