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On my blog, I have already discussed in detail the benefits and challenges of a business transformation. But when does a business transformation become necessary? What are the critical issues that make transformation the only choice? I will explore these questions and more in this article.


When a business transformation becomes necessary is decided by the pain point

Without urgency, change will not prevail. The starting point for a business transformation is therefore the need for change and its painful realisation. Only when this is given can a business transformation become promising.

But what factors contribute to the need for transformation? What pain points can arise in companies that make a transformation inevitable? I would like to answer these questions based on seven reasons.


7 reasons why business transformation is necessary

In the following, I will give you the main reasons that speak for a transformation. One quote, which you may be all too familiar with, sums it up: “No pain, no gain”. The quote, which was made famous by Arnold Schwarzenegger in the seventies, does not only apply to sports. It also applies to all other areas of life, first: entrepreneurship. And here especially in the transformation of a company. Because only when there is pain can there be profit. Let’s now look at the individual areas that clearly answer the question: when does a business transformation become necessary.


Reason No. 1: The needs of customers and employees change

What is currently in demand can change completely in six months or a year. The saying: If you don’t move with the times, you move with the times, hits the nail on the head. Every company has to restructure itself occasionally and adapt to new requirements. That’s why it’s essential to be close to your customers and employees.

How do you do that?

  • Conduct customer surveys
  • Discuss how the competition is changing
  • And pay attention to the needs of your employees

This is the only way to keep up and position your company attractively.


Reason No. 2: Lower the risk of being unexpectedly hit by a disruption

Nothing stays the same. Everything is in a constant state of change. However, it happens that seemingly suddenly an entire market is shattered by a fast-growing innovation. Existing business models and old-established approaches are replaced or even completely displaced by innovative innovations.

As an example: streaming providers. Whether in the music or movie business. They have almost completely replaced CDs and DVDs. Anyone who wants to watch a movie these days turns to a streaming provider. No one has to go to the trouble of looking for a suitable film in a video store anymore.

Therefore, always stay up to date and observe how the market is changing. This is the only way to keep up and secure your business for the future.


Reason No. 3: Trends such as new work or new business models make business transformation unavoidable

The focus of many employees today is on personal development. They no longer live to work. Work must fit the chosen lifestyle. Be this in the form of a home office job, co-working spaces or flextime. To this end, customers also expect a high level of service and an excellent experience.

The new business models demand flexibility and adaptability. Companies that don’t keep up with this will quickly be out of business. And because the market is constantly flooded with new companies and ideas, this often happens at breakneck speed. So make sure your company keeps up and get support when you need it.


Reason No. 4: Gen Z and future generations demand modern organizations

Companies must adapt to the change demands of employees. This includes not only an adapted way of working, but also a new style of leadership. Where once strict templates, authority and control set the tone, leadership today is characterized by supportive activities.

The manager’s task is no longer to instruct his or her team, but to empower it. Leadership takes place at eye level. A transparent culture of trust is crucial to this.


Reason No. 5: Sustainable growth requires continuous development and an agile mindset

The good old days, as some say, can no longer be used as an excuse for standing still. Only those who constantly evolve will grow sustainably. And this applies to employees and managers, as well as to the entire organization.

Companies must become flexible in their thinking and always be open to further development. This starts with the CEO and ends with the employees. Sustainable growth can only be achieved if everyone pulls together.


Reason No. 6: Internal and external expectations increase the need for cultural and structural adjustments

For a company to become and remain attractive to the younger generation, both cultural and structural adjustments are needed. In this regard, a one-time adjustment is not enough. As already mentioned, in Reason No. 5, a company today is in a constant process of growth and development. Therefore, it should be regularly reviewed whether cultural or structural adjustments become necessary.

A company must no longer see itself as a mere employer that pays the salary every month.

As a business leader, you need to ask yourself questions like:

  • What makes our company attractive to Gen Z and future generations?
  • What benefits are expected and how can we stand out positively?
  • What measures must be implemented so that our company can retain good employees in the long term?

Only in this way can a company remain sustainably attractive for the labor market.


Reason No. 7: New technologies flood the market

Last but not least, new technologies like AI are crucial to business transformation. Just as companies can’t stick to tried-and-true ways of doing things, they can’t resist new technologies. Addressing them early on will go a long way toward ensuring that companies remain future-proof.

Find out about the current status in good time and act before your competitors pass you by. Because the new technologies can support the working world enormously if they are used correctly.


When will your company need a business transformation?

You’ve now learned more about the top seven reasons for business transformation. Of course, there are many more reasons that make a transformation inevitable. What is the situation in your company? How future-proof is your organization? Make sure at an early stage that your company can keep up with the times. I would be happy to support you as your partner for transformation. Leave me a message via contact form right now and I’ll get back to you.


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