The last two years have seen companies embracing rapid-fire transformations to keep pace with unprecedented challenges faced during the pandemic and its aftermath of uncertainty. But a second wave is approaching on the heels of the initial rush to transform.
A handful of companies are eschewing one-time improvements in favour of a more holistic and deliberate approach: one that transforms all aspects of their business, takes advantage of new technologies, and explores new ways of operating with the goal of developing a continuous capability of transformation. Trevor Gruzin, Senior Managing Director at Accenture, dubbed these companies as “reinventors” in the Total Enterprise Reinvention report he co-authored, which outlines how companies can achieve higher levels of performance through technology and innovation.
Business leaders are aware of the role IT can play in their success, and the numbers show. Despite supply chain constraints, increasing impact from inflation, and political uncertainty, investments in digital technology continue to grow, with IDC forecasting digital transformation spending in Asia Pacific to reach US$1.05 trillion by 2026.
Unfortunately, returns often do not rise at the same pace as investments. The Accenture report found that seven out of 10 enterprise transformation efforts fail to fully meet business leaders’ expectations. Why are they not realising the true business value of these efforts? The problem lies in the siloed approach they adopt when transforming multiple parts of their enterprise.
Reinvention and transformation: two sides of the same coin?
Not quite. According to Gruzin, total enterprise reinvention is not a time-defined or process-specific initiative but a deliberate strategy, one that has digital at its core and takes on a rather ambitious approach.
So what are reinventors doing differently? At the heart of it is the boldness they possess, which is driven by a different view of the world.
“Reinventors look at change across boundaries and avoid silos. They go beyond benchmarks. They embrace the art of the possible. It’s that fiery ambition to set a new performance frontier that reinvents not just the company but the entire industry that distinguishes them from others.”Trevor Gruzin, Senior Managing Director at Accenture
Here’s a closer look at the six characteristics that set them apart:
- Reinvention is the strategy, no longer an execution lever
- The digital core is now the primary source of competitive advantage, leveraging cloud, data, and AI through an interoperable set of systems across the enterprise that enables rapid development of new capabilities
- Reinvention goes beyond benchmarks and embraces the art of the possible, with technology and new ways of working creating a new performance frontier
- Talent strategy and people impact are central to reinvention and not an afterthought, as companies consider change management a core competency
- Reinvention breaks down organisational silos and tackled capabilities from end-to-end
- Reinvention is continuous, not bound by a time or process, but a capability continuously tapped by the organisation
As it stands, companies that embrace a total enterprise reinvention strategy are already outperforming their peers. Reinventors are proven to deliver 1.3 times more financial value in the first months than transformers, showing not just performance but also the speed of return. Financial gains aside, reinventors also see improved performance on sustainability as well as across customer, supplier, and employee experiences.
It’s heartening to see that companies are starting to systematically change the game for their business. Almost one in 10 companies surveyed are transforming every part of their company, establishing new capabilities, and fostering a culture ripe for continuous reinvention.
Four categories to kick-start reinvention
Ask yourself questions around your current transformation journey, business ambition and strategy, talent, and technology.
“Where are you on your transformation journey? Do you want to be a reinventor? You must first address these because the answers will set the tone for your reinvention,” Gruzin adds.
It is a given that having a deep understanding of your digital core—be it level of maturity or gaps—and the way you invest in the digital core is critical, but talent is often overlooked. Do you have existing change management capabilities to support your continuous transformation journey? Do leaders have sufficient technology acumen to understand the art of the possible and what it can do to drive reinvention?
Gruzin further stressed the importance of tying technology objectives to change management capabilities. “Make sure everyone across the organisation understands the technology and how it can be used to drive business change. Building that awareness will go a long way to fostering a culture of continuous reinvention.”
As companies brace the choppy waters of an economic slowdown, it’s all the more crucial for them to be able to change the way they operate, the markets they serve, and the products and services they deliver if they want to stay afloat and get ahead. And this requires a fundamental shift to put technology at the heart of business strategy.
“At a time when sustainable, high-impact growth has become imperative, the time to move forward on a digital-first, continuous reinvention strategy is now. Reinventors are combining the power of technology and human ingenuity to enable their business to reinvent how they go to market, operate, partner, and create value to unlock a new performance frontier,” concludes Gruzin.