Dawgen Global Insights -May /June 2022 Edition

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VOLUME 2 | ISSUE 8 | MAY 2022 - JUNE 2022 | PAGES 34 DAWGEN GLOBAL INSIGHTS

INTRODUCTION TO OUR MONTHLY NEWSLETTERDAWGEN GLOBAL INSIGHTS

Welcome to Dawgen Global and our May 2022 - June 2022 edition of our Monthly Newsletter-Dawgen Global Insights.

This Newsletter has been produced to provide you with an overview of our firm and the wide range of services offered by Dawgen Global entities; whether audit, accounting, tax or advisory services.

Over the past 20 years, I can proudly say that Dawgen has significant experience and expertise that we draw upon, day after day, helping our clients to progress. Our Monthly Newsletter will demonstrate the strength of our firm and the unique and innovative approach we engender.

This is communicated through client case studies on how our team have collaborated to help our clients succeed.

This issue of Dawgen Global Insights focuses on Strategy and Innovation. We explore the Five Stages of Business Growth. This article introduces a framework for entrepreneurs to use when building and navigating their business from a nascent, startup state to an enterprise with a global footprint. This framework is based on the fact that all businesses experience common problems that arise at similar stages in their development.

Familiarity with the Five Stages of Business Growth allows the business owner and business consultant to develop invaluable insights, including:

• Knowing what to focus on at what stage

• Appropriate management style at each stage

• Anticipation of key challenges at various points

• Critical success factors through the company’s progression

• Involvement of owner at various stages

• Evaluation of impact from governmental regulations and policies

We also examine Transformation Journey – Rapid changes in conditions and circumstances can erode our company's market position slowly or quickly. Strategic Drift happens when our company fails to take countermeasures in good times. The result is companies falls from the market carousel. Without delay, companies must embark on a Transformation Journey clearly and consciously even if market signals are not clear. The Transformation Journey framework discusses in this article follows a 5-stage process.

I hope that you will find the information we provide in this Newsletter helpful.

OF CONTENT

Transformation Journey

DAWGEN GLOBAL INSIGHTS I MAY 2022 - JUNE 2022 3
Business
TABLE
04 24 Five Stages of
Growth

Five Stages of Business Growth

This article around small business growth is based on the fact that all businesses experience common problems that arise at similar stages in their development. Familiarity with this concept allows the business owner to attain invaluable insights.

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Executive Summary

framed into 5 Stages

This article introduces a framework for entrepreneurs to use when building and navigating their business from a nascent, startup state to an enterprise with a global footprint. This framework is based on the fact that all businesses experience common problems that arise at similar stages in their development.

Familiarity with the Five Stages of Business Growth allows the business owner and business consultant to develop invaluable insights, including:

Knowing what to focus on at what stage

Appropriate management style at each stage

Anticipation of key challenges at various points

Critical success factors through the company’s progression

Involvement of owner at various stages

Evaluation of impact from governmental regulations and policies

DAWGEN GLOBAL INSIGHTS I MAY 2022 - JUNE 2022 5
All businesses experience common problems that arise in similar stages in their development these patterns can be
can increase your or your client’s chances of building a successful company by understanding
anticipating the
of growth.
You
and
stages

Five Stages of Small Business Growth – Overview

LARGE

• Growth achieved through creativity

• Open to crisis of leadership

• Growth achieved through direction

• Open to crisis of autonomy

Creative founder is unable to provide the kind of leadership needed to move to the next stage—a leader must be found to begin to structure the creative chaos into an enduring business.

The growing complexity of the company and layers of management brings into question: “Who has the authority to make decisions?”

• Growth achieved through delegation

• Open to crisis of control

Delegating decision making can lead to decisions not aligned with the central strategies of the company.

• Growth achieved through coordination

• Open to crisis of bureaucracy

Alignment leads to central policies and procedures that may work against effectiveness of people working closer to the customer.

• Growth achieved through collaboration

• Open to various forms of crises

Size and Complexity SMALL YOUNG Age of Company MATURE

As a company evolves through each stage, it is critical for the owner to know when to give up control and delegate responsibilities.

