‘Transformation’ has become the buzzword over the last decade. Not just that, it has replaced ‘change’ in the business vocabulary. But are the two words the same in meaning and essence?
Before I say a big No, I think it is essential to make a case for both change and transformation and draw out the similarities and differences.
For the sake of an informed argument, let us first look at how each is defined and then call out the parameters on which we can compare the two.
In the dictionary, ‘change’ is described as ‘to substitute or replace something.’ Whereas ‘Transformation’ is defined as ‘a complete change, usually into something with an improved appearance or usefulness.’
These descriptions bring two pictures to my mind; that of a snake and a caterpillar. When a snake sheds its skin, it changes, but when a caterpillar emerges from a pupa and turns into a butterfly, it transforms.
Still, sounds similar?
Understanding the difference today is far more crucial than ever before, especially when enterprises are faced with two of the biggest challenges ever. The first, most unprecedented challenge is that of surviving the pandemic. And the second is of meeting and seizing the opportunity of digital business acceleration.
The sheer magnitude and complexity of these challenges call for a complete shift in how we do things and how we approach them. What has worked so far will not work anymore. With entire industries being reshaped, organizations must rethink their strategy, rebuild their leadership capabilities, reinforce their talent pools, and revamp their culture. That does not sound like a mere change now, does it?
Change can be small and incremental or large and complex. It emanates from the desire to do things differently, to achieve faster, cheaper, and better results. It needs constant monitoring and maintenance. It is limited to changes at the level of process or procedures. These processes and procedures have dedicated owners who continuously measure them against set metrics that point to continuous improvements. It is a short-term response to the market forces and is based on assumptions. It is not significant in impact as it is limited to the internal mechanics of an organization’s functions.
E.g., Security upgrades, ERP software migration, entering new verticals based on past success in similar spaces.
Transformation, however, is almost always significant in its magnitude of impact. It demands a complete shift from what you have been so far and aimed for so far as an organization. The goals are not merely incremental but completely new. Unlike change, which is based on past success stories, transformation is a quantum shift from what you did or were before. The point of reference is from this time on. It is future-looking.
To be able to do something completely different, anew, requires a fundamental evolution. Transformation requires modifying core beliefs and long-term behaviors, sometimes in profound ways, to achieve the desired results. You begin by questioning why you do what you do and the way you do it. It is an inward-facing exercise requiring a complete overhaul of an organization’s makeup, strategy, capability, and culture. Since it alters the organization’s carbon, it has a far-reaching impact on the entire organization and the ecosystem the organization thrives in.
In the wake of the COVID 19 pandemic, companies quickly shifted to a work-from-home model. This was a momentary change in the way they operated. The idea was to go back to the way we worked before, as soon as we overcome the problem at hand. But Slack’s announcement that they are permanently moving to a hybrid workforce model that eliminates the idea of ‘headquarters’ as the heart of its operations in June 2020 is a transformation.
Digital change and digital transformation each have a different focus. While moving to cloud-based project management will deliver efficiency is a change initiative, increasing data performance through migration to the cloud is a transformation. Entering new markets based on historic data is change, but big-data-driven marketing automation is transformation.
In simple terms, when you improve processes and procedures intending to be efficient by upgrading technology, you are undertaking change. But when you leverage technology in every aspect of your business and fundamentally rethink how you work with it and through it, it is a transformation.
It is the intent and magnitude of shift and impact that sets the two apart. And these examples clearly show that: change is a short-term enabler that helps an organization quickly adapt or respond to external factors like trends and shifting demands; transformation, however, redefines what success looks like and how you plan to get there.