Driving transformation in good or bad times
We all know about the funny story of Nasiruddin Hojja and his donkey.
Once Hojja was going through financial difficulty and he was struggling to feed his own family, let alone his donkey. In the first month when he reduced his donkey's feed by 25 per cent, he was surprised to find the donkey showing no major signs of weaknesses.
Impressed by the donkey's resilience, he reduced its feed by another 25 per cent on the second month, observing only some minor difficulties in the animal in carrying goods. Then Hojja decided to further cut down the feeds by another 25 per cent. But this time the hapless donkey dies. The moral of the story - don't drive transformation in your bad time!
At the beginning of this year, I was talking to one of the largest family-run businesses in Bangladesh to get some understanding of their needs or lack of them, to bring about some transformation in their company.
Interestingly, one of its directors explained to me how their company has been growing in leaps and bounds since the independence of Bangladesh, with the profits multiplying and how they have earned a high degree of business repute and social status as a result. Then he went on to add: Why on earth would they want a transformation in the organisation and rock the boat!
My personal learning is that transformation is a continuous process. It works better when business health is good. During good times, if the transformation drive fails for some reason, the company can sustain the pressure just like the shock observer of a car.
Contrarily, if transformation is driven during bad times, the result may be similar to the Hojja story. Any transformation requires time to execute and there is simply no shortcut to it! Any attempts at cutting the corners may cause serious damage to the entire effort.
Statistics indicate that most transformation drives fail, and global companies are also no exceptions. In fact, the rate of failure is as high as 84 per cent if it is a digital transformation, as per Forbes assessments.
According to McKinsey, Boston Consulting Group, KPMG, and Bain & Company, the risk of failure falls somewhere between 70 per cent and 95 per cent. Obviously, the rate of failure is way less in the case of traditional, cultural or business transformation, if it is done with a thorough understanding of the severity of the problems.
In order to make any transformation successful, don't drive transformation by looking at the rear-view mirror, understand the severity of the problems, and focus on the cultural elements of organisations.
Family businesses in Bangladesh are experiencing success with relative ease due to the abundance of economic opportunities in the country at present. However, we should not forget that nothing remains static. There will come a time when our businesses will have depleted these opportunities, which will reach a saturation point.
Moreover, the new generation is emerging with fresh new skills and mindsets, which are significantly different from the current or older generation. It is very important to bridge this gap, and in order to do so, business transformation is unavoidable.
The growing trend of the economic success of Bangladesh depends on the long-term sustainability of the existing businesses, which have the potential to become global players like Walton and Pran.
The author is a telecom and management expert.