Source: Churchill & Lewis, The Five Stages of Small Business Growth, Harvard Business Review

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Each stage of growth is characterized by a different impetus to growth and threatened by a different crisis
STAGE I Existence STAGE 2 Survival STAGE 3 Success STAGE 4 Take Off STAGE 5 Resource Maturity

MANAGEMENT STYLE STRATEGIC FOCUS

STAGE I Existence

Direct supervision the owner manages everyone and everything

STAGE I Existence

Existence may experiment with several value propositions & business models

STATE OF SYSTEMS & PROCESS

STAGE I Existence

Minimal to nonexistent most processes are ad hoc & not repeated

Supervised supervision owners becomes more of an administrator

Survival strong focus on cash flow

Functional Maintaining profitable status quo—OR obtaining resources for growth

STAGE II Survival STAGE II Survival STAGE II Survival STAGE III Success STAGE III Success STAGE III Success STAGE IV Take Off STAGE IV Take Off

Minimal systems and processes highly dependent on Excel

Basic repeatable processes begin taking shape, but are not scalable Divisional Growth Developing—systems becoming more refined Line and staff Return on investment

STAGE V Resource Maturity

Maturing consider implementing full ERP system

As each stage requires a different management style, it is common for the management team to also change as the company grows from small to enterprise.

Source: Steinmetz, Critical Stages of Small Business Growth, Business Horizons

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Each stage also requires a different management style, a different strategic focus, and has a different state of systems and processes
Five Stages of Small Business Growth – Defining Characteristics
STAGE IV Take Off
STAGE V Resource Maturity
STAGE V Resource Maturity

In the initial Existence stage, the goal is just to stay alive

Stage I – Existence

OVERVIEW

• “Existence” is the initial stage of a business

• In this stage, the main problems of the business are to obtain customers and to deliver its product service

• It may experiment with a number of different value propositions and business models until it finds a combination that works and gains acceptance by the market

• Companies fail in this stage when they cannot gain sufficient customer acceptance or product capability to become viable

• In some (but rarer) cases, the owner cannot take on the demands of the business in terms of time, finances, and energy, and therefore quits

KEY QUESTIONS & CHALLENGES

• Can we get enough customers, deliver our products, and provide services well enough to become a viable business?

• Can we expand from that one key customer or pilot production process to a much broader sales base?

• Do we have enough money to cover the considerable cash demands of this startup phase?

EXAMPLES

• Newly opened restaurants, retail stores

• Web-based start-ups that are still operating from the bedroom / garage

• Manufacturers that haven’t yet stabilized production or product quality

Direct supervision – owner does everything and directly supervises subordinates

Existence—simply put, the strategy is just to stay alive

MANAGEMENT STYLE STRATEGIC FOCUS ORGANIZATIONAL

STATE

STATE OF SYSTEMS & PROCESSES

Systems and formal planning a minimal to nonexistent Owner performs all the important tasks and is the major contributor of energy, direction, and capital (with assistance from family and friends)

BUSINESS & OWNER

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Owner Owner Business

The focus of businesses in Stage II, Survival, is to optimize cash flow

Stage II – Survival

OVERVIEW

• Reaching this stage demonstrates that the business is a workable business entity

• Its value proposition and business model have been tested—it has customers and satisfies them sufficiently with its products or services to retain them

• The key problem will shift from mere existence to the relationship between revenues and expenses—i.e. cash flow

• Some businesses can stuck in this stage—they earn marginal returns on invested time and capital; eventually, they go out of business when the owner gives up, or retires, or sells it (usually at a slight loss)

KEY QUESTIONS & CHALLENGES

• In the short run, can we generate enough cash to break even and to cover the repair or replacement of our capital assets as needed?

• Minimally, can we generate enough cash flow to stay in business and to finance growth to a size that is sufficiently large, given our industry and market niche, to an economic return on our assets and labor?

EXAMPLES

• “mom and pop” stores (example of businesses stuck in this stage)

MANAGEMENT STYLE

Supervised supervision—limited number of employees supervised by a sales manager or general foreman

STRATEGIC FOCUS ORGANIZATIONAL STATE

Survival—optimize cash flow

STATE OF SYSTEMS & PROCESSES

Systems development is minimal—formal planning consists of cash forecasting, at best Owner is still synonymous with the business

BUSINESS & OWNER

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Owner Owner Business

In Stage III, Success, small business owners

Stage III – Success

OVERVIEW

• At this stage, the owner is running a successful business and has options for growth

• Option A) the owner can expand the business

• Owner takes the cash and the established borrowing power of the company and risks it all to finance the continued growth of the company

• A key activity is to develop managers to meet the needs of the growing business

• Option B) the owner can maintain the business’s success and existing operations, so he can disengage and re-focus his energies on alternate activities (e.g. start a new company, run for political office, pursue a hobby, retire early, etc.)

