So, is it any wonder 22% of UK CEOs believe their organisation will not be economically viable within a decade on its current course?
Transformation has been a natural response to the challenge. It often focuses on updating technologies and processes in functional areas such as finance, HR or the customer office. Too often the bigger picture is absent, with multiple simultaneous enterprise ‘transformations’ happening at once without joining up. Yet, business leaders are challenged with a need for speed and more efficient ways to transform. They need transformational interventions that drive exponential impact on their business.
A new kind of enterprise
The answer lies in a new kind of enterprise: one that is designed to constantly transform so you can thrive as well as survive. To succeed, a transforming enterprise must be; sustainable, tech-powered, skills-led, agile and connected to its people, customers and communities.
So, what does this mean in practice?
Sustainable
Sustainability needs to be at the top of the enterprise agenda as it goes to the heart of purpose, impact and how an organisation engages with its stakeholders and broader society.
69% of investors in the Global Investor Survey 2022 highlight the importance of companies reporting sustainability to the company’s business model, going beyond compliance and reporting to make sustainability a competitive advantage. To fill the net zero leadership gap organisations also need to prioritise a move away from solving technical problems to embracing adaptive change which will enable transformation at pace.
Tech-powered
The pace of technology change is exponential and accelerating, and leaders must prioritise investments in advanced technologies from generative AI to advanced data and cloud enabled platforms. But, approaching technology transformation at a core functional level in areas like HR, finance or sales is suboptimal. To unlock the transformative business performance of cloud requires a holistic, enterprise-wide approach to cloud strategy integrating mission critical applications, data at scale and new ways of working.
Our recent EMEA cloud business survey highlights the value of this as 83% of cloud-powered businesses have increased revenue over the last six to nine months. Perhaps unsurprisingly, the vast majority of businesses (86%) are not currently all-in on cloud but 73% of them say that they’ll have all their operations in the cloud within two years.
Success requires active engagement from the C-suite and an acknowledgement that being tech-powered is not just a technology issue, it’s an enterprise-wide effort with benefits to match.
Skills-led
A skills revolution is impacting every organisation. Transformations that focus on new processes and technology without skills reinvention risk siloed working practices and ineffective operating models. As new generations enter the workforce, organisations are managing differing people's expectations, changing working patterns and integrating new demands. Additionally the shortage of specific talent and skills exacerbates this challenge, which can - and will - only be met by putting people at the centre of transformation and ensuring that the evolving needs of both the business and its people are met.
Organisations still have a long way to go. Often business models are not being redesigned to explain cross business new workflows and service models and the associated workforce skills transformation. People only being included in a transformation journey simply to train them to use new technology or adopt new processes is hugely inefficient. People must be involved from the start as part of a new operating model that forms the foundation of enterprise transformation. One that promotes the adoption of skills and collaboration rather than roles and hierarchies.
In the UK Workforce Hopes and Fears Survey 2023, employees ranked human skills such as critical thinking and collaboration as more important to their future careers than technical, analytical or digital skills. 69% of employees see adaptability and flexibility as future premium skills, indicating that employees are ready to embrace change as an integral part of transformation.
This is where the true value lies. People form the crucial link between strategy and delivery and, too often, businesses fail to capitalise. By taking a human, skills-led approach to transformation, the transforming enterprise ensures it can address this disparity.
Agile
Agile software development has become synonymous with technology transformation across organisations of all sizes. The transforming enterprise takes this a step further as part of a broader operating model and leadership approach to create more flexible product or service-focused teams to deliver value and adapt to business priorities. People need to work in entirely new networks that foster greater agility in the enterprise overall, but also makes the technology-powered and skills-led characteristics of success more likely to take root.
Connected
Collaborating with diverse groups including competitors, governments and academic institutions is key for creating business value and addressing societal issues. In our PwC global CEO survey, 20% of CEOs say their company is collaborating with entrepreneurs or start-ups to do this. This is not just limited to external ecosystems, but also connectedness with customers and colleagues through real-time communications and feedback that influences decision-making. A connected enterprise is one that operates against a clear common purpose and culture: one that unites people around the ‘why’ they are in business and ‘who’ they are.
How do you become a transforming enterprise?
Enterprise transformation offers a chance to look at the business in its entirety. It provides a challenging, but exciting, opportunity to reassess strategic direction, build resilience and embed ESG values and people at its very core.
Focusing on creating a sustainable, tech-powered, skills-led, agile and connected enterprise is key. It is not an end-state, but rather a set of characteristics for success that apply to all industries whether financial services, government or private enterprises that increasingly operate in a context of permanent crisis. Embedding these characteristics into the value case, operating model and transformation approach will enable businesses to survive. But, to thrive businesses must harness the opportunities offered by constant change rather than trying to control them.
