Excerpt: Five Steps to a Better Business You

STEP ONE: COMPLETE A CURRENT STATE ASSESSMENT To effectively transform a business, you must first understand the current state of its operations. Current State Assessment includes developing an understanding of the current strategy, measuring baselines for key performance metrics, mapping various business processes, outlining the staff's existing skill sets, and documenting the capabilities of technology and information systems. Once understood, the business's current state is best communicated through two specific tools: the SIPOC (Supplier Input Process Output Customer) diagram, and the organizational alignment matrix. The operational aspects of business can be mapped using the SIPOC, while the organizational alignment matrix can holistically document the business landscape (Strategy, Management System, Processes, Technology, People and Organization).

STEP TWO: ESTABLISH AN ORGANIZATIONAL STRATEGY The organizational strategy establishes initial parameters governing the business's trans- formation. Assuming the entity being trans- formed is not an entire company, the strategy that applies most directly to the transformation is that of the affected business unit itself. It is important to note, however, that this micro level strategy should be supportive of the company's macro-level strategic direction. A simple approach to strategy for business trans- formation typically contains four components: ● a Mission Statement ● a Vision Statement ● ○ Core Values (typically those of the larger entity), and ● ○ GuidingPrinciples(for the transformation initiative itself) An important distinction must be made between Mission and Vision statements: while the Mission Statement defines the organization's purpose, the Vision Statement outlines its future aspirations, or what it hopes to be "post-transformation".

STEP THREE: DEVELOP AN ORGANIZATIONAL CHANGE MANAGEMENT PLAN The logical step after conducting the Current State Assessment and developing the organizational strategy may seem to be designing the future state. Proceeding to that step immediately, however, would place the success of transformation in doubt. Given that a business transformation is by nature a trans- formational change for the whole organization, it is critical to consider and plan for its impact on all aspects of the business and its employees. Organizational Change Management (OCM) is the "soft" side of business transformation. While numerous technical considerations help to define and implement the future state vision, the focus of OCM is to make employees aware of, and engaged in, the change effort. Executed properly, OCM can remove obstructions that prevent change from occurring, accelerate the transformation, and positively impact post-transformation sustainment. Three common components of OCM are stakeholder analyses, communication plans, and training plans. The communication component of OCM is critical to successful business transformation. If employees and stakeholders do not understand the purpose and vision for the change initiative, they may become resistant, stopping progress in its tracks. Effective communication plans often overcome these challenges by communicating the vision for change repeatedly and through all available channels.

STEP FOUR: DESIGN THE FUTURE STATE AND DEVELOP AN IMPLEMENTATION PLAN Once the need for Organizational Change Management has been accepted, business transformation can proceed to designing the Future State and developing an Implementation Plan. Once complete by the organization, this step will have defined the way forward and developed a plan for making the business vision a reality. Using the organizational strategy as a starting point, business leaders must outline technical aspects of proposed changes. Re-visit the Organizational Alignment model from Step One to test the completeness and alignment of the future design. Is the organizational strategy supported by adequate measurement and management systems? Do the processes and technology solutions achieve the desired results relative to the strategy? Are the organization's resources (employees or equipment) aligned to the new production system? If the answer to each of these questions is "yes" then management can proceed to develop an implementation plan that, in concert with the Organizational Change Management Plan, can be enacted to turn the aspirational vision into reality.

STEP FIVE: IMPLEMENT CHANGES AND SUSTAIN IMPROVEMENTS Although implementation and sustainment are the final components of business transformation, plenty of risks to success remain. Rushing implementation can place extreme pressure on existing operations and staff, resulting in the re-emergence of employees' resistance to change. Business leaders must be careful to ensure that the change initiative doesn't fall victim to "the way we've always done it".

The most direct method to ensuring a proper pace of implementation is to follow these steps: apply the Plan, Do, Check, Act (PDCA). The PDCA model is commonly used in lean management. It dictates that required changes are made one at a time and in proper sequence. This meticulous approach allows each change to be properly implemented, measured, and adjusted as needed before moving on to the next item on the implementation plan.

Implementing multiple changes to a system at once makes it difficult to ensure that each change is having a positive effect.

Another benefit of the PDCA model is that it can help drive a post-transformation, continuous improvement program—a critical component to ongoing sustainment.

Following these five steps in sequence, and with realistic timelines, will be a leap in the right direction for any business transformation initiative.

TIP TO THRIVE "True leadership is about making other people better as a result of your presence and making sure your impact endures in your absence." HARVARD BUSINESS SCHOOL; LEADERSHIP DEFINITION