• The company can stay at this stage indefinitely, providing environmental change does not destroy its market niche or ineffective management reduces its competitive abilities

KEY QUESTIONS & CHALLENGES

• Do I choose Option A) continue to invest and grow the company or Option B) maintain the business and begin to disengage?

EXAMPLES

• The virtual, minimal effort companies advocated by Tim Ferriss in the Four Hour Work Week (example of companies that choose option B in this stage)

MANAGEMENT STYLE

Supervised supervision—limited number of employees supervised by a sales manager or general foreman

STRATEGIC FOCUS ORGANIZATIONAL STATE

Survival—optimize cash flow

STATE OF SYSTEMS & PROCESSES

BUSINESS & OWNER

Option B)

Systems development is minimal—formal planning consists of cash forecasting, at best Option A) Owner

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have an important decision—to risk it all in hopes of great success or to maintain and sustain
Owner Business

The fourth stage of Growth, Take Off, is where a small business grows into a medium or enterprise-size company

Stage IV – Take Off

OVERVIEW

• The focus in this stage is to grow rapidly and finance this rapid growth

• Growth is usually a combination of organic and inorganic (i.e. acquisitions), which may require significant financing

• This is pivotal junction in the company’s life

• If the owner is successful, the company can grow into a big business

• If not, it is usually sold at a profit, assuming the owner recognizes his or her limitations soon enough

• The management team often changes from the previous stage—it takes a different mindset and skill set to be successful in this stage than the previous

• In fact, usually, the original founder/entrepreneur is replaced (voluntarily or involuntarily) by the company’s investors or creditors with someone may experienced in running a larger scale enterprise

KEY QUESTIONS & CHALLENGES

• Can the owner delegate responsibility to others to improve the managerial effectiveness of a fast growing and increasingly complex enterprise?

• Will there be enough cash to satisfy the great demand growth brings (which often requires a willingness of the owner to tolerate a high debt-to-equity ratio)

EXAMPLES

• (2010 examples) Facebook, Zynga

MANAGEMENT STYLE

Divisional—organization is de-centralized, usually in sales or production Growth

STRATEGIC FOCUS ORGANIZATIONAL STATE

Systems are becoming more refined and extensive, both operational and strategic planning are being done and involve specific managers

STATE OF SYSTEMS & PROCESSES BUSINESS & OWNER

Owner Owner Business

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In the final stage of Resource Maturity, businesses have survived the massive growth and must now work on operational and cost efficiencies

Stage V – Resource Maturity

OVERVIEW

• After a stage of tremendous growth, the company needs to now focus on streamlining and integrating operations after the operational inefficiencies brought on through rapid growth

• If the company has gone through a number of acquisitions, will need deploy considerable post-merger integration (PMI) initiatives—e.g. multiple systems integration, shared services, supply chain optimization, strategic sourcing

• Also focus on professionalizing the company by usage of tools like budgets, strategic planning, management by objectives, and standard cost systems

• Owner and company now completely separated—both financially and operationally

• If the company does not maintain its entrepreneurial spirit, it may enter into sixth stage of “Ossification”

• Ossification is characterized by a lack of innovative decision making and the avoidance of risks

KEY QUESTIONS & CHALLENGES

• Can we established shared service centers across our multiple business units (e.g. HR, IT, Finance & Accounting, Customer Service)?

• How do we centralize our IT systems?

• How do continue to innovate and maintain our entrepreneurial drive?

