The term minimum viable transformation is borrowed from the well known minimum viable product (MVP) model to help start-ups test their assumptions prior to product launch. MVP is essentially developing a product with just enough functionality for people to start using the product. It forces start-ups, entrepreneurs and organizations to validate their assumptions and pivot their strategy to meet the evolving market demand. Fortunately this model or concept can be extended to fit many other contexts, such as minimum viable strategy, minimum viable experiment, minimum viable transformation etc. Like many other models when used in vertical context, it has the power to transcend normal thinking.
It is often said that "change is the only thing that is constant", as it occurs continuously. Change brings with a certain level of uncertainty, it could be good or painful depending on different circumstances. Ideally real change happens when we're willing to change our mindsets. The words "change" and "transformation" are often used interchangeably, but they mean different things in the context of organizations. There's a continuum along which the notions of change and transformation sit. At one end, change is seen as continuous improvement, evolution, for example introducing new operational practice within a business unit or team. At the other end of the continuum is transformation, a rapid change or innovation, radical departure from current ways of doing things by completely changing the way you do business. Just like digital, innovation and agile, transformation has become a buzzword however when done effectively it could dynamically change the competitive landscape for any organization.
Business dictionary defines "Transformation", in an organizational context, a process of profound and radical change that orients an organization in a new direction and takes it to an entirely different level of effectiveness. Unlike "turnaround" (which implies incremental progress on the same plane) transformation implies a basic change of character and little or no resemblance with the past configuration or structure.
Transformation is how the organization re-imagine and re-invent itself, rather than simply improving its traditional methods or ways of doing business. It involves creating new business models that will eventually disrupt old models, enabling the organization to innovate and change how value is captured, created and delivered. The essential part of transformation is embracing change, subsequently adopting new smart things (transformative digital technologies), new ways of working and adapting these to your context or environment. To name a few transformative digital technologies; Artificial Intelligence (AI), Cloud, Big data, Blockchain etc.
Minimum viable transformation (MVT) is therefore validating your assumptions when adopting new smart things, ways of working and adapting them to fit your strategic context. Essentially having the audacity to pivot your strategy based on the outcome which could either be effective or ineffective.
5 effective ways to foster Minimum Viable Transformation
1. Environmental scanning
Environmental scanning provides holistic view of internal (organization) and external environment through extensive research and thorough analysis on global trends for example technological, societal, economic, demographic and political trends. From a strategy point of view this will enable you to understand market dynamics, review your organization, business unit, department or team's strengths, weaknesses, threats and opportunities (SWOT) in comparison with the industry and competitors.
2. Scenario planning
The key here is to focus on the business value proposition. Are the different scenarios solving customer problems or satisfy customer needs and in what way? using new products / services or digitized solutions. According to Wikipedia (2019) Scenario planning, also called scenario thinking or scenario analysis, is a strategic planning method that some organizations use to make flexible long-term plans. Some people may use ideation, brainstorming etc. to map out their different scenarios or use cases. These approaches can be used to develop your critical assumptions, potential realities about what might happen in the future of the organization. They often takes into account internal and external factors, for instance creating innovative culture, major disruption in the industry, uncertainties etc. Its important to identify whats possible or probable now and in the future, and consider the implications of each assumption and potentially how you can pivot your strategy if certain realities comes to light.
This is the essential piece of the puzzle. Once you've identified the critical assumptions, use cases, hypotheses or potential realities, the next step is actually testing these in the real world. This often requires implementation at a smaller scale and in a controlled environment. From an Information Technology (IT) perspective think of it as a pilot or MVP. Essentially this will enable you to validate your assumptions, approving or rejecting them and then adjusting your strategy appropriately. Research suggests that its best to separate experimentation from business as usual activities. Ultimately creating new ground breaking business models whilst sustaining your existing business model. Gartner defines this as Bimodal IT, the practice of managing two separate but coherent styles of work, one focused on predictability and the other on exploration.
4. Measure and Learn
Define critical success factors and clear key performance indicators for the chosen idea / validated assumption. Obtain regular market or user feedback using quantitative and qualitative research methods. Assess progress and provide continued support appropriately. Keep in mind this is a continuous process of getting better and cultivating innovative culture.
5. Adoption and Change Management
Lasting change or transformation happens when people changes their mindsets and chooses to do something in their best interest thus its important to work towards a shared goal or purpose to benefit everyone. Remember people make things to happen, once the assumptions are validated, as a leader explain why the change or new business model is necessary, communicate the needed information (vision) often and involve people in the transformation journey. This will create a trust surplus across the organization.
As most organizations transforms their business models, this will fundamentally change their current structure, ways of working, for example, moving away from top-down hierarchies to flat structures, more fluid, specialized and often open networks.