EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.
Recent Searches
Uncover the secret recipe behind the saga of global businesses successfully conquering digital transformation.
- AI is a powerful enabler for AM&M companies to achieve greater profitability, deliver higher customer value and enhance efficiency.
- The potential of AI in the Nordics clashes with siloed strategies and heightened privacy concerns, demanding responsible, clear-cut AI roadmaps.
- A proper AI journey involves tackling privacy, data governance and social responsibility, while fostering talent for sustained growth.
Transforming a business is a complex dance played out on the slippery slope of constant change. It's about adapting, innovating and pushing operational boundaries. The new age industry leaders, often seen as the flagbearers of innovation and resilience, are waltzing to this challenging tune with grace. They are not merely trying to keep their footing; they are leading the charge, mastering the rhythm of innovation and reshaping themselves to stay competitive.
So, what's their secret recipe? Is it a meticulous selection of allies, a marriage of local grounding with a global outlook, or something more? Let's dive in and find out.
Challenges of business transformation
Navigating the path to business transformation presents a unique set of challenges. The journey is often complicated by structural hurdles, cultural pitfalls, a struggle to maintain core business values and the quest for sustainable results. Let's delve deeper into these critical areas:
- Directionless drift: Companies often grapple with the lack of a clear and unified vision during transformation. Some companies have a clear vision but struggle to put that into action due to poor governance, coping mechanism and risk management. The absence of a shared roadmap with defined milestones can hinder progress and impede accountability among teams. The lack of an able project manager and a hesitant decision-making process also stand as barriers to effective transformation.
- Cultural pitfalls: Identifying cultural issues can be tricky and addressing them takes longer. While the shift from siloed to cross-organizational collaboration stands as an example, wider cultural aspects involve overcoming resistance to change, promoting inclusivity and fostering a culture that encourages mistakes and risk taking.
- Moral dilemma: Companies aiming for sustainability often face moral dilemmas. Even though they value their employees, difficult decisions like layoffs are sometimes necessary for the business's greater good. Handling these moral dilemmas while maintaining their core principles is a tough task for businesses, highlighting the importance of thoughtful decisions in the change process.
- Sustainable efficiency: Global enterprises are striving to balance sustainability with cost cutting. While efficiency and cost reduction are essential in business transformations, it's critical that these measures do not harm long-term business growth and sustainability.
- Costly precision: One of the primary obstacles for enterprises is maintaining high-quality output during the optimization of operations. It’s essential to identify inefficiencies and redundancies without sacrificing the standard of products or services. This delicate balance can be hard to strike, especially when trying to reduce expenses without hurting the business's core capabilities.
While adopting advanced systems like artificial intelligence (AI), cloud services and data analytics has the potential to transform business processes, it requires a thoughtful approach. The initial investment and training costs, the need to align new tech with existing systems and the risk of potential disruptions make this a complex endeavor.
1
Chapter 1
How are industry leaders mastering innovation @ scale?
The journey from comfort zones to transformative horizons
When undergoing significant transformation, companies face the challenge of moving beyond the comfort zone and the limitations of current business models. To truly innovate, it's not enough to make incremental changes; transformative thinking requires a "future-back" approach. Leaders should envision the business landscape of five to seven years ahead and create a roadmap from that future to the present, aligning decisions with long-term goals rather than short-term fixes.
Another obstacle is ensuring transformation happens swiftly and can be scaled effectively. Lengthy programs are costly and late-stage redesigns can be expensive. To mitigate this, organizations should validate designs for scalability early on by involving a broad range of stakeholders in the testing process. Rapid prototyping and piloting help gather immediate feedback, enabling adjustments before wide-scale implementation.
A select group of diverse stakeholders should also review pilot projects, offering insights on potential scaling challenges. This inclusive strategy aids in fine-tuning the transformation for broader application.
In essence, achieving innovation at scale is about fostering an environment conducive to rapid ideation and practical implementation, allowing organizations to integrate fresh, ambitious ideas into their core strategies with agility and sustainability.
2
Humans @ center for business transformation
The essential role of people in shaping change
Human-centric change management is a specific approach to handling changes within a business, which places a strong emphasis on the human element. Rather than just focusing on processes, timelines or objectives, it puts individuals and their needs at the center of any changes. It is about creating a work culture that harmonizes with business objectives. By assigning roles for end-to-end accountability and establishing clear decision-making rights, firms can foster a more fluid, responsive organization that is better prepared for a changing environment.
