It is neither new nor surprising that companies are continuously forced to adapt their business model to the economic and social environment. However, these strategic reorientation drivers have never been as dominant and inevitable as today. In the following interview, Rakesh Thadani, Director Strategic Engagements & Advisor Relations DACH of Wipro, and Serden Ozcan, Professor and Chair of Innovation and Corporate Transformation at WHU – Otto Beisheim School of Management, point out the challenges during the process of Corporate Transformation. Furthermore, they illustrate the most important skills of renowned successful executives.
Are there any companies that mastered the Corporate Transformation extraordinarily well? What are the best practices on an international level?
Rakesh Thadani (RT): Sure, Microsoft is definitely a good example: Since Satya Nadella became CEO in 2014, the company has made a startling transformation. Microsoft grew tremendously after creating an own cloud system with a device-independent and standardized user interface. Further, they restructured multiple departments and teams internally. Their new strategy is obvious: customer service. Microsoft puts the customer´s needs first, even if that leads to compromises with their eternal competitor Apple.
What are the most important skills of senior executives during a Corporate Transformation?
Serden Ozcan (SO): Executives should stay up to date, learn quickly and think outside the box. Additionally, they should not succumb themselves to organizational inertia. Therefore, it is extremely important to show enthusiasm, passion and commitment for the goals of a corporate transformation.
Moreover, a successful corporate transformation must start at the top. The top-level management needs to demonstrate the transformation to their teams in a comprehensive and visible way. At the same time, inspirational leaders have to perform a delicate balancing act: On the one hand, they need to fully engage and assume personal responsibility; on the other hand, they need to delegate wisely to ensure that the employees focus on the company´s goals.
What are the most important drivers of Corporate Transformation?
RT: One of the biggest driver is customers´ demands, which keep growing. The demands of current and future employees is just as important. The “resource” of skilled professionals becomes scarcer which changes the balance of power between employer and employee. Senior executives must adjust their company´s strategy to stay competitive.
What are the biggest challenges for companies during a Corporate Transformation?
RT: Unfortunately, there are still a lot of executives who cling to the status quo and distrust innovations. This is often caused by insecurity or fear, or sometimes due to convenience. Therefore, change processes slow down, or in worst cases – never take place. In my opinion, this unwillingness to change is caused by people who define themselves by their status within the company and not by their personal skills.
Senior executives, specifically, need to improve their professional skills permanently for the economic success of their company. This includes collaborating with other people within the company and with other companies, too. Collaboration and transparency will become even more important in the future.
SO: Let me focus on two important observations: A key challenge for companies is to mobilize the entire organization towards one long-term goal: Corporate Transformation. Corporate Transformation may end up in a complete reorganization of the entire company. This can cause uncertainty and fear of change at the beginning of such a process. Even if, initially, corporate leaders succeed in getting people on board, the process could quickly stop after the first changes have been implemented and eventually lose momentum. This is why continuous motivation is of utter importance and falls in the duties of corporate leaders. They need to be proactive and keep their employers united behind one process.
Moreover, corporate transformation can stop completely, if quick wins are the focus. The reason behind this are poorly thought through strategies or so called ‘cosmetic changes’ that are only focused on inconsistent projects. In order to avoid those obstacles, corporate leaders focus on pursuing the transformation agenda. Companies should formulate an overall strategy, which coordinates sub-projects to create synergies systematically.
“Life long learning” – in particular, this holds true in the areas of leadership behavior and corporate change. To meet the challenges of the market, executives should always reflect their corporate strategy and leadership skills. Modern and inspiring leadership strategies make it possible to make a company fit for the future by expanding existing competitive advantages and tapping new potential.
WHU’s Advanced Management for Senior Professionals Program provides a 6-day intensive format for experienced senior management executives, providing new insights into strategy, leadership and global economic development. Participants will have the chance to exchange views with the help of group reflections and peer-to-peer coaching and thus generate direct input for their own company.