Could somebody please remind me why we’re transforming our business?
Posted on: Feb 22, 2018 by Andy Wallace
It’s 30 years since I found myself, as a young volunteer, working for Dominica Agro Industries on the site of the old Rose’s Lime Juice factory in Roseau, Dominica. The small island states of the Eastern Caribbean were already thinking about disruption as their markets for citrus fruits and bananas were being lost to industrial scale producers in Florida and Central America.
Of course, we didn’t call it disruption in those days. I once asked our Finance Director how he had ended up so far from home. “Well,” he said. “I used to work for British Cellophane. Not much call for it these days, you know.”
Now many of the younger readers of this blog may never have crinkled a strip of cellophane between their fingers. The first industrial plant was established in Bezons, France in 1920, which will be of passing interest to some of my colleagues. And the ruins of the last plant are being bulldozed as I write to form the brown-field site for Hinkley Point C nuclear power station.
But next time you smooth a strip of Clingfilm over your sandwiches, pause for a moment and think how disruptive a strong, flexible, slightly adhesive food wrap must have been when the only available product on the market was a fragile, crinkly, cellulose-based film that was neither air tight nor water resistant.
And that’s how disruption works in business. Once a new product or service comes along that outperforms the established players, that can be scaled up to compete in global market places and costs a fraction to make, the old product doesn’t stand a chance. Who would buy a roll of cellophane today, even if you could? This is the inexorable logic forcing organisations of every shape and size to take a long look in the mirror and then embark on a major programme to transform themselves
In our white paper, The Digital Business Continuum, we argue that the time for huge ‘One Shot’ transformations may have had its day. A triumvirate of factors: changes in society; the impact of regulation; and the accelerating pace of technological innovation are increasing the pressure to change in every walk of life. We therefore suggest that organisations cannot simply look to the latest transformation programme to replace all of their business models and leap-frog their competitors.
Rather, they must prepare for a new era of continuous transformation, where the process of transforming is the new Business as Usual. Our white paper offers a framework for organisations to assess their readiness for this New Normal. Twitter famously started out as a utility for posting social updates to a group of friends or colleagues and its subsequent metamorphosis into a global phenomenon hardly needs discussion here. The point is that many of the most famous examples of disruption, especially in the digital world, illustrate the explosive growth of a product to occupy an ecological niche that nobody had previously dreamed of.
But how realistic is that for most organisations? Does it make sense for the local primary school to re-invent itself as a craft gin distillery? Should the local bookstore become a betting shop simply because the margins are better?
Returning to my opening theme, if a manufacturer of plastic film for food wrapping posed the question “how can we be more disruptive?” then surely the answer would be to find innovative ways to produce yet more durable products, more widely and more cheaply than the competition, and find new uses for them regardless of the amount of CO2 pumped into the air or plastic discharged into the sea. Whereas if the unifying purpose of that company was to produce a product that people would enjoy using, that was fully biodegradable and that would help to clean up the oceans then maybe it would be worth taking another look at cellophane!
Clearly, organisations must think about their true purpose as they seek to shift their culture to prepare for the age of the Digital Business Continuum. Change is essential, yes. Change is continuous, yes also. But empowerment works when we all know why we are here and what we are trying to achieve. So an organization that can inspire its stakeholders and its staff with a clear vision of its unifying purpose will succeed where others lose their way.