EXAMPLES

• Any established company is an example

MANAGEMENT STYLE

Line and staff—management is de-centralized, adequately staffed, and experienced Return on investment by optimizing operations

STRATEGIC FOCUS ORGANIZATIONAL STATE

STATE OF SYSTEMS & PROCESSES

Systems are extensive and well developed—may consider implementing full Enterprise Resources Planning (ERP) system

BUSINESS & OWNER

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Owner Owner Business
DAWGEN GLOBAL INSIGHTS I MAY 2022 - JUNE 2022 13 Cash is a critical input to success in the beginning stages, as well during the Take Off phase to fuel acquisitions and marketing spend Critical Success Factors – Cash STAGE I Existence STAGE 2 Survival STAGE 3 Success STAGE 4 Take Off STAGE 5 Resource Maturity There is little criticality of cash in Stage III, because the company has a profitable and sustainable business model (for its current scale). Source: Churchill & Lewis, The Five Stages of Small Business Growth, Harvard Business Review Size and Complexity RELEVANT OR NATURALBY-PRODUCT YOUNG Age of Company MATURE CRITICAL TO SUCCESS Cash
14 DAWGEN GLOBAL INSIGHTS I MAY 2022 - JUNE 2022 As the owner grows its business, there is a clear trade-off in critical between the owner’s ability to execute versus his ability to delegate Critical Success Factors – Owner’s Abilities STAGE I Existence STAGE 2 Survival STAGE 3 Success STAGE 4 Take Off STAGE 5 Resource Maturity The owner needs to recognize the need to delegate and relinquish responsibilities to ensure the company’s continued growth. Source: Churchill & Lewis, The Five Stages of Small Business Growth, Harvard Business Review Size and Complexity RELEVANT OR NATURALBY-PRODUCT YOUNG Age of Company MATURE CRITICAL TO SUCCESS Owner’s ability to execute Owner’s ability to delegate
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planning
increasingly important as the company becomes more complex with more offerings, markets served, and scale Critical Success Factors – Strategic Planning STAGE I Existence STAGE 2 Survival STAGE 3 Success STAGE 4 Take Off STAGE 5 Resource Maturity In Stage V, Strategic Planning becomes an integral process and core competency—many companies have dedicated Corporate Strategy divisions at this stage. Source: Churchill & Lewis, The Five Stages of Small Business Growth, Harvard Business Review Size and Complexity RELEVANT OR NATURALBY-PRODUCT YOUNG Age of Company MATURE CRITICAL TO SUCCESS Strategic Planning
Strategic
becomes

Additionally, we have identified 8 key management factors—4 company factors and 4 owner factors

Critical Success Factors – Key Management Factors

COMPANY FACTORS OWNER FACTORS

Financial Resources—including and borrowing power

Personnel Resources—relating to numbers, depth, and quality of people, particularly at the management and staff levels

Systems Resources—in terms of the degree of sophistication of both information, planning, and control systems

Business Resources—including customer relations, market share, supplier relations, manufacturing and distribution processes, technology, and reputation

Owner’s Goals—for himself and for the business

Owner’s Operational Abilities—in doing important jobs, such as marketing, innovation, producing, and managing distribution

Owner’s Managerial Ability—including willingness to delegate responsibility and to manage the activities of others

Owner’s Strategic Abilities—for looking beyond the present and matching the strengths and weaknesses of the company with his goals

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Utilizing this framework, the business owner should adjust resources at each stage to avoid and minimize potential problems

Preparing for and Avoiding Future Problems

At each stage of growth, different skill sets and resources are emphasized. This is why some experienced people from large companies fail to make good as entrepreneurs or managers of small companies—they may be good at delegating, but not good at doing.

Therefore, it is critical for an owner to recognize different sets of needs at each stage of growth. The owner should carefully evaluate the following questions to best prepare and avoid future problems as the organization grows:

• Do I have the ability and diversity of people needed to manage a growing company?

• Do I have now, or will I have shortly, the systems in place to handle the needs of a larger, more diversified company?

• Do I have the inclination and ability to delegate decision making to my managers?

• Do I have enough cash and borrowing power along with the inclination to risk everything to pursue rapid, aggressive growth?

