While most organizations have joined the Transformation bandwagon, let us pause, and spare a thought, to what should this magic word achieve?
Even before embarking on a Transformation programme, a clear alignment of the initiative, with the strategic priorities of an organization, is a must. Failure to do so can prove disastrous, it terms of effort and money wastage and outcomes not bringing in
the game changing impact that was expected and required.
This brings us to the next important step in business transformation. Establishing the critical / key performance indicators (KPIs). These KPIs should be linked to the strategic, operational and financial priorities (like achieve, through Transformation,
a ROE of 15%; productivity improvement of 40%; ROI of 15%; expense ratio of 35% or a cost to income ratio of 55%). These KPIs then become the yardsticks by which the success and progress of the transformation initiative are measured for impact and predictability
of achieving the strategy.
Additionally, KPIs need to be outcome based (aligned to the strategic objectives); be target based (have a definite value like: KPI for quality / accuracy rate – 98% by quarter 1, 2015, with a benchmark of 99% for the same time period) and should have the
ability to be measured for the difference between the actual value, target value and the benchmark value.
Once the KPIs have been identified, the Transformation initiatives should be focused to bridge the gap between the benchmark value and actual value of the KPI. Recommendations for improvement in process, technology, product and people should be cost effective,
measurable and time sensitive. Quick wins should be identified to bring in dollar saves that can be used for the transformation programme. High and medium impact recommendations should be tied back to the key business metrics, and the positive impact on the
same, should be measured, on implementation, and showcased.
And, Transformation should lead to a culture of continuous improvement, for a company to stay relevant, in the long haul. Thus, transformation requires a culture change to be truly successful.