Fueled by the rigorous pace of change and technological development, the future of business lies in navigating disruption—and if you’re not on the train, then you’re on the tracks. While many companies in industries such as media and financial services have already begun to see the direct effects of disruption, others have yet to experience its effects firsthand. For those who have managed to resist disruption up to this point, however, time is running out.
Within the next few years, many companies and professionals will fall victim to FTTS—Failed Transformation Traumatic Syndrome—and the consequences can be catastrophic for businesses. In the following, we lay out the causes, effects, and antidote for FTTS.
The causes of FTTS are rooted in the approach that a company takes to digital transformation. Leaders who do not understand the core goal of transformation choose to make outdated, irrelevant changes to their operations in the interest of not relinquishing “the old way” of doing things. Unfortunately, these firms do not seem to comprehend that the idea behind a successful transformation involves finding new ways to foster innovation, speed up processes, and deliver value to customers—all at a quicker pace than their competitors.
The results of a study conducted by McKinsey several years ago indicated that companies that established transparent goals for their transformation, had strong leadership throughout the process, and laid out a straightforward framework for the firm’s transformation process were much more likely to find success.
Companies are still struggling with the idea that transformation is about more than updating systems and investing in new technology. When these tactics—which allow firms to continue operating under traditional business models—inevitably fail, a company may become afflicted with FTTS, which manifests itself in a number of ways.
After investing both time and resources into a transformation effort to no effect, a company loses the opportunity to gain momentum. In the fast-paced digital world of business, a company that lacks momentum cannot compete in the market. From the top down, the impact of a failure to complete a digital transformation begins to affect every aspect of a business, and the effects of FTTS set in.
Initially, a company may have dissatisfied customers who know what a successful, digitally transformative business can offer them, but find it lacking in the firm with FTTS. Due to lower rates of customer satisfaction, the client base erodes, which leads to a decline in market share for the company. A reduction in revenue leads to less value in the rates of earnings per share, and eventually shareholder values also decrease. A company experiencing Failed Transformation Traumatic Syndrome begins to lose its top talent and finds that it is no longer able to invest in the kinds of employees who are needed to help the company make a comeback. In many cases, this results in a breakdown of the company, which may be the eventual fate of many of today’s less progressive incumbents. A study conducted by Cisco revealed that over the next few years, as many as 4 in 10 leaders in every industry will feel these effects of a failure to adapt to disruption.
Failed Transformation Traumatic Syndrome is exactly that: traumatic to your business. However, for those companies now struggling with its effects, as well as those that have yet to make a bid for transformation, there is an antidote.
The antidote to Failed Transformation Traumatic Syndrome occurs in the form of Five Transformation Imperatives. Together, these five ingredients for success can exponentially elevate your chances of executing a digital transformation.
The first ingredient is leadership. In order to make digital transformation happen, a company needs a strong leader with a commitment to its vision: a leader who can develop a plan to get things accomplished and keep the lines of communication open during the process. The second imperative, technology, refers to the need to equip employees with the necessary tools to make digital operations possible. Tools such as DocuSign eliminate the need for outdated processes that slow the velocity of business through comparative inefficiency.
The third of the Five Transformation Imperatives can best be labeled as “mindset.” Undertaking a digital transformation is a daunting task, but approaching the change from the mindset of adaptability and growth can help executive leadership to steer companies in the right direction. Digital transformation is about more than trying to stay afloat in a sea of change—it’s about creating a company that is agile enough to respond to the rising tide of digital development. This aspect of transformation requires trust in the abilities of executives, employees, and partners to help keep business moving forward when complications arise.
Trust is the fourth of the Five Transformation Imperatives. Without trust in the people and products that keep your company together, doubt can slow the process of transformation and make it difficult to ever attain. The slowness of this process contrasts with speed, which is the fifth imperative. Speed is the new currency of business, and it relates to both the way that professionals should approach the transformation to digital, as well as the goal of transformation itself. Companies that can create a better product than their competitors—and that can do it with speed—will be the new incumbents of the digital age.