3 Transformation Principles for Reimagining Enterprise Growth

Driven by an uncertain economy and an increasingly complex business landscape, many organizations are re-imagining their growth strategy with transformation at the center. Transformation often involves multiple objectives simultaneously executed, such as focusing on enabling a leaner operational enterprise while modernizing technological platforms. Objectives may not be mutually exclusive, as most enterprise transformations include many aspects of growth, operations, and technology.

According to a Deloitte Global Chief Transformation Officer Survey, respondents say restructuring for growth is a top reason for transformation, along with pursuing digital technology opportunities and achieving operational efficiencies. In Deloitte’s 2023 Chief Strategy Officer Survey, responding organizations say they plan to increase their growth investment in transformational change to develop novel products, services, and business models.

Business transformation isn’t solely about being additive. It often requires an assessment of existing processes, breaking them down, and building back up to a state for a differentiated path to growth. Organizations that achieve this may see significant, even explosive, growth in bottom-line results such as profits or earnings per share. Having a transformation mindset can help enterprises develop a capability of effective, continual change, preparing them to respond to disruption.

As an example of transformation at scale, leaders at a global investment management firm decided to rethink the organization’s operating model, refreshing its approach to enabling investment management while also facilitating compliance monitoring. The complex undertaking involved developing a new vision for what kinds of activities, responsibilities, and accountabilities the model would define.

The investment management firm implemented a new model that clarified roles and responsibilities across functions and distributed work globally, which reduced duplication and staffing costs while providing streamlined, auditable information on a global scale to improve processes.

3 Transformation Principles

C-suite leaders who pursue business transformation to help drive differentiated growth during a time of economic uncertainty can be mindful of three important principles.

Focus on strategy as a North Star. Senior executives have a long list of priorities that tug at their attention daily. A Deloitte survey of C-suite leaders finds more than 60% of responding executives named seven core business priorities from a list of 10 choices as their primary areas of focus, and one-fourth of executives selected all 10. When these same executives were asked what they would likely prioritize three years into the future, nearly one-third selected all 10.

As uncertainty and volatility become a new normal for organizations on many fronts—the economy, workforce, environment, technology, geopolitical landscape, among others—C-suite leaders can consider focusing on their own organization’s long-term strategy as their North Star, maintaining alignment and transparent communication between themselves and the board as they make critical decisions on day-to-day matters.

Hewlett Packard Enterprise (HPE), for example, is focused on being a strategic partner to its customers to help solve pressing challenges from edge to cloud. Purposeful transformation often begins with a catalyst for change that can be as major as a business model transformation, like HPE’s own evolution to an as-a-service company, or as tactical as revisiting its go-to-market model to find new pathways for growth in the channel.

Cultivate a high-performing, collaborative team culture. Substantial business transformation often requires effective teamwork and collaboration across the enterprise.

Fostering a high-performing team often requires leaders to invest the time to engage with people on an individual level, seeking their skills and treating them as valued members of the team whose insights and ideas deserve to be heard. It can also require leaders to enable people by being clear about what success looks like and creating an environment in which they can succeed. Leaders can focus on encouraging team members to learn from one another, celebrate their wins, and frame their losses as opportunities to learn and grow.

According to a survey, 42% of C-suite leaders in high-performing teams say they are more effective at managing complex initiatives. It’s important for leaders to provide their teams with clear objectives predicated on the transformation strategy and straightforward to execute, with milestones and metrics for measuring success as transformation unfolds. They should also provide their teams with some autonomy to help identify solutions along the way. A teaming culture that gives people confidence to push outside their comfort zones can be critical.

Siloed decision-making focused on isolated or narrow issues can conflict with a culture of teamwork and enterprisewide collaboration. A global car manufacturer looked to bridge gaps between business and technology teams with an Agile transformation. The result is a more product-centric operating model. The shift has improved employee engagement, client satisfaction, and time to market.

Optimize investment portfolios. It might be tempting for leaders sensing uncertainty or a coming downturn to pull back on investments and focus on cutting costs to protect profitability. Visionary leaders, however, often understand the importance of using periods of uncertainty or disruption to shift investments for optimization, not eliminate them.

More than one-third of CFOs who participated in Deloitte’s second-quarter 2023 CFO Signals™ survey indicate their CEOs want them to focus on strategy and transformation, performance management, revenue growth, investment, and capital financing. In Deloitte’s third-quarter 2023 CFO Signals™ report, 35% of responding CFOs indicate that capabilities to manage transformations, whether enterprisewide or specific to finance, require greater investment.

For some organizations, an ability to achieve transformation depends on an ability to maintain an appropriate balance between long-term growth strategy and near-term cost reductions. This scenario requires leaders to understand when it may be necessary to make trade-offs, perhaps by pausing or postponing initiatives.

Leaders likely can’t invest in everything they identify as critical, so they can instead consider focusing on creating guidelines for assessing when a company should shift its investment strategies. They should also allow for constructive debate and dissent over investment strategies to allow for diverse points of view to be aired and considered.

At Celanese, digital transformation combined with the integration of two major acquisitions required transformation at scale and speed, says Sameer Purao, a senior vice president and the global CIO. Ensuring adequate investment was critical but challenging. “Transformation should have a really good return on investment,” he says.

The company developed an investment strategy underpinned by a self-funding model, where initial investments can start creating value in incremental amounts, which can help fund further investments. “Eventually, there’s a point where the value created is greater than what’s needed for the next investment in a particular initiative,” Purao says.

In an era of continual disruption, a challenge before C-suite leaders is to establish an organizational culture of adaptability, resilience, and comfort with change. A transformation approach that is equal parts disciplined and agile and is driven by these three principles can help organizations weather uncertainty and volatility.

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