Why Some Business Transformations Fall Flat

 
 
By Dennis McCafferty  |  Posted 05-06-2015 Email
 
 
 
 
 
 
 
 
 
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    United Undertaking
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    United Undertaking

    98% of surveyed executives said their organizations are in a state of transformation, up from 93% last year.
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    Missed Target
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    Missed Target

    25% of those surveyed said prior transformation programs have failed to achieve intended business benefits.
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    Top Transformation Drivers for the Next Three Years
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    Top Transformation Drivers for the Next Three Years

    Customer demand: 32%, Changing/expanding global environment: 28%, Industry consolidation: 24%, Government compliance: 23%, Disruptive tech: 23%
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    Biggest Barriers to a Successful Business Transformation
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    Biggest Barriers to a Successful Business Transformation

    Existing corporate culture: 38%, Underestimation of the significance of operational model change: 38%, Inadequate or legacy tech: 32%
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    Correction Required: Missing Metrics
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    Correction Required: Missing Metrics

    Only 14% of those surveyed define metrics and align them with strategic vision and desired business outcomes before launching a transformation effort.
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    Correction Required: Missing Template
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    Correction Required: Missing Template

    Just 29% said their organization is highly capable of developing business and operating models to pursue transformation.
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    Correction Required: Action Item
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    Correction Required: Action Item

    Only 32% said their companies are highly capable of executing on a transformation implementation plan, while just 36% said their organizations are highly capable of continuously improving the implementation model.
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    Starting Point
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    Starting Point

    57% said their organization is likely to approach transformation by beginning with a strategic plan to address a defined set of high-impact issues, while 35% said their company is most likely to focus on transforming a specific function.
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    Outcomes Assessment
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    Outcomes Assessment

    27% of those at organizations likely to address high-impact issues during a transformation yield less value than expected, compared to 22% of those which transform a specific function and 19% which transform a particular technology.
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    Competitive Edge
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    Competitive Edge

    90% of transformations triggered by new or emerging competitors achieve the anticipated value or more, compared to 70% of transformations driven by existing competitors.
 

Nearly all companies are pursuing some kind of organizational transformation, according to a recent survey from KPMG. However, a significant share of these initiatives are failing to achieve intended business benefits. Barriers to success include the existing corporate culture and inadequate legacy tech. Companies also hurt themselves when they fail to align impactful metrics to both strategies and needed business outcomes before launching a transformation. "While transformation is widespread, success is not," said Stephen G. Hasty Jr., global transformation leader at KPMG. "Organizations face a convergence of triggers, including changing customer demands and preferences, disruptive technologies and the evolving regulatory environment. Companies can achieve more value when they respond swiftly to these triggers with a clear understanding of how transformation supports their strategic vision and desired business outcomes." More than 960 executives-most of them C-level-from U.S.-based multinational organizations took part in the research.

 
 
 
 
 
Dennis McCafferty is a freelance writer for Baseline Magazine.

 
 
 
 
 
 

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