Decision Making and Transformation

True transformation is rarely accomplished through incrementalism alone. It requires specific resources to be allocated to transformative initiatives and the real trade-off is often between how to balance between supporting the base business and investing in change.

 

Transformation requires more than expending 5% of current employees time on thinking about projects and initiatives to transform an organization. It requires specific people who can fully focus on understanding the benefits, costs, risks and opportunities that transformation can bring, then developing and proposing initiatives into the capital planning process or other budget processes. Then the real tradeoff that executives need to make regards determining which activities are not high priority in the base business so that the resources can be re-allocated to truly game changing initiatives.

 

What I have personally witnessed in many commercial organizations is that the two most difficult things they deal with in the evolution of their businesses is first to have people coming up with good ideas regarding new products and initiatives then making judicious investment decisions to ensure that they continue to innovate. The most destructive thing to many companies is overinvesting in their cash cow and not sufficiently investing in innovation causing them to grow in spurts, fall off cliffs, change personnel and start the process over again. Capital planning in infrastructure, IT, or other key parts of the business is key to maintaining this balance.