7 tips for a successful company transformation

Transforming a company is no easy undertaking. From strategy to implementation, every step must be taken carefully, precisely and with the ability to convince everyone involved.

I have been transforming companies for more than 20 years. I have learned a lot spontaneously. I have had successes and failures. But after years of experimentation, I’ve realized what makes successful transformations work. Here are my seven tried-and-tested tips for successfully mastering the complexity of a corporate transformation.

• Always start with the customer

No matter how “internal” the transformation may seem, its impact will inevitably reach your customers.

I used to simply focus on the problem: Cut costs? Done! Faster processes? Skip a few non-value-adding steps, add some automation – and voilà! It’s done!

However, after cutting costs, companies often hire employees again to ensure the same customer experience. Or worse, they ignore it altogether. Business suffers, and the company cuts wages further until it enters a downward spiral.

There are situations where you have to make difficult decisions and remove “layers of fat”. But sometimes those “layers of fat” are the frontline employees, as the number of FTEs cut looks more impressive to investors than cutting a few top executives. Remember the quote, “How many people could we save if we fired the CEO?”

Joking aside, every decision should focus on how it affects your customers. Happy customers drive business success, so ask yourself: How will this change improve their experience?

• Analyze the current situation before the transformation

Before you rush into solutions, stop and analyze where you stand. I know, I know, it sounds boring. You’ve put together a great team, the energy is high – and now you want them to evaluate the current situation? No time!

Take your time. I’ve seen dozens of projects where top executives were promised, “We’re going live in a month.” And they didn’t. They raised high expectations. Heads rolled, teams suffered under pressure, and projects took a little longer. To be more precise, 12 months longer.

You can’t manage something you don’t know. Thorough preparation is crucial. Make sure every team member understands the problem. Fall in love with the problem, not the solution.

Rushing into solutions without a deep understanding of the current condition is like treating symptoms without diagnosing the disease.

• Define the real causes – why do you need the transformation?

Superficial problems often have deeper roots. Don’t settle for quick fixes – dig deeper to identify the real causes of the problems.

We once had a project to digitize payments. We quickly came to the conclusion that all our customers should receive their invoices at their home address (don’t judge; it was a long, long time ago in a galaxy far, far away).

We developed an algorithm to synchronize all payments to a single due date per month, implemented it and prepared to send it out. Well – not so fast! After a quick look at the customer data, we realized that a maximum of 5 percent of our customers had a reliable address.

So: call, send a text message, do something! Easier said than done. The phone numbers were even less reliable. Why?

We went back to the drawing board and put the first project on hold. We questioned the admin staff, sales and customer service. Why did the sales agents react so defensively when all we really wanted to do was automate a process that took time away from the actual selling?

It turned out that the sales staff were not very enthusiastic about doing the administrative tasks that we wanted to automate. But they “defended their customers”. Of course, they would say. But why? We continued to ask why.

After a few weeks, we realized that they feared a change in the renewal commission. Rumors were circulating that it was going to be scrapped completely, so they protected their customer portfolios.

Long story short: we had to solve the real cause before we could move on. We drew up a new communication plan and intensified discussions with the sales department. Clear targets and deadlines were set for updating customer data.

Go deep and make sure you tackle the real cause of the problem. This way you create a permanent solution instead of just sticking a short-term band-aid.

• Set clear goals and measure progress

It’s easy to jump on the latest tech trend when everyone is talking about ML and GenAI. And it’s true – sometimes technology seems like a magic bullet for a business. But transformation isn’t about being trendy , it’s about making meaningful improvements.

Have a system that measures impact. Everyone wants accelerated growth and an exponential increase in customers. But make sure you understand the costs and operational capacity. Can you maintain the same level of customer experience? What is the impact on profitability?

I know people who would argue, “Amazon wasn’t profitable.” You’re not Amazon, and your investors might be less than thrilled when they hear about your global expansion plans on shaky foundations. If you can sustain an aggressive growth strategy – go for it! But if your processes break down and customer satisfaction plummets, you may be heading full speed into the wall.

• Involve people early on into the transformation

It’s amazing to see that most leaders don’t understand one simple fact: People are not here for your vision. They are here because of their own interests, dreams and ambitions. Besides, as humans we are programmed to like stability, not change. That is a fact.

Peter M. Senge, Senior Lecturer in Leadership and Sustainability at MIT, has written extensively about the concept of a shared vision. Involve employees, managers and partners right from the start. Share ideas, test and refine them based on feedback. Transparency and communication are your allies. And remember: no one likes surprises – keep everyone involved informed throughout the process.

After more than 15 years of stable growth, a company needed a comprehensive turnaround program. It needed to reposition itself on the market, develop new products and build a modern technology platform. No one knew how long the transformation would take.

The team met regularly and kept all stakeholders informed of progress. Sometimes things progressed quickly, sometimes there were setbacks. The pressure was high, but expectations could be managed through continuous communication.

Significant changes in the strategic direction of a company often also mean major personnel changes. Always think two steps ahead when it comes to the skills required. Some of the people concerned can be retrained, but this takes time.

There is no better recognition of the value of employees than offering them the opportunity to retrain and requalify. It shows that the company cares – a “rara avis” in this day and age.

• Work in the correct order

Introducing a new platform is not a strategy. Nor is it a transformation. I have seen many failed projects that started with “We need platform A”. What for? Why A and not B? Why a new platform at all?

When a new technology appears, I’m like a kid in a candy store. It shines, it seduces, and it’s addictive. But I would never start a transformation with technology.

The truth is: the customer is always interested in the value you bring to them. So focus on value first. Are you going to reduce costs through automation and thus create better value for the customer? Or do you just want to show off an impressive AI/ML/proprietary/intergalactic/quantum/earth-shattering seal?

When designing a new customer experience, don’t forget to optimize the supporting processes. Technology should come at the end – choose tools that fit your processes and needs, not the other way around. A shiny new system won’t fix broken workflows. An AI-powered chatbot won’t impress your customers if they wait forever for their order to be fulfilled. Try talking to the PayPal chatbot when you want your money back. A real pleasure, I can assure you.

• Be prepared to be flexible.

Even the best plans have their limits. Be prepared to change direction if something doesn’t work as expected. Flexibility is not a sign of failure – it’s a reality. Refine your solutions along the way and keep going.

Transformations are never easy, but with a customer-centric mindset, a clear understanding of your current state and a commitment to measurable impact, they can be incredibly rewarding.

Remember, it’s not just about changing systems or processes – it’s about creating sustainable value for your business, your employees and, most importantly, your customers.

So, how will you approach your next transformation?

Mirela Dimofte

Read also: InsurShift: Why is a civil engineer becoming a consultant for transformation in the insurance industry?