The biological model of business transformation offers an instrument of organizational development that combines rationalization (reformulation), with surgery (restructuring), ecology (revitalization) and spirit (renewal)
Reengineering theories seem to be taking hold in the business world and new refinements are being presented every day to Michael Hammer's central thesis, which introduced a revolution in the way of doing business.
This time, reference is made to a new ingredient contributed by Francis Gouillart and James Kelly, in their recent work "Transforming the Organization", whose central thesis is that companies, if they want to maintain or acquire a leadership position, have to transform and not simply, modify their processes or their management. It is the turn of the simple change or transformation, which provides an interesting added value to the thesis on Reengineering: «Placing the change within the cultural context of the company». It is about business transformation, fully considered.
It is considered that to change a company, it is not possible to simply administer individual therapies to physical, human and technological processes and / or resources, without exploring the impact that these measures may have on the rest of the organization. What is sought is to integrate, from a broader perspective, traditionally independent campaigns such as those aimed at improving processes, optimizing the use of technology and modifying the attitude of human resources, using as a vehicle comparing companies with living organisms, under the premise that societies, like living beings, are born, grow, mature, age, get sick, recover and die. Companies, like people, have their own character: some are smarter, some are stronger, others faster and more proactive, etc.In summary, traits that are applicable to people are also applicable to companies.
The business challenge is to maintain a healthy balance in all the components of the organization, within the corporate transformation process, replacing the mechanistic approach with an integral and organic one, which makes the generic features of the company more competitive. The great difference between the modern company and the one formed on the foundations of industrial society is found in the enormous degree of verbal and written interconnectivity of its components; Currently, there is talk of the computer age and lately of the knowledge age. In a bank; for example, timely decision-making is based on the availability of information and customer knowledge. Technology, therefore, must be available to decision makers, not partially,but through applications that allow to fully visualize all the client's businesses.
To demonstrate the thesis; Gouillart and Kelly adopt a model that they call the Biological Model of business transformation, which comprises four main therapies, namely:
- Reformulate the corporate mind Restructure the body of the organization Revitalize the company in the environment it performs Renew the spirit of the firm
Mind, body, environment and corporate spirit are the elements on which the leaders of the companies must work, so that a balanced transformation takes place. Each of the therapies applied to the aforementioned elements is explained below.
1. Reformulate the corporate mind
It is required to gather throughout the organization, the mental energy necessary to fuel the transformation process.
This energy is not achieved by itself, but with the appropriate definition of a corporate vision that gives greater motivation to work and the recognition of parameters that allow us to qualify the new performance of the company. Clear examples of corporate vision are found in Bill Gates (Microsoft Corporation), who predicted that the future of technology lies in software and not him in hardware or in Ted Turner (United States News Network - CNN), who he viewed the news business as global. For this reason, it becomes the task of presidents and managers to ask themselves how they want to see their companies in five to ten years, to communicate that vision to their employees and to recognize the main indicators that allow the performance of the company to be measured, compared to your competition.
The reformulation of corporate thinking and its implementation is a task that comes with risks, when compared to the current development of business; It involves transporting yourself beyond borders, in which the company has traditionally moved. There is the case of firms that decide to enter the international market or those that want to expand their activities by acquiring another company. Certainly, the international market imposes another culture of doing business and operating in another expanded company is not the same as operating in a smaller company. This implies a mental readjustment of the company personnel to materialize this new vision.
Seen from another angle, reformulation is the taking advantage of opportunities that had not been recognized, because nobody had taken the trouble to reconcile the existing values within the company with the opportunities that the market was offering them. Finally, the reformulation should lead to measuring the new results derived from the definition of the new corporate vision. The acquisition of one company by another, should bring benefits in terms of business expansion and cost savings, so that adding one plus one should not be two but slightly more than two; otherwise, the acquisition would not make much sense.
2. Restructure the body of the organization
In human beings there is a clear relationship between the mind and the body, between thought and action. A person can have magnificent ideas that do not materialize, until they are given a dynamic through verbal communication or physical action. Similarly, companies may have their vision defined and employees may have mentally assimilated the process of change; however, the results will not be seen until these thoughts turn into actions.
