Steinbeis experts show how to make a success of transformation
Changes happen – all the time, all around us, repeatedly. Time and again, established industries come under pressure. Often, this happens when they are enjoying a hefty rise in sales or are in the middle of an expansion program. Management Moves, Brand & Innovation – the Steinbeis Consulting Center – knows the challenges of transformation programs and helps companies make a success of them.
In his 1997 book, The Innovators Dilemma, American economist Clayton M. Christensen tried to ascertain why established sectors of industry are particularly prone to miss the signs of the times, or only recognize them (too) late. He concluded that emerging markets are too small, the investment risk too high, and their business structures too rigid. Then there’s the attitude – which has been attributed to “the snootiness of the ruling class.” These are all the ingredients of “transformation by disaster.”
One cause of this phenomenon is that many people struggle to imagine the world being any different – until it’s there. Those who portray or describe this world before it happens are ridiculed or dismissed as “utopists.” This is not so much because something is implausible. Rather, people lack imagination regarding how it should be achieved. Then – when transformation descends “by disaster” – there are only two options: Either you need to be in a position to make all those things possible that were previously impossible (due to a lack of imagination), or you sit it out and hope everything goes back to the way it was before. When this happens, it is possible and important to initiate “transformation by design” – but this has to done in good time.
Transformation by design – being prepared for the unforeseeable
Let’s be clear about one thing: Nobody has a crystal ball, and even the leading experts have a tendency to get things wrong. The only thing that is certain is that things will change. Similar to other phenomena that are likely to happen, it makes sense to establish an early warning system. One tool used by Management Moves, Brand & Innovation, the Steinbeis Consulting Center, is called the disruption ping. This indicates how fundamentally at risk a company is. In simple terms, for example, it can be said that human-centric and body-focused services are less affected by disruption than standardized or computer-based areas, although even those industries are witnessing change. What and how much works online? What business and payment models are emerging? What do customers really want?
Implementation phases are, more than anything, a time of vulnerability to chaos and the unforeseeable. The better and faster companies are capable of adjusting, the more resilient they become. The Steinbeis experts from Bönnigheim have already introduced this method at a variety of companies. They have also been able to help numerous companies out of almost hopeless situations during the current coronavirus pandemic.
Transformation describes a journey from one state to another. What’s crucial here is whether you act or react. But change also entails going on a journey in small steps. This results in many transformations, selectively adapting within established systems. It only becomes problematic when the focus or external parameters change. In other words, classic disruption occurs, making the established system, product, or technology obsolete. More often than not, established companies also underestimate the significance of ideas.
Accept failure – minimize risks
Often, impending changes are obvious. But they cannot be measured or predicted in numerical terms, especially when it comes to their ramifications or impact. When changes happen in an orderly manner, we perceive them as a normal, ongoing transformation. They are a reflection of the current situation, the task of R&D departments. It is different with changes, which – sooner or later – we really should implement. Digital transformation provides a multitude of examples of this. Many companies now use “digilog” methods. These are processes that still comprise analog elements, even though they could already be made completely digital – orders still being submitted by fax, for example, because that’s the way it’s always been done.
Competing systems constitute another source of uncertainty, especially when we’re still not sure which one will survive. One typical strategy that is adopted to avoid getting things wrong is to simply do nothing. The fact that this can fuel risk in another area is often overlooked, or not even registered.
To avoid this risk, the Steinbeis experts from Bönnigheim recommend establishing a clear culture of failure within the company, in ways that encourage people to try out new things and allow things to go wrong. “This provides you with an opportunity to decide how your company will go through the phase of transformation – by design or by disaster. Just make sure you’re always prepared!” says Steinbeis expert Professor Tilo Staudenrausch.
Prof. Tilo Staudenrausch (author)
Freelance project manager
Steinbeis Consulting Center Management Moves, Brand & Innovation (Bönnigheim)