Covid-19 created a new sense of urgency that business leaders have never experienced in their careers. Organizations were forced to either go into survival mode or pivot if they wanted to deliver real and sustainable financial results. Some organizations truly understood the meaning of the term “transformation” and have thrived in the new environment.
After the initial shock of the global pandemic wore off, they saw there was no time to waste. Leading through change, they fundamentally altered their business models in a way that would deliver a brand new customer experience. This included creating a virtual or remote workforce by leveraging existing or new enterprise technology to open up communication, focusing on collaboration, creating digitized workflows, and establishing digital delivery channels or improved channels for the customer.
Building these capabilities and changing the culture quickly has been critical to their success. Ultimately, what made these organizations successful was their ability to create a sense of urgency, generate or enhance their agile culture and methodologies, and build technology or partner with businesses to pivot quickly and effectively.
According to McKinsey Research, organizations that transformed successfully in 2020 have these common attributes.
In order to see meaningful results from such a large initiative as a digital transformation, the goals should affect and reach far and wide across all teams. To reach such goals, the project requires buy-in from top to bottom. According to research, over 40% of a successful transformation’s value comes from growth initiatives, contrary to cutting costs, layoffs, or other slashing efforts.
Organizations that were successful in drastic transformations were more speedy and efficient in how they used capital and unlocking employee ideas. The key to this strategy, however, is to start slow with planning, and execute quickly before there is an opportunity to get derailed by more complex proposals.
Share your vision
Successful transformations have to begin with C-suite members convincing employees to drive the project initiative. In order for the project to be successful, employees need to have conviction that it’s the right move.
Sustaining a new way of working
So much of the digital transformation from the past year born out of necessity was a reaction. Organizations looking for lasting ROI need to look beyond these initial short-term solutions. What can leaders do to build momentum for the long term? CEOs offered a few suggestions:
Invest in people and culture from the start
A common CEO regret is not addressing the needed shifts in behavior and culture early in the transformation. One CEO reflected “I didn’t realize how deep a change we had to make in culture before we can deliver the quality of change we were looking for.” Another identified the point when individuals’ ownership of their role in the transformation really cemented: “You see this wave start to crest where people are saying, ‘I have the right to change my part of the business.’” While a transformation’s performance infrastructure may drive results, CEOs were uniform in their view that cultural change underpinned the sustainability of the impact.
Make engagement personal, so people in the company know why it is transforming
CEOs recognized that transformations build momentum and ultimately sustain their impact when lower-level employees feel empowered. One CEO accomplished this by ensuring everyone understood the commercial outcomes of the decisions they were making. Another focused on the personal impact: “We celebrated the little things and reminded people of the potential importance of the transformation to each of them personally.”
Flex your new execution discipline to help weather future challenges
While better business outcomes are the overt goals of a transformation, execution discipline is an invaluable by-product—especially because as the transformation progresses, the remaining value gets smaller and more difficult to extract. One CEO reflected that “market challenges usually get harder and harder.” Another found that “initiatives changed to become longer and more strategic.” This continuous-improvement engine changes the game for companies. One CEO felt that “there is no aspirational state, as you always reset to a new aspiration.” Our data suggest that three of four companies embrace the transformation methodology, continuing to use it years later to improve the business.
A new normal is developing, especially in the financial services industry.
CEOs have recognized that current business models will not lead to a higher level of performance in the new normal. They are seeing how agile cultures–organizations that adapt and adopt quickly–are the ones reaching higher levels of performance. What sets high-performing organizations apart is sustainable performance and the ability to scale.
To learn more about digital transformation in the financial services industry in the wake of Covid-19, download our full whitepaper here.
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