A new report by Gateley Plc has revealed what company bosses across the UK think about business transformation.
Sophie Brookes, corporate partner, looks at the findings of the ‘How UK businesses can successfully transform’ report in more detail.
At a time of political and economic flux, both at home and abroad, businesses in the UK are facing uncertain times. It is during these times that the ability to successfully manage change within a business becomes all the more important.
To gain a better understanding of how companies are transforming and the specific challenges they face in implementing change, we commissioned a special report that lifts the lid on these and other important business issues.
Among the themes explored in the report are:
– Improving the behaviours of companies
– Setting strategic priorities
– Achieving growth
– Facing the future
– Transforming ways of working
– Breaking down the barriers to change
– Support in successfully executing business transformation
Setting strategic priorities
Defining the right strategy is often the most difficult step when starting out on the path of business transformation. Our survey explored what strategic priorities companies are setting over the short and medium term.
Unsurprisingly, sales growth and profitability are the top priorities for businesses, both over the next 12 months and a longer three year period, with around half of companies citing these as strategic imperatives. When asked how strategic priorities are set, referencing the company’s ‘purpose, mission and vision’ was the most common response, followed by ‘in an agile and highly responsive way’. The ability to respond quickly represents good practice given the rapid rate of change within many markets and companies.
The nature and scale of transformation that is required within a company is often heavily influenced by the commercial and financial situation a company is in at any given time. For example, the company can be on a robust growth path but decide that a ‘proactive transformation’ can deliver even stronger and faster growth. Alternatively, the company may have already witnessed a levelling off in performance and therefore needs to deliver a ‘reactive transformation’ or has experienced a sharp decline in performance that it needs to address by a ‘remedial transformation’.
Whatever the situation, whether growth is strong, weak or a distant memory, it always pays to refocus on the market you are serving. Crucially, identify what changes are necessary to support, sustain, maintain or re-attain growth.
Facing the future
Our report identifies that ‘fast transformers’ have the most bullish outlook. Forty-four per cent of those companies who think they are transforming faster than the average in their fast moving sector believe they will grow a lot faster than their sector over the next three years.
This positive outlook may, in part, be down to a generally more optimistic frame of mind. However, companies that are changing more slowly than the average for their sector need to identify what they can do to address this. For example, outsourcing some processes or parts of the operation may free up more management time to focus on strategic priorities or core aspects of the business.
Transforming ways of working
One of the most interesting findings in the report is the emphasis companies are placing on investment in people, over and above investment areas such as land, buildings and premises, marketing, technology, and research and development.
Thirty-five per cent of respondents said people was their primary focus of strategic investment in 2016. However, businesses are still finding it difficult to recruit the right people for the job, with ‘filling job vacancies’ and ‘staff retention’ cited as two of the main barriers to implementing strategic priorities.
Breaking down barriers to change
When it comes to change within a business there will always be barriers to overcome, whether they’re psychological or physical, internal or external.
The results of our survey confirmed that business leaders encounter practical, cultural and structural barriers when trying to implement change within their organisations. Being too risk averse and ‘not having the right cultural mind-set’ were two of the most commonly cited ‘soft’ barriers, while ‘cost/budget constraints’ and ‘inadequate resources’ were the biggest barriers overall.
When asked to rate the likely impact of a range of external factors that could affect the performance of their business and potentially their transformation plans over the next three years, increased regulation came out as the top concern. Potential interest rate rises and a downturn in emerging markets were also high on the list of concerns.
Who to turn to for advice?
If you are thinking about transforming your business, there are a number of professional advisors who you can turn to for support and guidance. Business mentors, accountants, management consultants, law firms, and investors and shareholders were all favoured by more than one in ten survey participants.
Encouragingly from our perspective, 69 per cent of respondents said that they were ‘very likely’ (33 per cent) or ‘extremely likely’ (36 per cent) to recommend the company’s primary law firm as an external advisor.
As a full service national law firm, we can assist companies in successfully avoiding the perils and pitfalls that we have seen other businesses succumb to. By applying our learning from turnarounds and business failures, we can avert problems ever arising.
For further information on how we can help your business contact Dan French, Partner, Corporate Recovery, on 0121 212 7722 or email: firstname.lastname@example.org
To download a copy of the full ‘How UK businesses can successfully transform’ report, go to www.gateleyplc.com/transform