Buzzwords don't become so overnight. While at a later point they can get overused they are always rooted in something initially or interminably relevant.
So when you hear the term "transformation" now what do you think? Is it how your business adapts to digital, is it how it responds to competition? It's a vague word with a lot of power and meaning. It's 2018's version of synergy. Important, crucial and with full of definitions.
So let's actually take the time to define transformation more. Vik Sohoni, a senior partner at McKinsey and Company, offers this definition:
"Transformation at scale is essentially a transformation of your entire business. All businesses-from start-ups to very large companies-are struggling with how they transform themselves and break-through in today's competitive environment."
Sohoni gets to the core of what every organization is thinking. Disruptive technology, the sharing economy, the gig economy, the slow death of retail all weigh heavily on decision-makers. Every business knows it must transform in some way.
But a plan for growth is most important for a startup where the room for error is slim. One bad decision can signal the end for an early startup. Achieving success is not the hardest part of business, it's maintaining success. You may think that you're a new business so transformation, adaptation, maintaining relevance doesn't apply. And that's the trap many entrepreneurs set for themselves.
I'm sure you've heard someone say don't plan too far ahead because you shouldn't assume success. But my retort would be if you don't plan for what you do with success, you are planning for failure.
Why Even Your Brand New Startup will have to Transform
Sanjiv Yajnik, president of Capital One Financial Services, also advises several other organizations and is active in defining best practices for growth. He explains:
"In any given industry, a successful business trajectory generally looks like an S. A brand starts out doing multiple and varied types of work, with very little output and not a lot of impact (lower left of the S).
"Then, it reaches a point where the business takes off. In a very short amount of time, the company adds tremendous value, and the success and impact skyrocket (middle of the S).
"At some point, incremental improvements will start to have less and less impact (upper right of the S). The company now has two options-continue making small improvements and risk plateauing-or-reimagine the business into something completely new and innovative. That's when you 'make the jump.'"
Industries don't remain constant for long. Netflix once wanted to be bought by Blockbuster. Your great idea in 2008 is no longer a good idea in 2018, guaranteed.
And that pace is moving faster. Your startup idea in 2018 could already be obsolete in 2020. You need to have a plan.
Yajnik believes there are four keys to growing your startup, which he detailed earlier this year at SxSW. Master these and you'll build your startup in to a company that lasts:
It is not about being the fastest, but rather timing and positioning. Understanding when the market is ready for a particular product or service, preparing for it, and positioning the company to deliver that new innovation is essential.
Many companies today are trying to make products more "digital" or "automated." By layering on new technology to an existing product, brands miss the actual opportunity-- customer needs have become broader than the current product can provide. You must re-imagine your product or service entirely, from the customer back.
New technologies are redefining where industry boundaries (as well as internal organizational boundaries) are drawn. What brands are known for today is not necessarily what they'll be known for tomorrow. You're only limited by the lines you draw--so think broadly about what areas you could play in and how you operate.
Even if you get the first three steps right, it makes little difference unless you nail the execution. This can be the most difficult, since it's about reorganizing your entire team to unleash creativity and innovation at scale.
Many companies implement a bolt-on strategy--for instance, creating a digital group within the company. This can create incremental value, but doesn't enable the company to actually make the jump. You essentially need to create a new type of company with different tech infrastructure, organizational structure and skills.
How do you put these four tips in to immediate action? Start by designating more time for long-term planning each week. If you have a small group of employees, get them involved. Create a fun culture where employees can pitch growth ideas. But most importantly start thinking about your next step (or two steps) before you even launch. Your future self will thank you.