How These Enterprises Handle Complicated Business Transformations
Maintaining market share and industry dominance is a task that requires constant reinvention. Innovative organizational structures, product offerings or technology can help a business climb to the peak of an industry, but simply maintaining a magic formula in the long term can be a one-way ticket to irrelevance.
But introducing new technology or organizational structures to large companies can be extremely disruptive, and even threaten the success of the business as a whole. One way to mitigate any potential damage is to employ transformation teams and leaders, who can help forecast and manage the disruption incurred by necessary adjustments to corporate organization, tech infrastructure or business models.
We found three enterprises that have recently undergone large-scale transformations: an energy giant that was recently spun off from an even bigger manufacturing giant, an accounting and professional services firm reorienting decentralized customer-facing teams around its business enablement core and an apparel company venturing into direct-to-consumer sales for the first time. While there is little overlap between the transformations themselves, the skills required to orchestrate such changes tend to be the same.
Dr. Nandani Lynton, Global Head of Organizational Growth at Siemens Energy
In July 2020, shareholders at industrial giant Siemens voted to spin off the company’s energy businesses as an independent entity called Siemens Energy. That meant separating disparate pieces of Siemens’ organization and then stitching them back together according to a structure that would suit the new business’s goals.
“Our transformation is almost a combination of post-merger integration and a transformation of business and culture,” she said in an interview with Built In. “The end goal is a more adaptive, agile company that supports our customers in transitioning to a more sustainable world.”
“I believe in getting people to own their part of the transformation.”
Lead From The Middle
Multiple business lines, geographic locations and the sheer size of Siemens itself all posed challenges for the creation of Siemens Energy. During the company’s pilot phase, Lynton said she noticed that while the new company’s leadership was on board with the changes, their advocacy was not filtering down to the rank-and-file.
“We developed ways of giving the skills and platforms for driving the transformation to middle managers,” Lynton said. “That is how you really get to scale.”
Often maligned as a “clay layer” between individual contributors and leadership, middle managers are exposed to more segments of a business than anyone else in the corporate hierarchy. Lynton used the power of the position to her advantage, empowering middle managers to implement and promote the changes within their patch of the organization.
“I believe in getting people to own their part of the transformation,” she said, “and one also needs to bake reinforcement into new systems.” Reinforcement comes from consistency: creating a shared language for behaviors and using it.
“For example, one of our Siemens Energy behaviors is ‘open and inclusive.’ So when there are decisions to be made, it should be normal that someone says ‘How do we ensure we are being open and inclusive with this?’”
“In order to make the vision real, every decision needs to be linked to purpose, vision or key behavior. Consistency is key.”
Dan Doherty, National Managing Partner for Digital Business Transformation at KPMG
Accounting services giant KPMG has been around in some form or another for more than 200 years, and has obviously adapted to its share of change in that time. Recently, the company launched a “digital business transformation” in an effort to build a distributed IT model for market-facing businesses like its advisory, audit and tax segments. Meanwhile, the company sought to position its business enablement teams at the center of its organization.
“We needed the advantages of both centralized and decentralized technology teams brought together under a common strategy, governance model and operating principles,” National Managing Partner for Digital Business Transformation Dan Doherty said. “We have strengthened KPMG’s ability to capture market opportunities, drive cross-functional solutions and leverage global and firmwide investments that enhance the experiences for both our clients and our people.”
As part of that effort, Doherty said KPMG has strengthened its technology foundation, leveraged data as an asset at a large scale, moved to cloud-based solutions and improved its security measures.
“A successful transformation leader must have the skill to bring all these elements together in the right way and at the right time.”
Break It Down
KPMG’s digital business transformation strategy is part of a long-term project for the firm, in which it assesses and adopts new technologies on behalf of its clients around the world. Doherty said the company is committed to adopting what he calls “tried-and-true” technologies and incorporating them into their existing workflows and product offerings.
For fellow leaders of businesses in flux, Doherty recommended focusing on culture, people, processes and technology elements within an overall transformation strategy. The idea is to focus on each individually, then bring them together.
“A successful transformation leader must have the skill to bring all these elements together in the right way and at the right time to enable seamless, transformative and purpose-driven change,” he said.
To that end, Doherty said he’s finding that “user-centricity is proving to be essential for promoting employee satisfaction, winning business and growing our business.” On the technology front, the strategic adoption of new technology for both employees and customer-facing products is the main facilitator for corporate transformation.
Lee Solomon, VP of Transformation Management at VF Corporation
You might not have heard of the apparel and footwear company VF Corporation, but you’ve definitely heard of their brands: The North Face, Vans, Timberland and Dickies are all part of their portfolio. But as VP of Transformation Management Lee Solomon pointed out to Built In, the success of those brands has historically been built upon a wholesale retail model that has become increasingly turbulent in recent years, not least because of the economic shutdowns enforced to help stop the spread of COVID-19.
In response, VF decided to enter the direct-to-consumer e-commerce market in a way that it never had before. Solomon described the change as an opportunity to “achieve the pinnacle expression of our brands and better know our consumers directly.”
“To be clear, this isn’t just about new and upgraded technology platforms,” he added. “To compete in the consumer-driven market of the future, we need to rethink our consumer value proposition, the operating model we design and build to deliver that value and the organizational platforms, skills, capabilities and technologies that must be put in place.”
“Some things will take time to change, especially if you’re transforming a large or complex business.”
Pair Patience With Impatience
As it navigates multiple cultures, technologies and management styles across its brands, VF Corporation’s transformation teams are developing what Solomon calls their most important skill: “the ability to be patient and impatient at the same time.”
“Some things will take time to change, especially if you’re transforming a large or complex business,” he explained. “But that doesn’t mean you shouldn’t continue to push for small wins every day and have high expectations about what is possible.”
To this end, Solomon highlights the transformation’s benefits for members at all levels of an organization, from simplified processes for store associates to unified tech stacks for engineers. At the same time, the team tracks a number of “non-financial lagging measures” to help the team ensure the transformation is working at all levels.
“We haven’t used measures like this across our brands before, and it’s requiring our teams to think differently about their priorities and draw a straight line between their daily activities and the different outcomes we’re trying to create,” Solomon said.