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Total Enterprise Reinvention

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Total Enterprise Reinvention

The pandemic and unprecedented challenges of the past three years have tested CEOs and their leadership teams. Post-pandemic, most leadership teams of large companies are rising to the occasion, transforming more than ever before, faster than ever before—which we call “compressed transformation”—and accepting that all strategies lead to more technology. We call these companies the “Transformers.”

A handful of companies are quietly and systematically changing the game and their industries, driving a new imperative. These are the “Reinventors,” building on their experience as Transformers to embrace what we call “Total Enterprise Reinvention.”

Our research shows only 8% of companies are moving to adopt a strategy of Total Enterprise Reinvention. Most companies—86%—are Transformers. They focus on transforming parts of their business rather than the whole and tend to treat transformation as a finite program rather than a continuous process. Many, though, are beginning to recognize the importance of establishing a new performance frontier—just under half of Transformers (43%). In fact, this group says they aspire to set a new level of performance in their industry through their transformation programs. These “Aspirational Transformers” are best primed to become Reinventors. Six percent of organizations are what we call “Optimizers”, focused on functional transformations limited in scope and ambition. Technology is not a significant enabler of their transformations.


The time is now

Total Enterprise Reinvention isn’t a to do; it’s a to be. It requires continuous, dynamic reinvention. It becomes a unifying force across the C-suite and every function and business area, because, by definition, all are involved and accountable for its success. It demands an outside-in perspective that connects what’s happening at the company with what’s happening in the world. And it requires new skills and an increased depth of understanding of technology, change management, communication and how to leverage partners to achieve results faster.

Companies adopting Total Enterprise Reinvention exhibit six characteristics:

  1. Reinvention is the strategy. It is no longer an execution lever.
  2. The digital core becomes a primary source of competitive advantage. It leverages the power of cloud, data and AI through an interoperable set of systems across the enterprise that allows for rapid development of new capabilities.
  3. Reinvention goes beyond benchmarks, embracing the art of the possible. Technology and new ways of working create a new performance frontier.
  4. Talent strategy and people impact are central to the Reinvention, not an afterthought. These companies consider change management a core competency.
  5. Reinvention is boundaryless and breaks down organizational silos. It tackles capabilities end-to-end.
  6. Reinvention is continuous. It is no longer a time-defined one-off, but a capability continuously tapped by the organization.


Setting a new performance frontier

By embracing Total Enterprise Reinvention, companies will establish a new performance frontier. Our research shows Total Enterprise Reinvention drives clear and significant outcomes for Reinventors.

Financial impact: Reinventors report higher incremental revenue growth, higher cost-reduction improvements and higher balance-sheet improvements.

Technology speed to results: 66% of Reinventors say the delivery of their reinvention strategy is happening significantly faster relative to past transformations.

360° value: 76% of Reinventors say setting non-financial targets is very important, compared with 32% for Transformers and 10% for Optimizers.


Becoming a Reinventor

We believe all companies will need to adopt Total Enterprise Reinvention as a strategy in the coming years. Here are four categories of questions to help shape a path forward.

1. Ambition and strategy

  • Where are you today: are you a Reinventor, Transformer or Optimizer?
  • Have you defined the performance frontier for your company, and how does it measure against the best in your industry and the best in other relevant industries? Are you matching the leaders or setting the new benchmark?
  • Is your entire C-suite held accountable, as a primary metric, for the success of your current transformation programs, or is the business or function lead primarily accountable?

2. Talent

  • Do leaders have sufficient technology acumen to understand the art of the possible and what it can do to drive reinvention?
  • Do you have existing change management capabilities to support your continuous transformation journey, or are you standing these up for each transformation project?
  • Do you use data to measure your transformation, and is the same form of measurement used for all programs?

3. Digital Core

  • How would you assess your digital core? What is its level of maturity and what are its known gaps?
  • Is the ability to use technology investments to achieve sustainability and other 360° value objectives and any negative impacts formally included in technology investment decisions?

4. Transformation initiatives currently underway

  • Are the leaders of your current transformation initiatives able to articulate the changes that will occur across the enterprise, and are they using metrics that take a cross-functional view?
  • Can your leaders articulate the partnership strategy for each transformation program, how that strategy is enabling them to deliver outcomes faster and increase certainty of outcomes, as well as how the partner fits into your talent strategy?

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