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January 15, 2024, vizologi

Changing Ways: The Power of Transformational Strategy

Transformative strategy can revolutionize how businesses operate. It’s crucial for survival in today’s competitive market, from small startups to multinational corporations. This article explores its impact on driving success and growth for businesses of all sizes. Understanding its power helps organizations position themselves for long-term success in an ever-evolving marketplace.

What is Transformational Strategy?

Understanding the Heart of Change

Identifying core capabilities is important during a transformational strategy. It involves organizations understanding what they do best and aligning those abilities with their overarching purpose. This can drive growth and engage employees.

Leaders play a crucial role in promoting a flexible environment where employees feel empowered to embrace change and take risks. This can be seen in Ecolab’s expansion into water technology and Netflix’s shift to original content production.

Companies can leverage technology to explore new platforms during a transformational strategy. This can be seen in DBS Bank’s transition from traditional banking to new fintech business models.

Examples of Successful Transformational Organizations

Many organizations have successfully transformed and achieved significant change. Some examples include Ecolab, Netflix, Tencent, Intuit, Siemens, Fujifilm, and DBS Bank. They have achieved success through various strategies, like creating a higher-purpose mission, letting go of the past, leveraging core capabilities, and seizing digital opportunities.

Leaders and teams within these organizations have exhibited behaviors such as making tough choices, phasing out traditional businesses, utilizing brand and technological know-how, and transforming services. These actions have supported and driven the transformation of these organizations, leading to their overall success in reaching their strategic goals and staying ahead of the competition.

Identifying Core Capabilities

Spot Your Strengths

To identify the best things your organization does, take a close look. This may include expertise in technology, a strong brand reputation, or unique skills and resources. Align these strengths with the mission, ensuring they drive growth and engage employees. Encouraging flexible thinking and innovative approaches is crucial. Leading without fear and driving change can be done by fostering a culture that values creativity, risk-taking, and open-mindedness.

Providing opportunities for professional development and collaboration is important too.

Tie Strengths to Higher-Purpose Mission

Identifying and leveraging core capabilities to align with a higher-purpose mission is about understanding the organization’s unique skills, resources, and expertise. For instance, Siemens used its brand and technological know-how to address global megatrends, and Fujifilm moved from a photographic film monopoly to a healthcare and pharmaceutical business.

Leaders and teams can connect their strengths to the organization’s higher-purpose mission by focusing on how their skills and expertise can contribute to the broader mission. This may involve adapting to new growth markets, embracing digital opportunities, and making tough decisions that align with the organization’s overarching purpose and goals.

By aligning strengths with the higher-purpose mission, leaders and teams can drive transformation and change by tapping into their unique capabilities and enhancing their impact on the organization’s overall strategic direction.

Transformational Strategy Behavior in Leaders

Lead Without Fear

Leaders can effectively lead without fear in a transformational strategy by:

  • Embracing a higher-purpose mission.
  • Letting go of the past to focus on the future.
  • Leveraging core capabilities.
  • Seizing digital opportunities.

Successful organizations that have done so include:

  • Ecolab’s expansion into water technology.
  • Netflix’s shift to original content production.
  • DBS Bank’s transformation of services from traditional banking to new fintech business models.

Leaders can encourage flexible thinking and foster innovation across departments by:

  • Creating a purpose-driven mission to drive growth and engage employees.
  • Making tough choices to shed outdated aspects.
  • Leveraging core capabilities to enter new growth markets.
  • Seizing digital opportunities through new platforms and business models.

Encourage Flexible Thinking

Leaders can encourage flexible thinking within their teams by implementing strategies like:

  • Encouraging innovation
  • Promoting idea-sharing
  • Fostering a culture of open-mindedness

This creates an environment where employees feel empowered to suggest new ideas and approaches, driving transformational change. Organizations can foster flexible thinking and adaptability by:

  • Embracing agility
  • Promoting continuous learning and skill development
  • Encouraging experimentation and risk-taking

This helps companies stay ahead of the curve and adapt to new challenges and opportunities. Technology can be used to promote flexible thinking and innovation through:

  • Digital platforms
  • Data analytics
  • Virtual collaboration tools

These enable employees to work more efficiently, share ideas seamlessly, and adapt to changing business needs in real-time.

