Triggers to transformation
Why do these big global companies feel driven to transform their businesses? The world has always been in a state of change but our business leaders told us that what is different now is the speed of change and, by that, they mean the acceleration rate that kicks in when technology reaches a tipping point that makes alternative products, services and delivery options widely accessible and usable. This rocket-powered version of change comes in the form of a disrupter that creates the fear that you may be obsolete in a very short period of time. Usually technology driven, these changes can pivot and surprise by what the end use of the technology may be, which fuels uncertainty and vigilance and drives the belief in transformation.
Talking to David Walsh at New Zealand Post, the spectre of disruption was a major driver of transformation in that business. Faced with posting letters fast becoming a practice consigned to history, the future wasn’t looking good. Recognising the opportunities offered by online shopping as technology made it not just possible but easy with one step order-pay-ship processing has resulted in a major pivot of the business, requiring enterprise-wide transformation.
The other trigger to transform is slower and more like a tsunami-powered change. It’s coming, it’s getting bigger, you can’t feel it yet and it’s only a prediction but you can’t afford to ignore it and it won’t change direction much as it heads towards you. These are the big global movements, climate change, population shifts, political and social realignments that cause people to adopt a point of view and influence what they believe and how they live their lives. And, although these global currents of change may oscillate and gain or lose momentum they relentlessly march toward us and the business they will impact.
One example is the change in demographics, resulting in one-person households being the fastest growing households – and don’t think millennials – golden oldies are the single group growing fastest. New Zealand isn’t immune to these global forces. We are one of the most urbanised societies, with nearly three quarters of us living in urban environments and the pavlova paradise of the quarter acre assigned to mythology when you consider that the average house size in Auckland in 2013 was 158 sqm and is now approaching 110 sqm. The reality is moving faster than our perceptions of New Zealand as a rural country with the backyard barbecue as the main source of entertainment. If a business doesn’t stay ahead of these cultural changes they quickly find themselves irrelevant in people’s lives so the need to transform is urgent and not optional.
Ikea is a great example of a business transforming to stay ahead of the tsunami. It recognised the small home urban living phenomenon way back in 2014 with its video of the single urban dweller in the future and the products developed to meet their needs.
But instead of seeing itself as a retailer focusing on urban living furniture needs, it’s transforming into a company that is relevant in the holistic lives of small household urban dwellers with its latest move into parchment recipes.
Amazon is another good example of a brand transforming – when did it stop being about books? Bezos has perfectly tuned antennae to social change and the big cultural movements sweeping the planet.
The other trigger to transform is slower and more like a tsunami-powered change. It’s coming, it’s getting bigger, you can’t feel it yet and it’s only a prediction but you can’t afford to ignore it and it won’t change direction much as it heads towards you.
Talking to New Zealand businesses undergoing major transformation programmes, one of the things that strikes you is the scale of the task and many people talk about having to pace the programme simply because people have only so much mental capacity. But while that may be a limiting factor, determination, passion and an impressively strategic focus was not in short supply and sharing their stories over the coming months will make the feint-hearted quake but will most definitely inspire future leaders of transformation.