Most C-suite executives know that business transformation is essential to long-term growth and viability. Reimagining enterprise processes and operations is part of the business life cycle. But what keeps them up at night is the nagging realization that “transformation” itself is often a poorly defined buzzword—and most large-scale transformations fail.
Indeed, our experts comprehensively reviewed 140 enterprise transformation projects at public companies and found that 73 percent failed to simultaneously deliver top- and bottom-line growth. It’s a daunting reality that has kept transformation on the back-burner for many executives. But the disruption and uncertainty of the last year are compelling business leaders to consider transformation initiatives more carefully than ever before as they navigate today’s highly fluid business environment.
There’s a strong motivation to get it right: A carefully planned, well-executed transformation can raise EBITDA by as much as 30 percent, our research found. And while transformations often feel impossible to execute and require a substantial commitment of time and resources, the successful ones do tend to deliver results much more than continuous, episodic improvements. And, surprisingly, they are often the only way to get mature organizations back into growth mode.
The challenge, then, is to focus on what makes a successful transformation truly work. Start by getting past the buzzwords and clearly defining the transformation project in detail, using data and analytics to quantifiably measure results and track progress. Transformation is not a generic performance improvement project or a cadence of ongoing changes. True “business transformation” is an enterprise-wide, complex and lengthy effort that produces a lasting impact, changes a company’s trajectory, and delivers measurable growth and improved profitability.
As we outline in our in-depth “Transforming Transformation” report, the difference between success and failure in these large initiatives often came down to a number of proven, practical steps.