Here’s how you can lead business transformation in your startup

The concept of ‘Business Transformation’ has existed since the beginning of commerce. Simply put, it is the ability of a business to adapt itself to changing customer requirements and/or the evolving business environment. It happened when we moved from barter to currency-based commerce and continues to happen even today when an increasing number of entrepreneurs are starting-up each day. So, what really has changed, why is it more important than ever to understand this concept, and how do you go about it?

Monitor the landscape. It is important to have your ears and eyes on the ground to monitor the landscape for emerging trends that could bring about tectonic shifts in your business and to get an early sense of things to come. And in the dynamic market that we operate in today, opportunities or challenges could come from any quarter - change in customer preferences, the macro-economic environment, new technology or competition. For example, demonetization came as a shot in the arm for payment wallet companies, while it adversely impacted certain other sectors.

Have a structure in place that is quick to anticipate and react to change. While strategy-making is a function typically reserved for business leaders, it should be far from a one-way street. The ideal process should begin with a ‘bottom-up’ mechanism in which feedback is collected from the frontline staff who are closer to the ground and who can perceive changing customer needs or a change in the business environment sooner. This should feed into the classical ‘top-down’ strategic planning process in which the top leadership takes this feedback and carries out a detailed strategic review if needed.

Back to the drawing board. Once a need to transform has been realised, the next step is to figure what needs to change and how it needs to happen. It could be a complete overhaul of the vision, mission and values; or a tweak in the business offering or perhaps a change of the business model itself. One of the most outstanding examples of this in the Indian start-up landscape is Paytm. From a mobile VAS company in 2010 to becoming the leading payments company in India, Paytm has managed to stay ahead of the curve. The secret – ability to stay agile and responsive to market evolution.

Rolling-out the new. A new business model or a change in an organisation’s reason-to-be can lead to multiple modifications internally, ranging from internal systems and processes to a shift in the product roadmap; from material supplies to talent requirements (newer skills, capabilities and values); and even the way customers buy your products and engage with you. The key to doing it well is to communicate extensively, execute decisively and, most importantly, measure continuously to ensure that you are on track.

Leader's role. In such a change scenario, leaders need to evangelise the rationale and criticality of the change to the senior management team, middle management leaders and with the frontline. In addition, they may have to communicate to shareholders, partners and key customers. To change the direction of the ship, one needs all hands to be rowing in the same direction.

It would be safe to assume that most-start-ups are founded and run on strong founder conviction about the business model. However, very often, they are also powered by emotion. This combined with intense competitive pressures and investor demands can get too much to juggle. More so among young and first time entrepreneurs. So how do you manage it all and not drop the ball?

If you think it is too late, it probably is. As owners of an enterprise, founders tend to get wedded to an idea so letting go off it or revisiting it can be one of the most difficult decisions. Which is why it is important to remain receptive to market signals in order to recalibrate before it's too late.

Change - in spirit. As humans, we are averse to change. So it is not uncommon to see a new set of mission, vision and values on paper but not in spirit. The new thinking either never gets going, or in some cases reverts to how it was. And a new approach with stale thinking is like two gears moving in opposite directions.

Keep the faith: A ‘pivot’ usually comes a couple of years down in the lifecycle of a start-up, and embracing it sometimes comes at a price – bruised pride because the original idea did not work, a trail of burnt cash in its wake, unhappy investors and depleting assets in the form of talent. However, the key is to stay invested and keep the faith.

Seek counsel. It is good to have a circle of trusted advisors and friends who can think objectively, give constructive feedback and be honest while doing it. Sometimes, all it takes is to look at things through a different lens, and an outside-in perspective could be the best way.

Conviction is considered to be the bedrock of enterprise; however, the environment in which we operate has evolved. So in the spirit of transformation, it is only fair that the change begins with a realisation that there is a need to change.

(The article is authored by Dhruv Agarwala, Group CEO, Housing.com, PropTiger.com and Makaan.com)