Business Value in Transformation is Driven by These “Big Rocks” . . .
70% of successful value creation from digital or AI-enabled transformation is down to people and end-to-end process.
This 70% represents our biggest priority.
Value Creation = P&L and Working Capital Impact.
This was the catalyst for “Breaking Out of Silo-Thinking to Accelerate Enterprise Value Creation”.
I remember reading the classic “7 Habits of Highly Effective People” by Stephen Covey, a genuinely insightful book on productivity and effectiveness.
He introduced the metaphor of “Big Rocks” as our Priorities.
The famous story illustrated how to prioritize by filling a jar with big rocks. He then showed that it can be further filled with pebbles that trickle in around the big rocks. And again, with sand and water.
The message was never that we can cram more into every single day, but that unless we start with the big rocks, there’s no room for them.
“If you don’t put the big rocks in first, you’ll never get them in at all.”
And, so it is with driving genuine Enterprise P&L and Working Capital Impact.
Boston Consulting Group (BCG), having researched success in Digital and AI-enabled Transformation, concluded that most AI value comes from people and process. Specifically, they attribute success to these factors by impact;
- 10% Algorithms
- 20% Tech and Data
- 70% People and Process
The Priority, the “Big Rock”, is the 70%.
People and Process.
- “People” is not just about effort, but Mindset, Motivation, Urgency, Collaboration and Critical Thinking.
- “Process” is not just about workflows, but the genuine “raison d’etre” business cycles, the “end-to-end” processes driving revenue, product, customers, service, supply chain, people and so on . .
As with Stephen Covey’s “Big Rocks” story, this is not just about understanding the facts, but recognising the need for a mindset change.
- We need to start with “WHY” – What business problem are we trying to solve?
- “Zoom Out” to understand the end-to-end process, or value-stream.
- Change the perspective, look “Outside-In” and “Think like a CFO”.
- Recognise the 4 levers of business value.
- Establish “What Does GOOD Look Like”.
- Consider the human WIIFM motivator (What’s In It For Me).
- Undertand and strengthen the Data Foundations.
- Combine Innovation with Simplicity (Customer Experience).
- Develop the “Execution Muscle” – XQ
These themes and others are discussed in our paper “Breaking Out of Silo-Thinking to Accelerate Enterprise Value Creation”.
A focus on the fundamental, “end to end”, “start to finish” core processes is the value driver that fuels genuine enterprise impact.
Business transformation and true value creation do not happen in silos.
Further, there are “Big Wins” in identifying and capturing the value leakage (revenue, cost and cash) that lives in the shadows and gaps between the silos.
Up to 10% of incremental EBIT just hidden in the shadows!
To achieve success, there is a need for a new mindset as well as new capabilities, skills and habits that need socializing, developing, nurturing and reinforcing.
“If you don’t put the end-to-end process first, you’ll never create genuine enterprise value from transformation at all.”
You can read “What Are Your Big Rocks?” by Mark Nevins in Forbes here . .
If you haven’t read Stephen Covey’s “7 Habits of Highly Effective People”, you can get it here . . .
70% of Business Value in Transformation is Driven by These “Big Rocks” . . .
Thanks for reading . . .