Transformation: More than just Change

Transformation is a widely used term, yet it is rarely defined with precision.
My focus is on business transformation – a comprehensive, strategic shift that fundamentally changes organizations. Digital transformation is a key component of this, but only a part of the bigger picture.

However, transformation goes far beyond implementing new technologies: it impacts business models, corporate culture, leadership principles, and, ultimately, the entire value chain.

What drives transformation?
The drivers of transformation are diverse and can be broadly categorized into external and internal factors:

• External drivers: Market changes, new competitors, technological innovations, or societal developments pressure companies to adapt.
• Internal drivers: Shifts in corporate strategy, new leadership, or the realization that existing structures and processes are no longer sustainable for the future.

Transformation is rarely voluntary – it is usually accelerated by a sense of urgency, either from external forces or internal recognition.

Transformation vs. Change: A fundamental difference
Transformation is often equated with change management, but there is a fundamental difference in how change occurs – and what role leadership plays.

Change – A controlled process
Change is a managed process with a relatively straightforward goal and defined parameters. A typical change project follows a linear sequence:

1. Analysis & goal setting: Where are we? Where do we want to go?
2. Planning actions: What steps are needed to achieve the goal?
3. Implementation & support: Leaders drive the process forward, while employees are involved to varying degrees.
4. Completion & stabilization: The new system, process, or structure is established and reinforced.

A change process typically encounters resistance – some people adapt quickly, others hesitate, and some reject the change entirely. However, in the end, the context remains unchanged: an existing system is optimized or further developed but not fundamentally questioned.

Transformation – A shared journey into the unknown
Transformation, on the other hand, is a profound, collective process in which the context often shifts significantly or even completely. At the beginning, there is no predefined end goal, no blueprint, and often not even a clear vision of the final outcome.

• People as experts: Transformation cannot be mandated from the top down. The people within the organization know what works and what doesn’t. They must be actively involved in the process – not as those affected by change, but as co-creators.
  This naturally leads to uncertainty. The expectation that top leadership has a precise plan for what needs to be done is unmet.
• Openness to external impulses: New technologies, societal shifts, or market developments can bring unexpected opportunities and challenges.
• Learning in the process: Transformation cannot be thoroughly planned – it evolves as it progresses. Instead of a rigid strategy, what is needed is a clear direction combined with the ability to respond flexibly to new insights.
• Framework over control: Leaders play a different role in transformation than in change management. Rather than enforcing a fixed plan, their role is to create an environment where teams can develop and test new solutions.

The lines between change and transformation are increasingly blurring. In large projects, both elements often coexist: While some areas of a company can be managed through traditional methods, others require an exploratory, iterative approach. Sometimes, the process starts completely open-ended, and once a direction becomes clear, it continues with agile project management.
What matters most is that leaders understand both approaches and can apply them flexibly depending on the situation.

Methods: Change vs. Transformation

Change methods: Structured transformation with clear control
In change projects, structured project management is essential. Companies rely on proven methods to implement change efficiently and ensure employee engagement. Key methods include:

• Traditional project management (Waterfall model, milestone planning): A linear, predictable implementation of change projects with clearly defined steps.
• Change management models (e.g., Kotter’s 8-Step Model or the ADKAR Method): Structured approaches for involving employees and managing resistance.
• The Change Curve (Kübler-Ross): Helps understand and address emotional reactions to change.

Transformation methods: Exploration and iterative learning
Transformation follows different principles – it cannot simply be planned and executed. Instead, it requires a combination of experimentation, flexible management, and continuous reflection:

• Effectuation approach: Instead of starting with a fixed goal, this method focuses on available resources. New opportunities emerge through iterative actions based on real-world feedback.
• Lean Startup methodology: Small experiments, rapid learning, and continuous adjustments help develop innovative solutions in the transformation process.
• Agile methods (Scrum, Kanban, Design Thinking): Support iterative and collaborative processes to generate new insights and dynamically adjust the approach. While change projects require a relatively stable environment, transformation processes must embrace uncertainty as a natural part of the journey. Leadership in transformation is not about control but about creating a framework for continuous learning and renewal.

Examples of successful corporate transformations
Many large companies have undergone transformations that fundamentally changed their market position:

1. IBM – From hardware manufacturer to IT service provider.
2. Apple – From computer manufacturer to the leading brand for digital ecosystems.
3. Netflix – From DVD rental service to streaming and content production giant.
4. Amazon – From online bookstore to global technology powerhouse.
5. Microsoft – From software vendor to cloud-first company.
6. Siemens – From a traditional industrial corporation to a digital innovation platform.
7. General Motors – From conventional automaker to a key player in e-mobility and autonomous driving.
8. LEGO – From near bankruptcy to an innovation leader in the toy industry.
   These examples demonstrate that transformation is never an easy path – but when companies create the right conditions, it can become a decisive competitive advantage.

Conclusion: Transformation requires courage, leadership, and a learning mindset
Transformation is not a project with a start and end date – it is a continuous process of learning and adaptation. It requires leadership that provides direction without having all the answers.
Those who see transformation not as a problem but as an opportunity lay the foundation for long-term success.