Firstly, it will behoove us well to define what is meant by Capability-based Enterprise Transformation? It is a way to identify, build and manage business capabilities and business processes, and other enterprise modeling methods to capture the essence of a company and then harness these capabilities by linking execution to strategy and matching capabilities to enterprise vision and mission.
Secondly, any time is the right time to embark on a business capability-driven enterprise transformation efforts. However, in reality, firms need a jolt – What Tom Peters calls a “blinding flash of the obvious,” so to speak – to jumpstart any transformation effort. If you are a business architect or an enterprise transformation professional, here are some instances and events that will be a good inflection point to commence the transformation journey. You’ll need to capitalize on the opportunity a situation affords and deliver value.
Corporate Upheavals: Whether it is underperformance in sales/profits or an activist investor chomping at the bits, any corporate turmoil is a good time to launch or accelerate a transformation effort. When faced with discontinuities the top brass is willing to make changes to the status quo and allow exploring new paths and possibilities.
Market Shifts: Whether it is a desire for “green goods” or a preference for “form and function together,” market shifts are a perfect opportunity to embark on a transformation effort. Often, companies do not react to these market shifts at the beginning – a state of denial, if you will – dismissing these shifts as fads that will pass. When indeed there is a realization that the shift is unstoppable, companies scamper to make changes to meet the emergent market demands. As a transformational professional, the earlier you can heed the warning signs and have the ability to convince the powers-that-be, the better chance you’ll have of the transformation being successful.
Societal Megatrends: The aging of the first world or the youthfulness of the third world – both offer tremendous opportunities and threats to an enterprise. Recognizing what Toffler et al. termed the “Megatrends” and transforming the enterprise to be ahead of the curve is an important skill and competency that enterprise and business architects who are a part of the transformation team must possess.
Technological Advances: Technological obsolescence is a clear and present danger for any firm. As the advent of digital photos obviated the need for film-based cameras; or how Walkman music players gave way to digital MP3 Players, there is always a possibility that technological advances will cause obsolescence to entire industries. If you a part of a firm facing these discontinuities, planned obsolescence and generational leapfrogging in technology will be an ideal recipe for success.
Inorganic Growth: Mergers and acquisitions are a way of life in the corporate world. Any combination or divestiture will be an excellent opportunity for initiating a transformation program. A capability-based approach can help in eliminating overlaps and redundancy and select right capabilities from the resulting firm.
Government Rules and Regulations: Industry self-regulation, as well as government regulation, tends to change regularly as ebbs and flows of business life cycle occur. Variations in the regulatory framework and the cost and effort of adherence are often a trigger point for enterprise transformation.
Leadership Transitions: Senior leadership changes and transitions are another ideal opportunities to begin a transformation. The new administration, intent on making a mark and sparking a change, is more amenable to transformation initiatives.
Major Project Failures: The truth is while success begets arrogance, failures in any major initiative or project will be a time for introspection and change. And these are opportunities for not just finger pointing, but drawing up transformation plans to not only alleviate current problems but foster a new way of doing things.
Capability-based Enterprise Transformation is a paradigm shift and an important endeavor for enterprises to consider, plan and execute.
Note: This article is a part of a series of insights published by Capstera.com, a capability-based enterprise transformation framework, and software. Capstera.com helps companies better define their business to link execution to strategy and help build optimal IT solutions. Capstera leverages capabilities as the capstone of business definition and combines best elements of business architecture, capabilities mapping, process analysis, and requirements management. This enables companies to establish a common language and foster alignment across business/IT, it helps reduce redundancy and rework, and it helps aligns execution with strategy.
If you wish to align your Business and IT, and link Strategy to Execution, please subscribe to Capstera’s robust business architecture and capability modeling software.