Organizational restructuring has to do with physical resources (plant, equipment, offices, etc.) and with the procedures applied, to do the tasks and offer the services. Firms that don't care about maintaining their plants can experience what happens to humans when they have scoliosis. Those who do not review their processes may suffer from duplications, cumbersome procedures and paperwork, which could be compared to obesity.
Restructuring must begin with the recognition of the sources of value: the cost that each of the activities represents and the benefits that they report. In a bank; for example, the current account service constitutes an element of value because it provides the resources to be placed among the clientele. The management of these accounts has costs such as reserve requirements, forced investments, ATM salaries, exchange, microfilming, electronic processing, etc. Management's job is to identify which of those accounts represent benefits and which do not.
The next step in a restructuring process is to adapt the physical infrastructure to the strategic objectives of the company. It is a slow and expensive process, just as the skeleton slowly adapts to the needs of the rest of the body.
Finally, the restructuring includes the redesign of the work processes that seek to create substantial improvements in critical aspects such as quality, efficiency, and costs that have been central to Classic Reengineering; they are the muscular system of the organization.
Sometimes it is about confusing Reengineering with transformation. Within the context that the authors point out, Reengineering is the lifeblood of restructuring therapy; which, in turn, is an essential part of the transformation or Bio-Reengineering process, as they catalog it.
Of the four therapies proposed (Reformulation, Restructuring, Renewal and Revitalization), restructuring is the most painful, since it sometimes requires high surgery, cuts in personnel, elimination of unprofitable services, and re-adaptation of tasks.
3. Revitalize the company in the environment in which it operates
Revitalization is understood as the birth and development of a new creature, is to give a new life to the organization through the innovative management of business and the creation of new opportunities for the company. It consists of the interaction of the body with the environment that surrounds it, so that it can grow; Revitalization becomes a post-restructuring stage, assuming that a restructured company will be better able to meet the needs of the market and look through the eyes of its customers. Under these circumstances, the company will migrate from survival to prosperity.
According to the authors, the consequent added value of revitalization is what makes the difference between restructuring and transformation.
The change strategy; it cannot simply stop at Process Reengineering, but extend itself to the opportunities offered by the market. The investment in Reengineering programs is notoriously expensive to amortize it exclusively with the development of the businesses that the company has traditionally carried out. That investment must be capitalized on innovative ideas that provide a sufficient return to recover the investment.
Thus, revitalization therapy links Reengineering with marketing and fostering the leadership of the company to its clients and competitors. Equipped with new energies, the company can offer a unique and differentiated portfolio of products and services, thus preventing them from becoming simple wild cards.
Technological innovation plays a leading role in the revitalization stage, since it is the vehicle that provides information for decision-making. The benefits of technology within the company are innumerable, particularly when these are associated with Reengineering programs. On the other hand, it offers the possibility of making interconnections with suppliers, clients, unions and databases (EDI - Electronic Data Interchange). Technology is compared to the nervous system, since it connects all the components of the corporate organization for the supply of information and decision-making.
4. Renew the spirit of the firm
To complete the biological model of business transformation, we discuss how to optimize the performance of the Human Resource, understanding the company as a spiritual creature and not as a simple provider of goods and services. Without spirituality there can be no transformation.
Renewal therapy begins by designing a program of monetary and non-monetary incentives, turning corporate goals into personal commitments. The "psychological contract" is completed, so called by the pact that the worker must formulate with himself; To make things right, such behavior will provide you with better opportunities within the company. Under this scheme, management commitment is required to properly monitor employee performance, using what might be called a report card.
For its part, the company must provide training and learning opportunities that guarantee an advanced stage of individual renewal. Employees with potential find an enormous incentive in the possibilities that can be offered in education. It is the responsibility of the administration to identify these people and offer programs that allow the individual to develop within the firm.
In summary, the Biological model of business transformation offers an organizational diagnostic tool that combines rationalization "reformulation" with surgery "restructuring", ecology "revitalization" and the spirit "renewal".
Methodologically, I find this tool useful and practical due to its ease of association with biological aspects that are easy to remember and due to its comprehensive approach that combines critical elements for the modern development of organizations.
