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How Operational Transformation Allows You To Grow in a Shrinking Economy

By: Kieran Chaudhry

When we think of today’s industry-leading organizations, what’s their one biggest similarity? They are continually innovating and developing new ways to do more with less. It’s a significant challenge many business leaders face. Whether stakeholders want to cut costs, increase production, or address customer satisfaction gaps, there may often be pressure from leadership to initiate quick fixes to reach a goal. Operational transformation is the solution that seeks to eliminate these quick fixes and produce more sustainable growth.

As the former President and CEO of Intel Corporation once said, “Success breeds complacency. Complacency breeds failure. Only the paranoid survive.” And the ticket to avoiding that complacency and driving further success is operational transformation — if implemented proactively.

What Is Operational Transformation?

Operational transformation, or operations transformation, is a change approach in which existing operating models are refined to better align with a company’s strategy for growth. Rather than improving isolated sectors of a business one at a time, operational transformation favors a cross-functional perspective that encourages growth company-wide. The result is an optimized organization where each sector can work together, creating a feedback loop that drives faster delivery without sacrificing the quality of the product for the end-user.

Proactivity Is Crucial

Many stakeholders may fail to see the immediate benefit of implementing an operational transformation strategy — after all, if something isn’t broken, don’t fix it, right? Not necessarily. The goal of a successful business should not be to stagnate; it should be to innovate. If one company neglects performance gaps to avoid upsetting the status quo, its competitor could be making improvements behind the scenes. This complacency can mean the difference between scaling up a business and making the difficult choice to scale down — or worse — halt operations entirely.

Operational transformation is a powerful approach to process improvement, but it takes time to implement. Giving a company time to make changes at a steady pace is essential, and failing to have the foresight to improve operations proactively often leads to leadership deploying quick fixes that ultimately do more harm than good.

The Danger of Quick Fixes

According to Gartner’s research, only 43% of surveyed leaders felt they achieved the savings they set out to in the first year of cost reduction. Leaders tasked with improving production while lowering costs may turn to quick fixes that cost more money and resources in the long run. From making blanket cuts across all departments to cutting corners to speed up production, these solutions can have drastic consequences, such as a loss in customer loyalty, an increase in employee turnover, and a decline in product quality. 

Rather than trying to meet demand with haphazard remedies, operational transformation helps a company achieve organizational synergy to enhance resiliency and scalability in a fluctuating market.

The Key to Growing When Everything Is Shrinking

Many change initiatives tend to have a blindspot in the areas between a company’s various divisions, and it’s in these intersections where the most value is to be found. Every company has multiple sectors, and defining ways to boost existing capabilities allows an organization to accomplish more with the same number of resources. When each unit works in tandem with one another, they can get more done with their current resources — that’s organizational synergy.

An example of organizational synergy may be when automation allows a production line to manufacture a product faster, thus enabling the accounting department to bill the client faster. This cycle continues down the line, creating a more sustainable, end-to-end solution that addresses the challenge of how to do more with less while raising profitability.

A Look Inside A Successful Operations Transformation Process

A successful operational transformation aligns a company’s growth objectives with its current capabilities by resolving the underlying causes of an issue rather than throwing resources at a surface problem and hoping the solution sticks. Transformation takes time, which is why proactivity is so vital. A company must have the space to identify and implement changes thoughtfully, or else it succumbs to the same pitfalls it was trying to avoid. 

When implemented effectively, an operations transformation will often follow a recognizable path to success:

Define The Strategy

Examine the industry and outline where an organization wants (or needs) to be within the next two, four, or eight years. From here, a roadmap will identify pain points and what changes need to take place to meet target goals.

Change Management

Change must, at its core, always be top-down. When leadership is fully bought-in and champions the change, the front-line staff will have an easier time seeing the value and becoming change advocates themselves. Employees at the center of the process will fully understand the urgency behind acting proactively, fostering an environment where change initiatives result in long-lasting behavioral transformations.

Define A Baseline

When employees can quantify and have a tangible way to measure how productive the improvements are, they’ll be more likely to uphold the new frameworks. Baselines also serve as a way to measure performance against competitors.

Process Analysis

During process analysis, a company can truly begin to define pain points and develop ways to bolster current operating models. By thoroughly documenting all organizational processes, an operational transformation specialist can help decide which management practices, technologies, or resources are needed to streamline operations.

Document Customers Wants/Needs

Specify what the company is doing and see if it aligns with what the customers actually want. For example, if a customer has never expressed a need for a specific feature in a product, can that feature be removed? In understanding what the end-users genuinely desire, a company may be able to eliminate redundancies, reduce production time, and create a faster speed-to-market that ultimately improves customer satisfaction and company productivity. 

Process Redesign

Once there is a clear roadmap of what to change, and employees are aware of and excited about that change, it’s time to start the process redesign phase. This phase involves removing unnecessary processes, outsourcing processes that can be done better, faster, and cheaper by 3rd party partners, and removing waste from the remaining processes. Waste removal in this aspect is performed using Lean methodology and looks for waste in areas such as:

  • Transportation
  • Inventory
  • Motion
  • Waiting
  • Overproduction
  • Overprocessing
  • Defects

Employ New Tech

Whether process automation is deployed through AI/machine learning to streamline manual processes or an organization switches to a new CRM to manage customer accounts better, adding new technology can be crucial to improving the quality of service.

Employee Training

If proper change management has been in place since the beginning, employees will have already been prepared for this phase of the change implementation and will be ready to learn any new processes or technologies.

Standardize & Sustain

Perhaps the most important step of any change initiative is sustaining the cultural, behavioral, and process changes. Top-level leadership can motivate employees to follow best practices by being a change champion and not relapsing to previous methods.

Stay Ahead of the Competition with SEI

Keeping up with ever-changing market conditions doesn’t have to be a shot in the dark. The experienced consultants at SEI will show you how operational transformation is the holistic strategy your company needs to optimize its existing capabilities to increase revenue, production times, and customer satisfaction without relying on narrowly-focused quick fixes. Our consultants will also work closely with decision-makers to ensure that infrastructure improvements can be sustained long after changes have been implemented.

Reach out to us today and discover how your business can achieve growth while everyone else is shrinking.

Kieran Chaudhry

Consultant

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