Large-scale business transformations are our daily business, with continuous change as the new normal, while digitalization is constantly challenging the survival of today’s business models.

Technology is evolving, customer expectations are shifting, and businesses must keep pace or risk becoming obsolete. But not all change is the same. Some transformations are structured and predictable, while others are complex, requiring companies to navigate uncertainty with agility and innovation.

Half of local Austrian CEOs (45%) believe that their company’s current strategy will no longer be profitable within the next ten years. The pressure to transform is mounting — and many businesses have already taken action:

– 82% have developed innovative products or services.

– 66% have introduced new pricing models.

– 63% have targeted new customer segments.

But will these actions be enough to truly reinvent the business model? For many CEOs, the honest answer is probably „no.“[1]

Successful business transformation isn’t just about offering more products and services, adopting new technologies or restructuring teams. It’s about redefining how an organization operates, competes and delivers value. Let’s break down what makes transformation complex and explore real-world strategies for success.

What Makes Business Transformation Complex?

Business transformation involves fundamental shifts in strategy, culture, processes and technology. While some changes require nothing more than a clear roadmap (complicated transformations), others are unpredictable and require continuous adaption (complex transformations).

– Complicated Transformations have defined steps, such as relocating corporate offices or upgrading software systems. Success depends on careful planning, execution and expertise.

– Complex Transformations require agility, as they involve shifting environments and unpredictable outcomes, such as adapting to a global crisis or pivoting business models.

 

Real-World Example: Best Buy’s Rapid Covid-19 Pivot

When the Covid-19 pandemic hit, Best Buy had to act quickly. With in-store shopping halted, they faced an uncertain future. Instead of waiting, they transformed overnight, embracing three key principles:

1. Curbside Pickup Within 24 Hours: Best Buy shifted to curbside service, adapting in real time to consumer demand and safety needs.

2. Empowered Store Managers: Instead of a top-down approach, local managers had the autonomy to customize solutions, ensuring flexibility across locations.

3. Appointment-Only Shopping: To safely manage in-store traffic, they introduced scheduled visits, seamlessly integrating new tech into operations.

This agile, situation-oriented transformation led to increased customer trust, retained revenue and a competitive edge in retail.

 

Change vs Transformation

Businesses often confuse incremental change with true transformation. Here’s the difference:

– Change tweaks existing structures, such as updating software or revising policies.

– Transformation is a fundamental shift; think of Netflix evolving from DVD rentals to a global streaming powerhouse.

There are four different types of Business Transformation:

1. Digital Transformation: Integrating technology into all aspects of business (e.g. General Electric’s IoT-driven predictive maintenance).

2. Cultural Transformation: Shaping the mindset and values of the company (e.g. Mircosoft’s shift to a growth culture under Satya Nadella).

3. Process Transformation: Rethinking operations for efficiency (e.g. Toyota’s lean manufacturing approach).

4. Strategic Transformation: Redefining business models (e.g. Starbucks balancing global brand consistency with local market adaptions).

When Does a Business Need Transformation?

Not every company needs a massive transformation. Some challenges can be tackled with small changes. But when an organization faces market disruption, sustainability challenges, or existential threats, transformation isn’t optional or nice-to-have, it’s essential for survival.

The Cynefin Framework, created by Dave Snowden, is a decision-making model that categorizes problems into domains: Complicated, Complex & Chaotic. It helps navigate uncertainty by identifying the nature of a problem and applying the appropriate response. Using the Cynefin framework, companies can identify when transformation is necessary:

– Complicated: Experts can design a structured solution (e.g. office relocations, system upgrades).

– Complex: Requires real-time testing, learning and adapting (e.g. pandemic-driven business shifts).

– Chaotic: Immediate action is required to stabilize operations before transformation can occur.

 

Why Do Transformations Fail?

Many transformations start with an ambitious goal but fail due to common pitfalls:

– No Urgency: Without a compelling reason for change, initiatives lose momentum.

– Weak Leadership: Lack of alignment at the top leads to resistance and confusion.

– Unclear Vision: Employees need a clear goal – if they can’t explain the transformation’s purpose in less than a minute, it’s not clear enough.

– Resistance to Change: Employees resist if they don’t see the value, or if leadership fails to remove obstacles.

 

Best Practices for Complex Business Transformation

1. Adopt an Emergent Strategy: Amazon’s shift to cloud services (AWS) started with small experiments that evolved through rapid feedback and market insights.

2. Empower Adaptive Leadership: IBM’s reinvention in the 1990s, led by Lou Gerstner, focused on collaboration and customer-driven innovation.

3. Balance Standardization with Localization: Starbucks maintained its brand while adapting to local markets, ensuring relevance and global consistency.

So, what does it take to succeed in uncertain business landscapes? 

Complex business transformation won’t succeed by following a set blueprint. Instead, learning, adapting and innovating are the keys to thriving in uncertain environments. Companies that embrace agility, empower leaders, and foster a culture of continuous learning will not only survive disruption, they will define the future of their industries. Before launching a transformation initiative, ask yourself: Are small changes enough, or is it time for a bold, strategic shift?

 

How can we support you with complex business transformation?

Our Business Transformation Office enables organizations to drive strategic project portfolio prioritization and agile resource allocation for short-term needs. We ensure seamless alignment with business objectives while enhancing flexibility in project execution. By embedding sustainability principles, we optimize decision-making and resource distribution, empowering businesses to achieve long-term transformation and resilience.

Navigate Complexity with Confidence, reach out to Nicole Hackl & Manuel Güttl for support.

 

 

Autor:innen:
Harsimran Kaur (AT)
Nicole Hackl (AT)
Manuel Güttl (AT)

 

[1] *28th Annual Global CEO Survey (https://www.pwc.com/gx/en/issues/c-suite-insights/ceo-survey-2023.html)