Evidence from dozens of transformation processes that we have conducted and many others, reported in the literature, says that attempts at transformation that begin in the hard core of organizations – in the business model or in the centers of power – have more difficulty producing significant results than initiatives that take place around the edges. But it is not the case that any opportunity that is on the periphery of business offers the best – and with the greatest potential for success – opportunities for transformation in organizations.
There is a class of peripheral opportunities that facilitates, usually very much, almost any type of strategic transformation process, and that is what we are going to address here.
the spatial metaphor
The first challenge of a strategic [digital] transformation process is the discovery, identification, location of opportunities.
Of course, there are opportunities to initiate a transformation from the organization’s hard core, but this is a very difficult, risky adventure and may implode the business. Therefore, it is very rare to start a transformation from the core of business.
The middle layer [that of managers] works all the time under pressure from inside and outside. Here, too, there is no space to seek opportunities at the risk of halting the organization.
The surface layer [that of line collaborators] is fragile and can detach from the organization at any time; in this layer, opportunities have little influence on the organization.
But there are opportunities that orbit the organization in a kind of atmosphere and that, if treated digitally and strategically, with method, have great potential to trigger experiences of innovation and be, in time, incorporated by the organization.
the temporal metaphor
the moment of opportunity
From the point of view of time, not every opportunity is at the right time to be the starting point for a strategic [digital] transformation. For this “time window”, we propose to consider the relationships between simple verb tenses [past, present and future] and the relevance of business opportunities.
Peripheral opportunities [in the past] and criticism [in the present] need to be treated with an urgency charge that invalidate them as an element of cultural transformation of the business and, therefore, must be dealt with at a pace appropriate to the size of the impact they have on the business.
On the other hand, peripheral opportunities [in the future] and critical ones [in the present] must be monitored, taken care of to ensure the survival of the business in times of transition. Nor are they suitable to be adopted as central elements of a strategic digital transformation, as they tend to lose relevance over time.
The focus for strategic [digital] transformation must be on peripheral opportunities [in the present] and criticism [in the future]. These are the ones that have a great potential to start a real strategic [digital] transformation in organizations. Their challenges can be addressed in an incremental and iterative way, sufficiently experiential to accept the pace necessary for a real transformation.
the operational metaphor
the opportunity mapping
Critical peripheral opportunities orbit the vast majority of businesses. Finding them, however, is not a trivial task. Many of the efforts in this direction are intuitive and depend heavily on the ability of certain people.
But there is a set of methods and tools that can help in this search, ordering and articulating small steps that take organizations in a structured way to more transparent paths on the journey.
Returning to the spatial metaphor, the first effort to find critical peripheral opportunities is to choose environments that surround the business at an adequate distance so that, at the same time, it does not jeopardize its core and does not completely lose its connection with the organization. The choice of this space should serve especially as a basis for finding people who [in more than one way] represent opportunities.
From people, we return to the temporal metaphor, here to understand their habits and behaviors and how they evolve over time and relate to their business. It is necessary to observe how their pains and loves are transformed.
A peripheral [in the present] and critical opportunity [in the future] emerges, almost always, from changes in the habits and behaviors of people who are around the business [in the present] and will be at the center of it [in the future].
the behavior metaphor
the habit and the opportunity
Finding peripheral opportunities [in the present] and criticism [in the future], as we suggest, involves observation of behavior, it is necessary to be attentive to what is happening to people in the environment and the time of the business.
The first signs of behavior change [in the market] almost never appear among customers of the business itself… but among those who are not [yet] [and perhaps never will be] their customers… and the ones who may end up taking their customers to another supplier.
The median time to establish a new habit is 66 days [min 18, max 254]. There are events on the market [like an innovation, or an epidemic and its consequences] that can lead consumers to test new behaviors for weeks or months. If habits change, the market changes, opportunities change. The big challenge here is time: large groups of consumers changing their habits very quickly and strategic [digital] transformation taking time, longer than the market, time to change the behaviors of the business [already established].
It’s always good to remember that no one controls time of almost nothing. But you have to deal with time in almost everything. And innovation, which is change and behavior, takes time and always involves the [radical] change of the business, from the outside to the inside [what and how to do it] and from the “inside to the inside” [for what and why to do].
© 2020 – 2021 tds.company all rights reserved
This text was written by professors Silvio Meira and André Neves.
[tds.company] is the home of strateegia, a theory of practice for strategic transformation, about which we wrote a long, illustrated sentence, which is available in pdf, at the link [http://bit.ly/TDSCsat]. Our strategic enablement work is done on a digital platform that can be tested for free at the link [http://strateegia.digital].