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18 DAWGEN GLOBAL INSIGHTS I MAY 2022 - JUNE 2022 Though it is a long and difficult process to reach Stage 5, there are numerous lucrative exit opportunities along the way Evolution of Small Companies STAGE I Existence STAGE 2 Survival Sell Assets Growth Enter Stage II Go Bankrupt Stuck in Stage II Growth Enter Stage III Sell at a loss Go Bankrupt

STAGE 3 Success

STAGE 4 Take Off

STAGE 5

Resource Maturity

Enter Stage IV

Sell at a profit ($) Drop back to Stage III Drop back to Stage III Go Bankrupt

Growth Enter Stage V Growth Sell at a profit ($) Stuck in Stage III Go Bankrupt

Growth Operate May be triggered from large market change – e.g. disruptive technology

Sell or merge($$$) Drop back to Stage III Drop back to Stage IV

Go Bankrupt

To avoid bankruptcy, companies need to maintain their entrepreneurial culture by continuing to innovate and staying relevant.

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From a shop selling imported coffee beans and

coffeemakers, Starbucks has grown into an international billion dollar company

Case Example – Starbucks

STAGE I Existence

• Started by 3 founders with an initial investment of $9,050 in 1971

• Opened 1 store selling imported coffee beans and coffeemakers (not brewed coffee beverages)

• Modeled coffee shop after Peet’s Coffee & Tea (only 1 store in Berkeley, CA at the time)

STAGE II Survival

• Starbucks was well received and gained favorable press in local papers

• Bought a used coffee roaster from Holland and set up roasting operations in a nearby old building to maintain costs

• Opened a second store in 1972

STAGE III Success

• By early 1980s, Starbucks had 4 stores

• 1 of the cofounders leaves due to burn-out

Note that though the company was profitable by Stage III, during Take Off, for many years, Starbucks was operating at a loss to fund its aggressive retail growth.

Source: Thompson & Strickland, Strategic Management, Starbucks Case Study

STAGE IV Take Off

• Starbucks hires Howard Schulz to expand Starbucks

• In 1984, acquires Peet’s Coffee & Tea and opens first Starbucks to serve coffee

• Raises over $30MM

• By 1992, expands to 161 stores

• Experiences losses during initial growth years, but becomes profitable by 1990

STAGE V Resource Maturity

• IPOs in 1992

• Hires experienced executives

• Institutes many operational improvement initiatives: e.g.

• Employee training

• Centralized buying

• Hub-and-spoke management

• Continues to grow: e.g. JV with PepsiCo, Dreyer’s Ice Cream; corporate mail-order business; int’l stores, music CDs, movies

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Franchises gain a boost through the initial Existence and Survival stages—by leveraging the franchisor’s brand name and market research

Case Example – Franchises

STAGE I Existence & STAGE II Survival

• The franchisee can usually move quickly through Stages I and II assuming the franchisor has done good market analysis and has created a solid product/service offering

• Advantages to the franchisee:

• Marketing plan developed from extensive research

• Standardized and well developed operating procedures

• Existing marketing campaigns and brand name

• Disadvantages to the franchisee:

• Limited growth due to territory restrictions (by the franchisor)

• Dependence on franchisor

• Potential for failure in later stages due to lack of maturing experiences

STAGE III Success

• Profitable and well managed franchise unit

• Steady flow of customers

• At this point, some franchisees decide to diversify into other types of franchises

STAGE IV Take Off

• To expand, the franchise needs to acquire multiple units or territories

STAGE V Resource Maturity

• Develop economies across multiple units/territories

• Leverage buying power with distributors

• Optimize supply chain

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To avoid bankruptcy, companies need to maintain their entrepreneurial culture by continuing to innovate and staying relevant.

Web start-ups rely tremendously on Venture Capital funding to propel through the high growth Take Off stage

Case Example – Web Start-ups

STAGE I Existence STAGE II Survival

• Develop initial site and launch beta release

• Obtain initial customers through grass roots marketing

• Testing market idea with rapid iterative modifications

STAGE III Success

• With a slightly refined product and existing customers, seek out Series A funding

• Funding from Series A to hire first employees to continue product development

• At this point, many web startups have no plans to monetize (which is a big difference from other small businesses)

• Service or product has reached a defining milestone – e.g. reach critical mass, broke sales threshold

• Running low on capital, need to look for Series B continue the momentum in growth thus far or risk going bankrupt

STAGE IV Take Off STAGE V Resource Maturity

• With Series B, fund rapid growth – including massive marketing efforts, acquisitions of younger web start-ups

• Many web start-ups at this point are also looking to be acquired

• Web startup is now a successful

• Considers IPO exit strategy

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To avoid bankruptcy, companies need to maintain their entrepreneurial culture by continuing to innovate and staying relevant.

