How do you know your business needs transformation?

How do you know your business needs transformation?

At the heart of successful business transformation is the ability to analyse your company’s current performance – and to interpret the data in a way that enables you to proactively anticipate future market conditions and demands.

Let’s take an example of a notional company that, in 2022 and 2023, was in the top quartile for revenue and EBIT for its particular industry sector. In 2024, its revenue stayed constant, but its market share went down from 35% to 20%.

A straightforward, superficial analysis would conclude that this business is performing just as well, because revenue is stable. A more detailed analysis would highlight the fact that market share has fallen.

The instinctive reaction to such an insight might be to focus on the way the revenue generating side of your business is working. Looking at the market as a whole might tell you what your competitors are doing that is earning them a bigger market share – and your response might be to copy their actions. But this is not the right move because, once your business adjusts in this way, your agile competitors who planned for the future will have moved ahead again.

What you need to do is work out not how to catch up with your competitors but to overtake them so that you recapture your dominant market share in your space.

Expert insight is crucial to inspiring transformation.

Analysing your business performance and implementing the right transformation process is not always a simple process.

Let’s look at another example, of a company with two customers.

Customer One: You invoice them for £100,000 a month and they pay within days.
Customer Two: You invoice them for £10,000 a month and, while they always pay, the money arrives three or four days late each time.

If your first customer’s invoicing drops to £90,000 a month, then £80,000 and then £40,000, and they are now paying later but still within your stated payment terms, which of the two companies is causing you a problem?

A credit control system may show you that the second customer, the late payer, is the problem. A shrewder analysis will tell you that the customer you should be more worried about is the first.

It is important to focus on what is critical to your business. Many organisations pick the easy item – the company paying late. An insightful business owner will make an effort to understand the market conditions that have led to revenue from a customer falling steadily.

Many of us will be familiar with the experience of making suggestions for change that are ignored – until an external adviser suggests doing the same thing, and the action is taken.

It is widely perceived that an independent view can help guide companies through major change initiatives such as Business Transformation

𝗜𝗻 𝗼𝘂𝗿 𝗻𝗲𝘅𝘁 𝗽𝗼𝘀𝘁, 𝘄𝗲 𝘄𝗶𝗹𝗹 𝗱𝗶𝘀𝗰𝘂𝘀𝘀 𝗕𝗮𝗿𝗿𝗶𝗲𝗿𝘀 𝘁𝗼 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗧𝗿𝗮𝗻𝘀𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻

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