Shapers are the highest level on the Organisational Change-fit ladder. Intentionally shaping their industry as they go about their work. Even among the Shapers, the Chinese in recent years stand out for the global scale and pace of their progress.
During the Covid lockdowns of 2020 one of the revelations for me that really stood out for the changing world was, as an Australian catching up with Asia Transformation & Turnaround colleagues on our online community forums, the ‘live’ case studies coming out of China. The stories of scaled digitisation layering social, mobile, AI technologies; revolutionary new business model experiments; and companies launching hyper-growth initiatives at a time most people I knew were navigating the week to week challenges of Covid restrictions.
(Source: Season 1 and 2 Transformers Unite, www.austta.org )
BCG 2021 research from a global study focused in on the Chinese companies that have delivered significantly increased value through their transformation strategies. Five of these ‘transformation heroes’ as they referred to them are:
- global tech giant Alibaba
- state-owned insurer CPIC
- auto manufacturer Geely
- tech company Acer
- privately-owned apparel company Semir
Their stories are expanded here.
Reaffirming lessons for aspiring Shapers from the characteristics of these ‘Transformation heroes’:
- Proactive over Reactive
Research found that “companies that transformed pre-emptively created value, reflected in Total Shareholder Return (TSR) that, on average, was 6% higher over a three-year period than the TSR of companies that transformed reactively.”
- Drive Both Growth + Operational Excellence
“In the last two global downturns, the most successful companies were diligent about pursuing operational efficiencies, thereby improving their profit margins. But revenue growth was the largest driver of their performance, accounting for nearly 50% of TSR, or twice the impact from cost reductions.”
- Shape the organisation and culture
If management transforms the value proposition, the entire organisational structure and talent pool needs to be in sync with the new strategy – an outdated corporate culture cannot compete in a changing market. A comprehensive strategy for top-down communication, along with relevant training, can instil a new culture and mindset in the organization.
- Manage a program NOT lots of projects
Research showed that formalized large transformation programs outperformed smaller-scale efforts by an average of 5% in annual TSR in a five-year window.
Like McKinsey and other global research on the topic of organisation transformation, the BCG research states that “… globally, 75% of corporate transformation programs fail to improve the companies’ short or long-term ability to create value.” I am passionate about shifting these odds. It does not have to be this way. Executive teams building Change-fitness can shift the odds towards them for higher success.