Transforming your business: Easily said, but how to?
The ongoing Covid-19 crisis has made it very clear that, to stay relevant in a changing world, companies constantly should reinvent themselves. But adapting to new circumstances and changing your business, what does that mean exactly in day-to-day business life?
Do you have to forget all about the past and jump to new ways of working, new markets and new products at breakneck speed? Do you have to stop everything your company was once very good at and known for? No. A certain amount of continuity and stability is fundamental to keep an enterprise running. The trick is to meet in the middle and keep some of the old and add some of the new with the right feel for balance. Keep what was working well, eliminate what’s no longer working and initiate innovation, in a parallel way, by providing enough room for both: increase your performance, while enabling transformation.
Work in parallel
Let’s have a closer look at this mechanism of working in parallel. A great deal about strong leadership in business comes down to mastering unpredictability. In particular, transforming means opening your front door and inviting uncertainty in: Maybe that fabulous new product you had in mind will create circuit-blowing ecstasy among your customers, but chances are it will drain your resources and revenues. A critical condition for successful innovation and experimentation is thus a stable core business which generates revenue and provides financial headroom. In general business theory, this is called ‘to change the business, you have to run the business’. How to find the right proportion between the two?
You need a thorough understanding of what works well and why in your organization – based on facts, not assumptions. But where to start? To enable business leaders and their workforce to quickly validate and take stock of value creation and value loss in their enterprise, ViCre developed The 4 Colors-business assessment tool. Applying color codes to your business activities, you get a clear-cut graphical view on how your business as usual and innovation should relate to each other in a balanced, sustainable and profitable way.
Aim for Green
In order to enable successful business transformation, to make progress – your business portfolio should generate added value and hence profits, based on business as usual. We label these activities in green: our way to codify everything what is working well and has a forecastable positive outcome. These activities are your lifeline. Therefore, at ViCre we say that ‘Leaders must always aim for green first’, by excelling in their present-day business and doing more of the same. And however counterintuitive it may seem: You must enjoy that repetition. Innovation and business transformation are not about doing everything differently. On the contrary. First, you must chase revenue on a platter, until you have earned enough to spend it on innovation.
Cut Out Red
Now let’s have a closer look at the activities you perform which are useless, which generate forecastable negative value and loss. Activities you need to STOP right now. These activities, you need to mark in red. Even in the best performing companies, there are always some activities and tasks that are no longer meaningful. As businesses are constant in motion, what was useful yesterday, might have become obsolete today.
Logically, your challenge is to keep your list of green activities as large as possible, and to reduce the red to the minimum. To increase your performance, this is your main challenge. But running a business of course is more complex than that. To survive, you need to continuously refresh and reconsider your business activities, and make sure that not all green activity turns red over time. To stay ahead of the competition, you will need to start new projects, embodied by the color blue. This includes new processes, products and improvements which later will become operational. Initially, these activities will be rather detached from business as usual, in lab-like, experimental environments. But gradually these improvements and innovations will become part of business reality, and turn from blue into green.
To turn the blue shades of innovation and experimentation into trustworthy green, you need to add yellow. No yellow, no future: Yellow is about empowering the right people in the right place.
In order to do this exercise, for example, you need some time. Time to think, time to reflect and analyse your business. We call this yellow time. Yellow time is what people need to be in control of their processes and to develop their talents. Self-validation stimulates us to take ownership of our professional roles and responsibilities. Yellow time never equals wasting time. These are the moments to be critical, enterpreneurial and creative. It is the time we take to be inspired, by thinking, reading, listening, learning – by opening our eyes, ears and brain to the world.
Check out our book: Receiving from the Ocean
Would you like to read more about sustainable business transformation? ‘Receiving From The Ocean’, our latest book on business transformation just came out. More information and a preview are available on https://vicre.eu/receiving-from-the-ocean/.