The Risks and Opportunities of Micro Transformations

More businesses now understand the value of digital transformation and are making plans to embrace it.

According to Flexera, digital transformation is a top priority for 74% of organizations and is now prioritized over cybersecurity (73%) and cloud implementation (65%).

The top three objectives of successful digital transformation plans are improving employee experience and performance, simplifying the employee experience to improve customer service and limiting the number of applications people are using to reduce IT investments, maintenance and upgrades and ease adoption by end users.

According to Google Trends, the number of searches for “digital transformation” steadily increased over the past five years, which made companies embrace the word and use it almost as a motto.

Among other factors that drive a digital transformation plan that will benefit the business, micro-transformations are both a risk and an opportunity for companies.

How Do We Define Micro-Transformations?

Micro-transformations refer to small, targeted organizational or process changes as opposed to organization-wide changes.

These transformations are localized — in terms of scope of work, teams or geography — allowing for quick assessment, implementation, relief and iteration.

Another typical characteristic of micro-transformations is their cost-efficiency. They often require less budget and financial resources.

Examples Of Micro-Transformations In The Digital Workspace

1. The sales team within a company might adopt a CRM software to streamline lead management processes, specifically improving conversion rate and reducing the average sales closure time frame. The other stages of the sales cycle will not be considered.

2. A company might introduce new customer behavior courses to fill in customer service team skill gaps in a rapidly changing e-commerce environment.

3. A small business might extend the scope of their CRM platform to include the accounting department, automating the invoicing process. Invoices are automatically generated from quotes and sales orders.

The companies that typically benefit from micro-transformations include those that have been on their digital transformation journey for quite some time, led by a specific department and small project team, as they will not be disrupting business continuity.

What Are the Risks of Micro-Transformations in a Business Transformation Strategy?

For one, the mini changes might not provide a real competitive advantage to the company as their impact might not be disruptive enough to be appreciated by the industry. A micro-transformation may not produce a significant increase in revenue or return on investment as its deployment will only affect a small portion of the revenue stream, such as launching new offerings for a range of products that contribute to a small part of revenue.

Furthermore, a mini cultural shift might benefit some staff members in their day to day and personally, but will not demonstrate any advantages on collaboration between teams.

Even quick wins might be band aids for specific challenges but will not address the root causes. According to a Forbes study. 84% of businesses implementing quick transformations revert to initial operational challenges within 2 years.

Finally, you might miss the big picture and long-term opportunities. Looking at micro-changes might not serve the long-term strategy and company vision.

What Are the Benefits of Micro-Transformations?

When companies focus on localized areas and start with a pilot, for example, they are more agile and can test new solutions without disrupting the business. With mini transformations, a test and learn approach can be implemented, allowing for more innovation across the board in the long run.

Furthermore, successful micro-transformations can help project teams build momentum. Immediate tangible results demonstrate efficiency to the executive staff and motivate teams for larger scale transformations.

Micro-transformations also consume fewer financial resources and may also allow SMEs to initiate their digital transformation journey. Companies that adopt a series of micro-transformations mitigate risk. According to a KPMG study, 70% of organizations have experienced at least one large transformation project failure in the past year.

If you are not sure between micro-transformations or major digital transformation plans, the first questions might be:

How far is my organization in its digital journey?
What are my objectives?
Where are my pain points and what is their impact on business, people and processes?
What types of financial and human resources can I allocate now and in the future?

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