Why the Road to Transformation Can Be Surprising, 2040’s Ideas and Innovations Newsletter, Issue 189
Issue 189, December 5, 2024
Transformation is not a straight line. If you’re a sailor, you tack to the future unless you have a full tailwind. If you’re the turtle, you can out-navigate the hare. If you are the architect of your career, you use the career portfolio strategy to build a professional life on your terms. If you are a well-being advisor (think Deepak Chopra), you could redefine the perception of physical, emotional and psychological stress as the resistance to existence; and if you don’t resist existence, you have flow. And if you are a proponent of flow, you know that transformation is not a straight line. It is nuanced, surprising and nonlinear.
Changing the Narrative
We have often written about the virtue of taking a pause, the shortsightedness of short-term gain, and the hazard of subconscious and conscious bias in leadership. The American business imperative is to grow bigger and better than the competition as fast as possible. How you get there is a matter of debate. Linear incremental changes can improve performance step by step; they offer short-term results. Straight-line trajectories of business transformation often miss the subtleties of how to manage business in a digital marketplace. Nonlinear transformations can promise exponential growth and disruption of the status quo. They are exciting and messy, and organizations need the appetite for risk to operate in a nontraditional, sometimes chaotic process.
Nonlinear transformation in mathematics is “allowing for the capture of complex relationships within data, providing better accuracy when dealing with non-linear patterns, and enabling flexible modeling of intricate data structures, particularly when the relationship between variables is not linear.” Linear transformations result in straight lines or planes, nonlinear in curves and surfaces.
To translate mathematics into business theory, nonlinear transformation refers to fundamental, disruptive change in how a business operates, competes, and delivers value. Unlike linear improvements, which focus on optimizing existing systems, nonlinear transformation often involves rethinking the entire business model, implementing cutting-edge technologies, or radically shifting the organizational culture.
Systems thinking is critical in assessing the ability of a modern organizational model to transform. It is taking the outside in view to move beyond an internal perspective. The nuances noted from the outside-in view can be more revealing than the obvious data in revealing new opportunities not only for structuring an organization but also in how to market to customers. For example, nonlinear transformation can be shifting from a traditional retail model to an omnichannel ecommerce platform. Or, pivoting from a product-centric approach to a service-as-a-solution model. Consider how many organizations have moved away from a one-time fee to subscription models (streaming services, cloud-based tools and platforms, periodic or commodity fulfillment).
What is the advantage of nonlinear transformation? Creating a disproportionate value relative to the amount of effort invested, enabling companies to leapfrog competitors and reshape industries.
Full Steam Ahead
Let’s take a look at a case study to get a better grip on why a nonlinear approach may be a better route to transformation. A veteran marketing CEO of his own company, Hal, took on a new client. The client is a niche-media subscription-based business. The niche business subscription business reports on the analysis and strategy of the home furnishings business for industry CEOs. Hal was excited as he knew he would be experimenting with many new tools and approaches.
Hal became an overnight expert in digital marketing tactics and trends by channeling search, GPT4 and media sites. He built a marketing plan based on freshening up the brand and website with a new logo and more cool-edge ways to communicate B2B information. His plan was to pepper the site with short-form videos, conversational commerce offers, links to TikTok and Reels, and animated graphics. His rationale was to build circulation by appealing to younger, media-savvy readers.
The media brand had built a reputation for collaborating with research-based partners to produce annual reports on the industry, which, when communicated, were highly popular based on the high level of report downloads, web-page activity and social interactions. The subscriber base looks forward to the reports and uses the reports for industry intelligence. A product and effort likely to be the major driver in the audience maintaining their subscriptions as the reports were a large part of the business’ value proposition.
Hal wanted to redesign the reports as highly graphical research packages with videos, animated charts, digital imagery and a videogame look and feel. He envisioned the report as a videogame to learn how the research could improve business results. He presented his plan as a finished product, complete with wireframes, sample graphics and videos.
Hal’s whole plan was built on a straight-line pathway to brand transformation. Every aspect of the rebranding was aligned with the “big idea” to modernize the business to gain younger subscribers and expand the audience. And that strategy was a largely superficial exercise in optics without much if any consideration of the current subscriber base. Anyone would admire his creativity at face value.