Successful change management involves a roadmap that guides employees through the transition. Organizations need to offer the right training, tools and support for employees to navigate the new landscape. Also, businesses must encourage open and constructive dialogue where employees’ opinions are heard and addressed, fostering a sense of ownership and commitment to the new direction.
Human centricity is the foundation of successful business transformations, yet its importance is often overlooked. The secret to building a resilient, future-proof organization lies in fostering a culture that embraces change, values inclusivity and encourages risk-taking.
Eva Tuominen
Partner, Consulting, People Consulting, EY Finland
A recent study by EY teams, in collaboration with the University of Oxford, revealed the crucial role of a human-centric approach in the success of a company's transformation efforts. Specifically, prioritizing human factors can increase the likelihood of success by over 70%. The research surveyed 900 executives across 23 countries, indicating that companies putting humans at the core of their transformation are 2.6 times more likely to succeed.
In the process of transformation, humans are more than just individual contributors; they form the core, the essential drivers propelling and shaping the entire transformation. This means considering aspects like emotional support, strong leadership, clear vision, role clarity and open culture — some of the key drivers of successful transformation.
We have often seen in Finland that the importance of human centricity has been underinvested or even overlooked in different types of transformations. However, this is slowly changing in the wake of more human-centric leader generations entering the business and after countless failed transformations where the number one lessons learned was that we should have put more focus on humanitarian values and change management.
3
Technology @ speed and the race for digital mastery
The blueprint for seamless Tech integration and innovation
Embracing technological transformation is crucial for businesses aiming to stay competitive in today's digital era.
Pinpointing technological opportunities: The first step in technological transformation involves identifying areas within businesses that could yield significant benefits through technology. Whether it's customer service, data analysis, internal operations, or automated tasks, businesses need to scrutinize their functions to understand where technology could potentially revolutionize outcomes and efficiencies.
- Seamless tech migration: Switching to new technologies should involve skillful transition management. Poorly executed tech migrations can cause disruptions and inefficiencies instead of improvement. Global businesses must ensure that thorough planning, risk anticipation and employee training accompany the change. Continued support throughout the adaptation phase is also essential to ensure a smooth transition.
- Choosing agile over waterfall: For businesses, adopting agile over the traditional waterfall approach can speed up tech transformations. Agile's test-and-learn model helps validate benefits faster, saves costs and reduces unexpected outcomes. It is a modern method for a competitive edge in the digital landscape. With waterfall, businesses risk discovering late in development that the outcome isn't as expected, potentially wasting significant time and resources. Thus, agile's flexibility and real-time feedback offer a more effective approach in today's swiftly evolving digital environment.
- Leveraging efficiency: Technological efficiency holds the power to redefine processes and results. Organizations should capitalize on technology to streamline their operations. Use of advanced analytical tools, cloud computing and AI could lead to ground-breaking improvements in productivity and cost management.
- Data and generative AI: Generative AI (GenAI) is quickly becoming a key area for investment, with businesses exploring its potential for incremental improvements rather than complete overhauls. Companies are evaluating GenAI applications across various functions, from enhancing customer interactions to streamlining internal training processes. Despite the excitement around GenAI, the primary concern for companies lies in strengthening data governance. This highlights the importance of ethical management and protection of sensitive information, especially as AI regulations continue to develop.
The journey to successful digital transformation is both challenging and thrilling. It's not just about identifying the right technologies, but also orchestrating a strategic plan around these innovations to ensure seamless tech migrations, steering change and increased efficiencies.
Orchestrating a successful transformation
Navigating the transformation journey for businesses requires a well-orchestrated and multifaceted approach. It's not just about implementing new technologies or streamlining processes, but also embedding a mindset of continuous innovation and resilience within the organization.
Business transformation is a complex process, filled with both opportunities and challenges. However, by fostering a culture of constant innovation, reaching out globally for talent and insights and smartly selecting partners who understand Finland's unique cultural and business landscape, businesses can build a promising future. A future that successfully navigates the ebbs and flows of their transformation journey, firmly placing them at the forefront of the digital age.
Summary
As we navigate the wave of business transformation, there’s much to learn from the success of global firms. In overcoming structural obstacles, fostering a conducive culture, utilizing technology efficiently and optimizing costs, they have mapped their global success. This nuanced approach forms a blueprint for organizations worldwide, while racing against time and remaining competitive in this digital era.