Business Transformation & Business Transformation 7 Steps. All About McKinsey Business Transformation Model

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Business Transformation & Business Transformation 7 Steps. All About McKinsey Business Transformation Model

 “Transformation isn’t about improving, it’s about re-thinking” by Malcolm Gladwell.

Business Transformation allows an organization to have better collaboration with its employees in a more personalized way. It helps in engaging customers, high employee innovation and productivity, along with more accurate insights of various types of data, all of which are important for an organization’s survival in the competitive era.

What is Business Transformation?

Business Transformation is the term that is used for making important changes in how an organization runs. They can be defined as bold, and seismic shifts that organizations make for accelerating change and growth that is beyond typical incremental advancements. It aims to make changes to processes, people, and systems as well as to align the organization with a business transformation strategy and vision to work upon. A business’s transformation may bring changes to the whole organization, such as integration of two companies getting involved in an acquisition, or it may include a specific change to a compartment like IT, Marketing, HR, or Finance. Organizations undertake business transformation so that they can create additional value to it.

Handpicked for our Leaders: Drivers of business transformation.

Steps for Business Transformation-

For a successful business transformation, there are a few steps listed below that an organization needs to follow-

  1. Build Strategy- Firstly, an organization wanting to transform by bringing a change should have a vision of what they want to do in the future. They should take a look at where they are standing presently and where they want to be in the future, and then bridge the gap between the two. This vision should be lined with strategic goals and all the necessary needs. A proper business transformation strategy will guide your organization to go ahead.
  1. Establish Leadership- The second step is to select leaders who will provide support to the transformation program. A leader who is knowledgeable of his role can take full responsibility to ensure any transformation and its smooth delivery and that too on time, within the budget.
  1. Do Planning– A clear business transformation strategy will build a roadmap of the transformation and ultimately help your organization to achieve its vision. Implementation of a plan determines that essential changes are being made for the transformation strategy. A proper plan will have clear objectives, scope, milestones, budget, and timeframe.
  1. Set-Up Program Management- The next step is to set up program management. This step helps in the establishment of program governance, supervision of all parties, along with adopting the transformational change and keeps all these on track. Moreover, leaders should manage the business transformations while having the right skills and capabilities to motivate their team and make the change happen.
Steps for Business Transformation
  1. Collect Resources- To achieve your goal successfully, you need the appropriate resources at each stage of your business transformation plan. It’s all about having the right people, doing the right work, at the right time. Thus, you should collect the right resources to improve the profitability of your organization. Make sure that you have the right team who works to achieve the vision by showcasing their best skills and in time.
  1. Execution– After the collection of resources, the next step is to execute the business transformation into reality. It doesn’t matter how good your business transformation strategy is, if you don’t execute them well, it won’t make any such difference. Therefore, as a leader, make sure that you execute your plan well with the help of all the fundamental steps.
  1. Integration– A business transformation doesn’t end when the strategy is implemented. After you auspiciously implement your plan, you need to embed and integrate new ways of working that meet the changing demands of the market. 

About McKinsey Business Transformation Model-

McKinsey’s Business Transformation Model is one of the management frameworks that hold the potential to draw a case interview. This influential business transformation model is more like a management framework that you can use to navigate the changes in employees and be able to focus on when your organization should begin to operate in a much different manner than it did in the past. This model includes-

• Encouraging the development of understanding the organization.

• Reinforcement of changes with the help of formal mechanisms.

• Developing talent and skills in the employees.

• Role modeling the team members.

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If you follow all these four above-mentioned steps of McKinsey’s business transformation model and reinforce them one after another, it will benefit your organization by bringing a change in employee’s mindsets and positively influence their behavior.

Furthermore, there are 4 important D’s of digital transformation which holds an equal significance in McKinsey’s business transformation model, and goes as follows-

Discover– For a profitable business transformation, you should shape your digital ambition, strategy, and cases that are based on your organization’s insights.

Design– Make sure you’re able to reinvent the new capabilities of your employees and breakthrough journeys as a part of your digital transformation program.

Deliver– The next important phase is to deliver by activating such an ecosystem that rapidly provides at scale.

De-Risk– The last and most major stage is de-risking by structuring the change in program, resources, and commercial model as well for reducing risks related to operations and finances.


An organization that is interested in maximizing performance, increasing efficiency, and improving profits should be exploring business transformation opportunities. For building a successful business transformation strategy, you should make sure that you have a proper plan and follow all the steps for the establishment of that business transformation strategy, which would eventually benefit your organization and employees.

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