Leveraging Technology for Transformation

Seize the Digital Opportunity

Businesses can take the digital opportunity to use technology for transformation. They can do this by embracing new platforms and business models. For example, Netflix shifted to making original content, and DBS Bank changed its services to new fintech models.

By doing this, organizations can adapt to the changing digital transformation landscape and grow. To do this, they should identify core capabilities. This includes using existing brand recognition and technological expertise. For instance, Siemens used its brand and technology to address global trends, while Fujifilm moved from photographic film to healthcare and pharmaceuticals.

Leaders can also encourage flexible thinking and lead without fear in the digital age. They can do this by setting a higher-purpose mission to drive growth and engage employees. This can be seen with Ecolab’s expansion into water technology and Tencent’s focus on improving human life through digital innovation.

Explore New Platforms

Transformational change happens when a company makes big moves in the business world. These moves can either lead to huge success or big failure. Some examples of these high-stakes opportunities include improving core business processes, merging with or acquiring other companies, changing competitive strategies, and implementing enterprise resource planning (ERP) systems.

One of the most notable examples of major change is organizational reengineering. According to Michael Hammer and James Champy, who wrote the book “Reengineering the Corporation” in 1993, reengineering is essentially “starting over”. Their formal definition is: “the fundamental rethinking and radical redesign of business systems to achieve dramatic improvements in critical performance measures like cost, quality, service, and speed.”

More than a decade later, Dr. Hammer is now promoting the use of process redesign and management for driving growth and operational innovation, creating what he refers to as the “process-centered enterprise”. In this model, a company continuously reinvents itself to produce ongoing performance improvements and stay ahead of the competition.

Transformational Strategy Behavior in Teams

Build Strategic Capability

Leaders can identify and leverage their organization’s core capabilities to achieve strategic transformation by thoroughly assessing their existing competencies and determining which can be leveraged in new markets or industries.

For example, Siemens utilized its brand and technological know-how to address global megatrends, and Fujifilm successfully transitioned from a photographic film monopoly to a healthcare and pharmaceutical business. Encouraging flexible thinking and fostering innovation across departments as part of a transformational strategy involves creating an environment that welcomes new ideas, rewards risk-taking, and supports experimentation. An example of flexible thinking is the broadening of Tencent’s corporate outlook to improve the quality of human life through digital innovation.

To develop a blueprint for transformation that includes a focus on delivering value to customers through innovation and redefining business models with the customer in mind, organizations should prioritize customer-centric innovation strategies. Including the objective of driving value for customers as a focal point can guide strategic initiatives and investments toward innovation efforts that will yield the most significant customer impact. This is evidenced in the example of Ecolab’s expansion into water technology to benefit both the company’s growth and the global community.

Foster Innovation Across Departments

Fostering innovation across departments means creating a collaborative environment. This allows employees from different divisions to freely share ideas and work together to achieve common goals.

To achieve this, you can establish regular brainstorming sessions, team-building activities, and cross-functional projects.

Also, leaders can promote innovation by providing resources, mentorship, and support for employees to explore new ideas and take calculated risks.

By breaking down silos and encouraging open communication, departments can tap into each other’s unique strengths and perspectives. This drives innovation across the organization.

Moving Beyond the Past to Embrace Change

Let Go of Outdated Practices

To embrace change and transformation, organizations should let go of outdated practices. These include rigid hierarchies, resistance to technological advancements, and a focus on short-term gains over long-term sustainability.

To identify and prioritize which outdated practices to shed, a company can:

  • Conduct a thorough analysis of its current processes
  • Seek input from employees at all levels
  • Benchmark against industry best practices

Once identified, leaders and teams can successfully let go of these outdated practices and adopt a growth mindset by:

  • Fostering open communication
  • Providing training and resources to support new initiatives
  • Incentivizing innovative thinking

Additionally, leaders can set the tone by:

  • Modeling a willingness to embrace change
  • Encouraging a culture of flexibility and adaptability

By taking these steps, organizations can position themselves to enter new growth markets and drive impactful transformation within their industry.

