Change agility is the only source of sustainable competitive advantage for your business – Here’s how to enhance it
A company’s only lasting competitive advantage is its ability to change. That’s why it’s not worth outsourcing change management to consultants, reminds Sofigate’s Sami Karkkila.
In decades gone by, running a successful company was like sailing on a tanker in calm weather. Once the course was set, the captain’s most important task was to ensure that the course was maintained and that operational activities ran smoothly. The strategy was reviewed every five years on average, and no major changes were made to the organisation.
Today, we can only dream of calm weather and business management based on a stable routine. Nowadays, strategy is constantly updated and the only thing that is permanent in operational activities is change.
Even so, change is poorly understood. A common misconception, for example, is that a company can change without changing its technology. On the other hand, many companies imagine that a technology change project can be implemented without changing the company in any other way.
Organisational change always affects the systems used by the company, and technological change always affects the capabilities needed by the company and thus its organisation.
Don’t let the valuable lessons of change slip away
There is a strong temptation for companies to outsource the design and implementation of transformation to consultants. Management may think they can speed up the transformation process and save time by bringing in an army of consultants.
The off-the-shelf solutions offered by consultants may be seemingly effective. However, they do not take into account the characteristics and culture of the company and therefore inevitably often lead to less-than-optimal solutions. This also means that the business benefits of transformation are limited.
At least an equally big problem is that by delegating their thinking to consultants, valuable transformation lessons are drained out of the organisation. In practice, therefore, the organisation’s own capacity to adapt to change does not increase at all. We call this important characteristic organic transformational capability, i.e. the company’s own capacity for change. Organic transformational capacity ensures that your organisation is ready for future change and that the lessons learned from change are retained within your organisation.
Instead of an army of consultants, management must be at the wheel of change. Although leading the transformation itself is a bit more work, it yields better results. Instead of standard solutions, a company needs a change partner to guide it through the transformation journey and help it build its own capacity for change.
Even the most successful transformation cannot deliver infinite competitive advantage
The most important lesson, however, is that business transformation is ultimately not about technology, organisation or business models. Ultimately, it is about people.
The more effective a company is at harnessing all its people as part of the change process, the more effective it will be at making change a reality at all levels of the organisation – and the more effective it will be at delivering business value.
In today’s world, change has become the only constant. This is why even the most successful transformation cannot deliver competitive advantage indefinitely. Competitors quickly catch up, and soon it will be time for another transformation.
Competitive advantage is therefore increasingly about an organisation’s own transformational capability. When change is the only permanent thing, the only permanent source of competitive advantage is transformational capability. And the best people to lead a company are those who have the skills to lead transformation.
While leadership should not be outsourced, the transformation journey does not have to be undertaken alone. Sofigate’s Transformation Travel Guide is based on the idea that a successful business transformation process is always driven by building a company’s own transformation capability.
Download the brand new guide here: https://www.sofigate.com/materials/transformation-travel-guide/
Author
Sami Karkkila is the CEO of Sofigate. Sofigate has over 700 employees in the Nordic countries. In the Karkkila blog series, the CEO discusses sustainable growth management in the new, ever-changing reality.
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