What Hal overlooked was the reality that current subscribers comprise CEOs with an average age of 55, squarely Gen X, the second-least digitally savvy generation after the boomers. Add to that, important business information presented within a carnival or circus design framework might be viewed by the current subscriber CEOs as frivolous, and even worse, suspicious. The temptation to move forward with all the bells and whistles of cutting-edge, trendy communications was disconnected from the needs and capabilities of the audience who, for the moment, sustain the business’ revenue.
The glitz and glam were adopted by the management team simply because they all thought it was exciting and cool. After the first release of the videogame-like report, 23% of the current subscribers canceled. The subscription department quickly reached out to those customers to learn why they canceled their subscriptions. The consensus feedback: The format of the former reports was easy to use and navigate, giving them the information they needed. The new format was confusing.
If Hal had used a nonlinear analysis, he would have looked at his own research differently, studying the nuances of the audience including digital prowess and how B2B information is best assimilated. He would also have dug into the inner workings of the media brand to ensure that transformation was aligned with its shared purpose and market orientation. Granted this approach is more complex and more work, so fitting the data to prove the original thesis can be too hard to resist. The creative exercise alone to propel a new format is more exciting than doing something that has always been done a certain way.
The process of significantly changing an organization’s construction of its core product does not follow a straight, predictable path, but instead involves fluctuations, unexpected turns, and adjustments along the way, often requiring adaptation to changing circumstances and market dynamics; essentially, it’s not a simple step-by-step process, but rather a dynamic journey with potential for unexpected developments and pivots.
The Dynamic Journey
If you are developing a nonlinear strategy for transformation, there is no set runway. Unlike a linear process, there isn’t a clear, predetermined sequence of steps to follow in a business transformation. This approach requires feedback loops and ongoing monitoring and adjustments to adapt to emerging challenges and opportunities throughout the transformation. Iteration is the defining tactic; experimenting, testing different strategies, and refining approaches prevent a biased outcome.
Transformation does not happen in a vacuum. Market shifts, technological advancements, and customer behavior changes can significantly influence the transformation path. This is a key area that Hal got wrong in his zeal to look like the expert, embrace creativity and innovation, and become the potential hero.
What trips up a nonlinear approach? An organizational culture with a lack of flexibility and agility in response to external factors. Teams that are resistant to change, are motivated by a lack of clear explanation of how their roles may change and how their lives will be improved. Not having backup contingency plans to respond to unexpected obstacles and challenges. An inflexible organizational mindset that does not encourage ongoing learning and improvement throughout the process. And the most obstinate barrier: a change agent that believes everyone thinks the way he or she does.
New Leadership Personas
Rachel Ooi, a business coach writes, “Pivotal leadership and mindset require not just a sound mind but strong emotional intelligence and courage to be constantly adjusting and growing, riding above the storms. Transformation is not an option if you desire presence and significance. And nonlinear human growth is the next transformation.” What supports nonlinear transformation is neuroplasticity, which helps us “unleash our superpowers. We can ease our transformation or growth journey by setting goals and learning new skills — first by visualizing them with our thoughts, believing in them and then nurturing our new habits through practice. It will significantly multiply our efforts when we start learning in action,” adds Ooi.
That may sound like a mouthful of business psychology jargon, but there is truth in the concept that successful transformation calls on an open-minded approach to problem-solving. Hal’s convenient approach was inflexible and unresponsive to outside input. He was still in the command-and-control school of management where “father knows best.”
Organizational leaders are faced with unprecedented disruption and dysfunction in a marketplace that is morphing too quickly. Straight lines in a global marketplace of uncertainty, possible tariffs, new political allegiances and the breakdown of former trade agreements require leaders to become geopolitical, global economics experts, even if their business is not predominantly cross borders.
With a twist on Charles Darwin, it’s not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change. Embracing flow, not resisting existence, and operating holistically understanding the inter-dependence and inter-reliance of economies and organizations is the 2025 pathway to transformation.
Welcome to the ride. We’re here to help!
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