Transformation Journey

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Utilizing this framework, the business owner should adjust resources at each stage to avoid and minimize potential problems

Article Overview

Rapid changes in conditions and circumstances can erode our company's market position slowly or quickly. Strategic Drift happens when our company fails to take countermeasures in good times. The result is companies falls from the market carousel.

Without delay, companies must embark on a Transformation Journey clearly and consciously even if market signals are not clear.

The Transformation Journey framework discusses in this article follows a 5-stage process: We got into detail with each stage, including the key process steps, relevant tools and measures, and overarching objective/question.

Key to a successful Transformation Journey is having a good understanding of the critical points of leadership—Vision, Culture, and Coaching.

Transformation is our company’s strategic challenge to achieve global survival.

DAWGEN GLOBAL INSIGHTS I MAY 2022 - JUNE 2022 25
Awareness
Ambition Anchoring Arrangement
5 4
Action
1 2 3

Companies must take countermeasures during good times to avert “Strategic Drift”

Strategic Drift

Rapid changes in conditions and circumstances can erode our company's market position slowly or quickly. “Strategic Drift” happens when our company fails to take countermeasures in good times.

As a result, our company falls from the market carousel. Our company has to constantly think about how much change and in what areas our company can—or has to—cope with.

What triggers Strategic Drift? Strategic Drift is triggered by exogenous factors that can threaten market positions.

Without delay, our company must embark upon change clearly and consciously even if market signals are not clear. Our management must accept the challenge and be empowered to transform on its own strength and time.

Transformation used to be an operational assignment. Today, it is our company’s strategic challenge.

Transformation is our company’s strategic challenge to achieve global survival.

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1 Technological breakthroughs triggering major shift in business.
2 New customer requirements due to use of media.
3 Political stipulations with far-reaching effects.

Transformation is imperative when our company’s survival is at risk

5 Stages of the Transformation Journey

Transformation is imperative when our company’s survival is at risk.

Why do we have to change?

There is 5 stage journey that directs our company towards achieving complete Transformation. Our company must go through a continuing process of Transformation to safeguard our company’s survival.

1 It makes our company more agile.

2 It sustainably improves our performance. 3 It keeps our company competitive.

Where do we want to go? How should we structure the change?

How can we implement the concept? What comes after the finish line?

Each stage of the Transformation Journey allows our company to transcend and achieve change.

Source: Mastering the Transformation Journey, Roland Berger, 2015

DAWGEN GLOBAL INSIGHTS I MAY 2022 - JUNE 2022 27
Awareness Ambition
Arrange-ment Action Anchoring

Awareness

28 DAWGEN GLOBAL INSIGHTS I MAY 2022 - JUNE 2022
Awareness: The 1st Stage of the Transformation Journey Awareness, as the first stage of the Transformation Journey, asks the question: Why do we have to change? It is important that our company finds out whether and why we need to change. A systematic assessment of our company can lead us towards having the right answers. 1 Problems must first be clearly identified. 2 A critical assessment of the company’s strategy and business model must be done. 3 We need to examine the industry context and identify relevant trends. 4 Review value proposition based on analysis of competitors and portfolios. 5 Take a close look at internal conditions such as governance, management processes, and the corporate culture. There are various tools and measures our company can use during assessment process. • SWOT Analysis • Portfolio Assessment • Core Competency Analysis • Benchmarking • Ready-Willing-Able Assessment • Voice of the Customer • Organizational Scoring Model • Assessment of Leadership Style Consensus
management
the key challenges lie and what specific objectives are to be targeted is
to build
our company’s concrete direction and vision.
of why our company has to change is essential in Transformation
of
on where
necessary
up

Achieving Transformation requires our company to take action

Action: The 4th Stage of Transformation Journey

Action, the 4th stage of Transformation Journey, answers the question: How can we implement the concept?

Achieving Transformation requires our company to take action.

Time has come for our company to roll out the plan on a large scale.

1 The change process must be in full swing.

1 Change agents must be working flat-out to ingrain change in our corporate culture.

1 Our management and staff must develop new routines within the new structures and processes that surround them.

Transformation must be uppermost in our people’s mind. Our company can achieve this by realizing quick wins and communicating them emphatically to our people.

