In a world of accelerating change, one trait transcends all others: the transformative mindset.
- Today’s successful leaders prioritize three principles: humans@center, technology@speed and innovation@scale.
- Successful leaders understand that investing in an innovation culture overcomes transformation fatigue.
- To plan for an unpredictable future, transformative leaders imagine all possible scenarios and work backward.
With big challenges today and on the horizon, leaders can be forgiven for a short-term focus. How do leaders even think about transforming their businesses when they don’t know which direction to turn?
The trait that is going to make the difference to how your future unfolds is one that is rooted in having a transformative mindset.
Three steps toward a transformational mindset
Regardless of your industry or the current challenges you face, your customers and clients have vastly and permanently altered the way they act — and you must too if you want to thrive.
“A transformative mindset doesn’t define the destination and then hurry toward it. A transformative mindset builds skills, flexibility and agility – encouraging failure along the way – to pivot at any moment.”
— Chang Ho “Hori” Lee
(Deputy Managing Partner, Consulting, Ernst & Young Advisory Pte Ltd Singapore)
The secret is to transform the way you transform – and it all starts with the mindset. Underpinning a transformational mindset are three tangible principles:
Placing humans at center means understanding the characteristics of what makes us human (like our empathy and emotions, our drive to connect, collaborate and socialize) and reimagining the way our companies operate around these human characteristics. Placing humans at the center also means resetting our purpose and strategy to make the world a better place for humanity.
Technology is an ongoing opportunity to transform a business over and over. When competitive advantage is transient, and that’s a given now, investment in technology is not important. What is important is an investment in technology at speed. We are never done with technology investment because none of us can outrun technological disruption.
The biggest challenge for business leaders is not to adopt a transformational mindset themselves – it is to get their entire organization to embrace transformative thinking. The secret is to make innovation everybody’s business and to create a culture where everyone is empowered to experiment. That means learning to tolerate failure and reallocating resources to experimentation. This is how businesses can transcend industry boundaries, redefine the rules and innovate at scale.
Tackling transformation fatigue
It can be easy to confuse the transformative mindset with business transformation. At EY, we often see a genuine desire to transform become a complex technology implementation program. Often the project takes years to implement, by which time technology – and indeed the world – has moved on.
Now, in a year of unprecedented disruption, people are ready for change. But having lived through 30 years of failed business transformations, people are also much more critical of the change process. They are also tired of “innovation theatre”, one-off accelerator programs and central innovation teams that impose their ideas on colleagues who just want to get on with their day jobs.
The best antidote to transformation fatigue is to build an A-team and a company culture focused on innovation. This team is responsible for experimentation, not driving project implementation. This is a clear differentiator underpinned by a very different mindset.
“The best antidote to transformation fatigue is to build an A-team and a company culture focused on innovation.”— Alex Yung
(EY Asia-Pacific Business Transformation and Innovation Leader)
How do you look further ahead when the future is unclear?
Should leaders throw away their three-year plans and SWOT analyses? Is there any point in planning at all?
There is undoubtedly a clear paradox at play. Because the future is so hard to predict, we must look further ahead than ever before. We must imagine all the possible scenarios that may unfold to understand the risks, opportunities and conditions of play that each potential future may offer. At EY, we call this “future-back thinking” and our clients use this to look across three horizons:
- Now: Business-as-usual and protecting the value of core markets and operators.
- Next: Investment in innovation that takes existing capabilities into new markets or optimizes performance with new technology.
- Beyond: Reinventing your industry by creating new markets and new capabilities.
“Once you have a transformative mindset, then transformation is not a process, it’s a way of being. Change is no longer what you do but central to who you are.”
— Philippe Konfino
(EY Oceania Consulting Transformation and Innovation Leader)
In a world where the only certainty is uncertainty, transformation doesn’t start with an idea, a process or even a technological innovation. Transformation starts with a mindset.