“Throw out the last transformation plan — we need a new one.”
How many times have business leaders induced organizational whiplash by reacting to the latest macro trend? Respond to the pandemic. Optimize the supply chain. Develop an AI strategy (now). Don’t forget about ESG.
If transformations have become never-ending — and the vast majority of them fail anyway — has the notion of transformation become obsolete?
Maybe the answer can be found in nature. Darwin wrote of species adaptability, which is by nature evolutionary, not spasmodic, and in harmony with the broader ecosystem. It’s not resiliency. It’s regeneration. Applying the concept to the business world, regenerative transformation is one that more harmoniously links the operations and performance of modern business with the broader ecosystems of the people, places, and organizations within which it operates.
Regenerative businesses that we’ve worked with lead with courage, prioritize action, and view business and society as inextricably connected. When we work with regenerative leaders, our goal is progress toward a long-term vision, not making knee-jerk tweaks. Instead of exploring how they can improve the bottom line, these regenerative leaders work backward and ask: How could we invest in our people to create a long-term impact? How could we work together differently to build a different kind of business? They push past short-term goals (succeeding this quarter) and refocus on long-term sustainability (regenerating for the future and nurturing a sustainable business model).
When you regenerate, you create lasting business value and contribute to a future that works for everyone. This broader and more sustainable long-term success arises because problems are addressed with a holistic mindset.
How to Be Regenerative
In the regenerative businesses that we’ve worked with, leaders understand that transformation is not a one-time special project, and it’s not about a single topic (digital this, sustainability that). Regenerative businesses intertwine all necessary changes into a series of unified actions — or constant adaptation in the same direction. Here’s how they do it.
Become a student of successful change management.
The most successful transformations create intentional change one step at a time. The most regenerative leaders are also the most astute change managers. They create the foundation for change, listen for feedback, and keep improving the way they roll out the next change.
We recently worked with a client that was looking to be more customer-centric and agile. The company’s leaders knew that meant redesigning the way the organization worked. They needed to make big changes for the good of the business, but they wanted those changes to be palatable and sustainable for the teams implementing them.
Because so much was changing (reporting structures, processes, decision-making, responsibilities, etc.), they prioritized the most important changes first. Instead of making sweeping changes throughout the multinational organization, they started by rewiring the most critical processes and clearly communicating those changes. That careful, steady approach helped the business keep running smoothly, with teams who could absorb the changes but not feel overwhelmed with the degree of change.
Once the first wave of changes was successful, they could move to the next set of changes, while preserving the underlying culture that allowed the new processes to stick. This gradual rewiring enabled future changes to be even more successful, as people were aligned with the new ways of working and ready to incorporate more change.
The lesson for organizations: Start small, and when you scale up your findings, apply the important change management lessons you learn along the way.
Re-envision the value chain by asking the right questions.
Supply chains are bursting with opportunities to rethink and regenerate. In fact, 60% of executives say their business needs to do more to operate a regenerative supply chain. The supply chains of the 20th century just aren’t built for the world of today. So, tweaking those old value chains or moving a few distribution centers around isn’t going to cut it for organizations that want to regenerate.
For example, a consumer-packaged goods company was seeing the negative impact of traditional, inflexible value chains. They were struggling to meet profit margin goals and deliver on customer product and service needs.
After analyzing the current state of the company’s value chains, they found a critical disconnect. Because they had a traditional corporate structure where supply chain, manufacturing, customer service, and marketing all operated as separate realms, there weren’t enough conversations happening. Conversations like: What do customers really want from our portfolio? Are we unnecessarily constraining our options because of past decisions? What outdated paradigms could we change? What needs to be true to unlock step-change margin improvement?
Instead, business leaders made functional decisions and “threw requests over the wall” with the hope that supply chain teams would just make it happen.
This siloed approach wasn’t working anymore. Because the challenges were all interlinked, the solutions to unlocking margin had to be holistic and cross-enterprise, too. The company’s solution was to restructure the value chain, creating tight-knit business units around specific products in the portfolio. Instead of farming out operations decisions to a separate supply-chain group, each business unit would more closely own the manufacturing and planning of its products. Because each business unit has agency, control, and visibility into their full end-to-end value chain, they can make decisions faster, understand the impact of their decisions, and stay closer in tune with how products get into the hands of customers.
Even just a few months after the restructuring, leaders are making different decisions and trade-offs because they understand how their planning and execution impact both the customer and the bottom line. The most significant point of insight was understanding how the “right” changes to product, portfolio and customer service unlocked value across the supply chain. Restructuring the organization has led to more collaboration, more insight into how the business works, and more ownership of results.
Regenerative chains will look different from supply chains of the past. But they will lead to higher performance, lower costs, and happier customers. When you embrace the world of possibility and reimagine how businesses could run, new doors open.
Double down on culture.
Of course, building a more regenerative organization isn’t just about reimagining the value chain or changing the tactical approach to your work. Regenerative energy comes from people with a can-do spirit, who will design and craft the lasting changes that regenerate organizations. Culture is an essential element of any major change, and regenerative transformations only work when culture is the driving force. And 57% of executives say they need to do more to create a regenerative culture.
One business we’ve worked with has become incredibly regenerative over the past decade, and a driving factor of that transformation was putting a customer-centric culture at the center of everything. The company’s executives set a clear direction: Customer happiness is the most important business metric for all functions and employees, not just in the service organization. They invested in their customer-facing teams — training, compensation structure, decision-making authority — to reinforce that customer-first culture. And as a result, the company’s net promoter scores have increased by double digits.
To assess whether your culture is regenerative, ask yourself:
- Do your various teams really talk to each other? Do they understand the impact their decisions have on their cross-functional colleagues? Do they know when they are forcing costly changes onto the rest of the business?
- Do your teams have the training and life-long learning mindset needed to upskill? Are your employees being retrained for greater adaptability in light of constant disruption in tech and AI?
- Does the manufacturing group know why procurement is making changes to the supply base? Does product management know how new line extensions will impact production and logistics’ economics? Does manufacturing know how they will respond if the growth of a new product accelerates faster than planned?
- Does everyone know about the customer insights you’re unlocking? Does everyone understand their role in driving a customer-first culture and how that will unlock business performance?
When you build a culture on collaboration and set the expectation that information will be freely shared, people are able to understand, accept, and fuel powerful changes, instead of fearing or rebelling against change. When you change the dialogue from “We can’t do this because…” to “What must be true to achieve this objective?” you unlock the ability to think more broadly, more end to end, and more as truly regenerative business leaders.
The future is full of changes, challenges, and surprises. We cannot plan or de-risk them all. The only way forward? Embrace uncertainty, find positive change from the triggers, and stay flexible and excited about driving evolutionary, more lasting change. When business leaders accept the challenge of building more regenerative businesses with whole-of-problem, whole-of-company mindset, we can leave a positive legacy on our organizations, people, and the world. Let’s regenerate. That’s how we truly transform.
In the context of the Industrial Revolution, applying technology to operating mechanisms in each organization is extremely necessary, and is also an inevitable trend to minimize workload while still ensuring efficiency and enhance its competitive position in the market. Furthermore, applying management software into a business will also help build an organization with a clear system, promoting consistency, transparency and accuracy. Tasken eOffice, researched and built by Opus Solution – a business consultant in Vietnam – is an internal work management system as well as the management of automated, online, user-friendly approval processes, allowing businesses to operate more effectively on the path of digital transformation.
Harvard Business Review