Life must now be breathed into our Transformation plan. Our people must be convinced that our company will make it and that the Transformation is going to be a success.

Successful Transformation is achieved if trust and commitment is build among the parties involved in our company -- this is crucial.

Various tools can be used to successfully achieve our 4th stage of Transformation

• Competency Transfer Matrix

• Competency Skill Mapping

• Q&A Tracker (for internal communication measures)

• Strategic Positioning and Operational Alignment (throughout the Employee Lifecycle)

DAWGEN GLOBAL INSIGHTS I MAY 2022 - JUNE 2022 29

What comes after Transformation?

Transformation!

Anchoring: The 5th Stage of Transformation Journey

What comes after Transformation? Transformation! Thus, the 5th stage of the Transformation Journey answers the question, What comes after the finish line?

Anchoring ensures that there is continuous process of change and Transformation.

In 5th stage, our company must evaluate what we have achieved. 1 The efficiency and effectiveness of the new processes and structures.

Estimate the financial impact.

Identify rooms for improvements. 4 Identify "Transformation champions" and continue to deploy them at critical points in the organization.

Transformation is an on-going process. Our people must accept this modus operandi if initial successes are to be sustained. Our company must be flexible and agile.

Various tools can guide our company to sustainably achieve Transformation.

• Continuous Improvement Tools

• Cultural Audit

• Customer Survey

• Temperature Check

• Leadership Coaching

Transformation never reaches a defined end point -- it is a permanent, ongoing process.

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2
3
DAWGEN GLOBAL INSIGHTS I MAY 2022 - JUNE 2022 31 Key to a successful Transformation Journey is to finds ways to improve the organization’s “energy to change” Catalysts of Successful Transformation – Energy to Change Building and maintaining “energy to change” is a cascading process that starts at the top of the organization and trickles downwards. Below, we have outlined examples of ways to boost and remove restraints on energy to change. Ways to boost Energy-to-Change Main restraints on Energy-to-Change Ways to release restraints on Energy-to-Change Results Uncertainty Reassurance Recognition Unclear framework Structured program Team spirit Resistance Transformation fans Source: Strategic Business Transformation, Roland Berger, 2015

Key to a successful Transformation

Journey is understanding critical points of leadership—Vision, Culture, and Coaching

Anchoring: The 5th Stage of Transformation Journey

For a successful Transformation Journey, we need Vision, Culture, and Coaching. We must foremost have the Vision to create the Culture that will lead to successful Transformation

Vision

Vision as the most important factor in the whole Transformation Journey.

• Formulating a vision takes time. Our company must allow the vision to evolve and be patient.

• Our company must allow others to co-own the vision by taking part in the development process, and make sure that the vision authentically reflects our organization's DNA.

Culture

Culture is a powerful enabler to Transformation.

• Culture is only a powerful enabler if we tackle organizational behaviors at the roots.

• Our company wants to achieve several competency goals during Transformation.

• Building networks instead of following hierarchies.

• Enabling co-creation instead of silo thinking.

• Thinking in terms of solutions rather than product.

• To achieve these goals, our company must have a structured approach that will dig deeper and determine underlying preconditions that are necessary.

We must convince people that risk-taking, collaboration, disruption and speed are important elements in reaching our overall goals.

32 DAWGEN GLOBAL INSIGHTS I MAY 2022 - JUNE 2022

Making others part of the change early on allows for a smooth Transformation

Catalysts of Successful Transformation – Coaching

Making others part of the change early on allows for a smooth Transformation. This involves the coaching of our employees.

Coaching

Coaching is essential in catalyzing a successful Transformation.

• Our employees must be empowered to embark on the Transformation Journey. Our employees must be motivated to sustain our efforts and be passionate in realizing our company’s dream.

• Nothing poses a greater threat to success than a creeping sense that the task is too complex and the challenge too great.

• But, those who see the goal and set out with the right equipment in their backpack can certainly make it to the next level.

Transformation is hard work but with the clear vision and the right people, our company will achieve our goal.

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DAWGEN GLOBAL INSIGHTS I MAY 2022 - JUNE 2022

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