Adopt a Growth Mindset for New Markets

Organizations adopt a growth mindset for new markets by identifying their core capabilities and tying them to a higher-purpose mission. This involves recognizing what the organization does best and aligning it with a broader, more meaningful goal. Companies like Ecolab, Netflix, and Tencent exemplify this approach.

Leaders can exhibit transformational strategy behaviors by encouraging flexible thinking and leading without fear in the face of change. They can let go of the past to focus on the future, make tough choices, and embrace disruption to drive business transformation, as evidenced by the decisions made by Intuit and Siemens.

Furthermore, organizations can leverage technology and foster innovation across departments by seizing digital opportunities, transforming services, and creating new business models. Companies such as Siemens and DBS Bank reflect the evolving landscape of digital transformation.

Developing a Blueprint for Transformation

Create a Roadmap for Change

Leaders can drive transformational change by identifying and leveraging their core capabilities. They should recognize their unique strengths and areas of expertise. These capabilities can then be used to enter new growth markets and address global megatrends. Siemens is an example of a company using its core capabilities to transform into a digital services company.

Leaders can also expand into new industries or sectors as part of driving change. Ecolab’s shift into water technology and Netflix’s move into original content production are examples of this.

Organizations can develop a roadmap for change and measure progress using real metrics. They need to establish a clear, purpose-driven mission to drive growth and engage employees. This lays a solid foundation for further strategic planning and transformational initiatives. Specific goals, priorities, and initiatives should be set to measure progress and ensure that the transformational strategy is on track. DBS Bank successfully transformed its services, reflecting the changing landscape of digital transformation.

To deliver value to customers, organizations should focus on innovation and redefine business models with the customer in mind. This means creating new products, services, or business models designed to meet customer needs and preferences. Fujifilm’s successful transition from a photographic film monopoly to a healthcare and pharmaceutical business is an example of this approach. Tencent also broadened its corporate outlook to improve the quality of human life through digital innovation. This customer-centric approach is important in today’s highly competitive business environment.

Measure Progress with Real Metrics

Real metrics are important for measuring progress in transformational strategy. Cost reduction, quality improvement, customer satisfaction, and revenue growth are tangible, measurable results that reflect the impact of strategic changes.

Organizations can track cost reduction and quality improvement to gauge the efficiency and effectiveness of their initiatives. Meanwhile, customer satisfaction and revenue growth serve as indicators of meeting customer needs and driving financial growth.

Using real metrics involves establishing baseline measurements, setting specific targets, and regularly monitoring and analyzing the data. This can help organizations track the impact of their initiatives and make informed decisions.

By tracking these metrics, organizations can gain a comprehensive view of the success of their strategies, driving meaningful, positive change.

Transformational Strategy Behavior and Customer Focus

Deliver Value to Customers Through Innovation

Organizations can deliver value to customers through innovation by redefining their business models with the customer in mind. This involves making tough choices, shedding outdated aspects, and embracing digital opportunities. Companies like Netflix, Siemens, and DBS Bank have exemplified this approach.

Siemens leveraged its brand and technological expertise to address global megatrends, while Netflix shifted to original content production and DBS Bank transformed its services from traditional banking to new fintech business models. By embracing a higher-purpose mission, companies can drive growth and engage employees, making it possible to provide greater value to customers through innovative products, services, or business models.

Redefine Business Models with the Customer in Mind

Redefining business models with the customer in mind means focusing on creating value for the customer, not just generating revenue. Embracing customer-centric strategies helps businesses address specific needs, preferences, and pain points. This can involve using customer data to personalize products, improving processes to enhance customer experience, and implementing feedback loops for continuous improvement.

Companies can also deliver value through innovation by researching market trends, experimenting with new technologies, and staying agile to adapt to changing consumer demands. By tying their strengths to a higher-purpose mission, businesses can better meet customer needs by aligning their core competencies with broader social or environmental objectives.

For example, companies that prioritize sustainability or social responsibility can develop products and services that resonate with like-minded consumers.

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