Thinking big with business - Deloitte

1 Thinking big with business transformation Six keys to unlocking breakthrough value The word transformation gets thrown around a lot these days, but it can have different meanings for different individuals and companies. In a world of unprecedented disruption and market turbulence, transformation today revolves around the need to generate new value to unlock new opportunities, to drive new growth, to deliver new efficiencies. All transformations require you to rethink how your enterprise creates value today and in the future. In other words, all transformations require you to think big. Why? Because incremental improvement is not enough to win in today's exponentially disrupted business environment. Your organization requires sustained growth in the face of near constant disruption, and sustained growth requires agile reinvention. It's not enough to win today. You have to be able to continue to evolve in the future. 2. The big transformation pitfall An effective business transformation Understanding the strategic keys to achieving breakthrough value What is business means your organization can survive and thrive as you pursue new In light of the potential risks, aligning all of the elements to get business transformation?

2 It is the opportunity to innovation-driven opportunities that transformation right requires more emerge, as you respond to shifting than an A-to-B roadmap. It requires market demands, and as you navigate an integrated approach linking evolving regulatory complexities. You'll want to proceed with caution, business strategy to transformation ambition to executional discipline in define a bold ambition that however. Transformation today takes place at dizzying speeds, requiring a order to unlock breakthrough value. Big questions lie ahead. The good goes beyond incremental change the opportunity level of integration and alignment that news is that we know some of the many enterprises are not prepared to answers already. They're helpful keys handle. Because many initiatives that once you may choose to use to make your business transformation one that to rethink your business took five or six years to complete can deliver the value you are seeking.

3 Are now being implemented in a We've identified these six keys and operating models to year or less, many organizations based on hundreds of engagements now need to manage mountains of information, compressed timeframes, with some of the world's leading companies, and we've seen first-hand deliver breakthrough value. and countless decisions that affect nearly all aspects of strategy and how these keys can help unlock value that's both revolutionary and It involves strategic decisions that affect where you'll operations. The risk of failure is evolutionary. great, but companies that can pull the disparate elements into alignment can achieve bold objectives, now and into the future. grow, how your organization operates, and what kinds of performance improvements you can expect. 3. 1. Begin with a strategy-informed resource allocations, and performance capture value. That knowledge should ambition expectations. It helps shape an lie at the core of your transformation Leaders in business transformation executable transformation ambition ambition.

4 Working toward strategic typically have a clearly articulated, well- that is, the value that should come from clarity and consensus on the ambition understood business strategy. Often the transformation. helps executives align their goals and an organization's strategic choices Organizations that have invested activities. It helps them more clearly although understood tacitly by senior in articulating their strategy can articulate desired transformation leadership are poorly translated into translate strategic goals into a outcomes, from a financial perspective The BIG question: downstream implementation choices. bold yet realistic transformation or from an operational perspective. How do we ensure that the ambition that can be executed by the And it helps them adjust elements of transformation goals and The result? The dilution of value. organization. These companies have transformation strategy based on the objectives support our A sound strategy serves as the business strategy?

5 A deep understanding of how their ability of the organization to achieve foundation for a broad range of organizations will create, deliver, and those outcomes. enterprise-wide investment decisions, 4. 2. Lead with capabilities to address immediate market retailers to drive growth. The company Leaders in business transformation opportunities. It also allows them to determined that it needed to transform quickly focus and define the specific build discipline they'll need to evolve three integrated capabilities. enterprise capabilities that will help continuously, and it can help them Rethinking its customer engagement achieve competitive advantage. In establish the new trajectory that they'll capability provided a set of products, reality, only a small number of an need to keep pace with disruption. insights, and services for distributors organization's total capabilities play a Ultimately, leaders should move and retail customers, tailored to critical role in helping the organization quickly past a people, process , and different segments.

6 The company's The BIG question: find new ways to differentiate and technology definition of capability to market insights capability was What do we need to improve and how do we improve it compete. Focusing on those critical one that represents a more holistic and revamped to achieve a single source to achieve transformation capabilities can help deliver greater complete picture. For any capability, of truth for driving information to objectives? value, help leaders drive competitive it's a definition that provides focused action. And the company's portfolio advantage, and help the organization support for the organization's strategic and brand management capability realize its business transformation choices and touches on six dimensions: was upgraded to create a tighter ambition. mission, insights, integration, link between customer pricing and Knowing where to start is critical for processes, technology, and talent.

7 Innovation decisions. By investing in unlocking value through a business Here's an example. A food and these specific new capabilities, the transformation. Prioritization allows beverage company wanted better organization was able to separate organizations to quickly evolve relationships with distributors and itself from competitors and establish a platform for future growth. 5. The Deloitte Capability HexagonTM provides a comprehensive approach to defining and designing enterprise capabilities across six dimensions: Mission. The purpose of a capability, how it will operate, and MISSION. what value it will deliver. The mission is derived directly from and N. IO. supports the company's strategy. IN. AT. SIG. Insights. The decision flow, information, and analytics that drive GR. HT. informed and timely decision-making. TE. S. IN. Integration. Clear roles, decision rights, and policies that facilitate integration within and across other capabilities, functions, and CAPABILITY.

8 Partnerships. Processes. An integrated and efficient set of processes designed to S. TA. achieve the desired outcomes. ES. LE. OC. Technology. The software, hardware, and tools required to enable NT. PR. the capability. Talent. The competencies, skills, talent infrastructure, and workforce planning that enable an optimal talent base to execute the capability. TECHNOLOGY. This broader viewpoint allows organizations to frame and link execution to the value defined in the transformation ambition. 6. 3. Drive to value A thoughtful value case becomes the Failure to define the value expected Leaders in business transformation linchpin that links the transformation can create problems downstream. articulate upfront the value they expect ambition to capability design and That failure, in turn, can result in to achieve through transformation, execution. It does so by defining and backtracking to address issues that and they zealously monitor, measure, breaking down the transformation should have been identified upfront.

9 And track value throughout their program into manageable initiatives, For example, a manufacturing transformation. Value should be the each with specific target values mapped company might overlook a specialized thread that links your business strategy to capabilities. A results management distribution capability needed The BIG question: and your transformation together. office then drives all aspects of value to support a new, multichannel How do we reinforce a Take time to be explicit about exactly delivery by understanding (1) the value business model. Similarly, a global relentless focus on value how you intend to create value. Then of the program and (2) how to manage financial institution could miss value throughout the establish strong, clear connections to trade-offs and dependencies to achieve opportunities available through transformation journey? your execution plans. the targeted transformation value. strategic tax planning.

10 These aren't minor considerations. They can make or break the effectiveness of your transformation. 4. Build in sustainability By fostering an adaptive organization For example, a consumer products Leaders in business transformation that embraces new ways of delivering company created a new role to own know that real value emerges over value, leaders can provide a foundation the transformed capabilities within time, through sustainable change to sustain value post-transformation. the organization. Individuals in the that endures. To put the right They can engage and empower other role were responsible for moving a capabilities, competencies, and leaders within the enterprise to model capability from its current state to its change-adaptive culture in place for and reward new behaviors and equip targeted future state, for delivering sustaining and growing the value of the workforce to make more effective, the value cited in the business case, The BIG question: the transformation, data is essential.