In the ever-evolving landscape of modern business, transformational change has become a buzzword synonymous with growth, innovation, and most recently, post-pandemic survival.
What is Transformational Change?
Transformational change refers to a fundamental shift in the way an organisation operates. Unlike incremental change, which involves making small adjustments, transformational change is about rethinking and radically altering business models, strategies, processes, and even organisational culture. It’s not just about doing things better; it’s about doing things differently.
This type of change is often driven by technological advancements, market disruptions, evolving customer needs, or internal challenges. It requires a vision for a new future and a willingness to venture into the unknown. As exciting as that sounds, transformational change comes with its own set of challenges, especially when considering the scale of the organisation.
Here we look at some of the hurdles to overcome depending on how big a company is.
Small Businesses
Small businesses often operate with limited resources, which makes transformational change both a vital opportunity and a daunting challenge:
- Resource constraints
Small businesses typically have tight budgets and limited human resources. Implementing significant changes requires investments in new technologies, training, and possibly hiring new talent. Finding the funds to support these changes can be a major hurdle. - Risk aversion
With limited margins for error, small businesses may be more risk averse. The fear of failure can hinder bold decision-making, leading to hesitation in adopting necessary changes. - Adaptability
On the positive side, small businesses can be more agile than larger competitors. However, the ability to adapt quickly must be balanced with strategic planning to ensure changes are sustainable and align with long-term business goals. - Resistance to change
Some small business owners can be resistant to changing the business due to personal attachment and potentially a lack of objective thinking: this can often be controversial and a challenge to confront. Business owners need to recognise they are not infallible and may need to seek expert advice and different skillsets to make business transformation a success.
Medium-sized businesses
Medium-sized businesses sit at a unique crossroads, where they often have more resources than small businesses but not quite the extensive capabilities of large corporations.
- Scalability issues
As the business grows, you need systems and processes that can scale with your business and may be a struggle to achieve without the infrastructure that larger companies have. - Employee buy-In
With a larger workforce, achieving consensus and buy-in from employees can be challenging. Effective communication and leadership are essential to ensure that everyone understands and supports transformational goals. - Balancing innovation and stability
Businesses must innovate to grow, but they also need to maintain stability. Striking this balance requires careful planning and execution to avoid disruptions to ongoing operations.
Large Businesses
Large businesses have the advantage of abundant resources but face complexity and inertia that can make transformational change particularly challenging.
- Organisational inertia
With established processes and a large workforce, changing direction can be like steering an oil tanker. Resistance to change can be strong, and overcoming this inertia requires a clear vision and strong leadership. - Complexity in execution
The larger the organisation, the more complex the execution of transformational change becomes. Co-ordinating efforts across departments, regions, and functions requires meticulous planning and robust project management. - Maintaining consistency
Ensuring change is consistently implemented across all levels and locations of the organisation is a significant challenge. This requires standardised processes, comprehensive training programs, and continuous monitoring.
Regardless of how big your company is, here are some core attributes you and your company must have to make transformational change a success:
- Empathy and support
- Regardless of the size of the business, empathy and support play crucial roles in navigating transformational change. Understanding the fears, concerns, and aspirations of all stakeholders—from employees to customers—can foster a supportive environment where change is not only accepted but embraced.
- Strategy
As simple as this may sound, most transformation initiatives that have issues have no clear strategy underpinning them – this will ultimately lead to low buy-in from the business. Leaders need to invest significant time up front to clearly design a strategy and define the ‘why’ so the ‘what’ has a chance to succeed. You need to set out the needs the business has and what the transformation needs to deliver. The answers won’t all be there, but critically, by defining the vision (or the “why”), you will create a platform for all further decision making. And once defined, the leadership team needs to fully endorse the strategy through ongoing communication and behaviour, getting buy-in from their teams. This will create firm-wide alignment. - Capability and capacity
We often see change initiatives failing because of limited capability and capacity, regardless of an organisation’s size. Organisations don’t always recruit for the future; they tend to recruit for the present. A ‘business as usual’ mindset, often lacks broader understanding and foresight to achieve future recruiting requirements and this can lead to challenges down the line. Even in the short term, bringing in expertise to shape and structure transformation to ensure there is an efficient delivery capability that can manage, and drive success, may be required. Leverage your SMEs (Subject Matter Experts) for what they can bring to the table and don’t assume they can deliver it. - Transparent communication
Keeping lines of communication open and transparent helps alleviate fears and build trust. Clearly articulating the vision, benefits, and steps involved in the change process is essential. - Employee involvement
Involving employees at all levels in the change process can increase buy-in and reduce resistance. Empowering them with the necessary tools, training, and support they need can make the transition smoother. - Leadership commitment
Strong, committed leadership that is visibly involved in the change process can inspire confidence and drive momentum. Leaders should model the behaviours and attitudes they wish to see in their teams. - Patience and flexibility
Transformational change is a journey, not a sprint. Being patient and flexible, and willing to adjust plans as needed, can help manage the complexities and unexpected challenges that arise.
Transformational change is both a challenge and an opportunity for businesses of all sizes. While specific hurdles may differ, the underlying principles of empathy, clear communication, and strong leadership remain consistent. By understanding and addressing the unique challenges faced at each stage of the business lifecycle, businesses can navigate the tumultuous waters of change and emerge stronger, more innovative, and better equipped for the future.
At Siena Consulting, we work with our clients to help evolve their businesses and achieve transformation success.
If you’d like to continue the conversation with our digital transformation expert Rob Saunders, contact him here: