John Ganem is the CEO of Kloeckner Metals Corporation.
The megatrend surrounding technology, specifically digital technology, is affecting organizations around the world. These innovations don’t just influence the way we communicate; they’re impacting the way we do business.
It has become increasingly evident that these transitions are the way of the future, and to stay competitive, legacy businesses will need to become frontrunners in this transformation.
However, this type of transformation is not always so easy, especially for those long set in their ways and traditions. There may be constraints related to IT systems, employee ability (and willingness) to embrace digital transformation or issues with timing; some customers may also resist change.
But I believe that legacy businesses must recognize this shift in order to remain competitive and join the digital revolution. Gone are the days when businesses could operate under restrictive and singular processes. In today’s world, you need to adopt an agile and flexible approach that highlights the needs of the customer. The following are some ways to do this.
Let Customers Drive Innovation
Transforming a legacy business requires more than simply adding e-commerce technology. The operation must be truly front-to-back, as it affects every aspect of the business. But as important as technology is, it can’t be what ultimately drives change.
Customer requirements are the ignition point for this type of transformation. In legacy industries, these diverse businesses are selling across the entire industrial spectrum. This includes businesses of all sizes with different requirements for quoting, shipping and invoicing. There is a level of customization that is vital when developing a solution to meet all those needs, and you should look to the customer in deciding how to tackle these changes.
Oftentimes, businesses will roll out new technology without first looking at it from a customer perspective. And in almost every case, I’ve seen that these solutions are not as successful. You can experience the greatest success when you listen to your customers to discover their pain points and craft tailored solutions based on their requirements.
Break Free From Complacency
Legacy industries may become complacent, especially when their current model has proven effective. However, this complacency prevents them from staying ahead of ever-changing trends. With an older workforce and decades of historic successes, these businesses may be reluctant to consider new ideas. This mindset leads many legacy companies to become incredibly risk-averse and resistant to change.
Transformation requires risk—and failure. Legacy companies are faced with the tremendous challenge of transforming their cultures into an environment that not only embraces risk, but accepts and learns from failure. This is a massive shift for a company to make.
My company had to realize that it was okay to fail. We needed to learn to fail fast and make the necessary adjustments to improve future outcomes. To avoid making the same mistake over and over, it’s important to identify the early signs of failure and pivot accordingly.
Again, this mindset can be a real challenge for legacy companies. Understand that when you go through a significant digital transformation, there will be failures. The key is not to be embarrassed or afraid of them.
Create A Culture Of Transparency
This type of cultural shift also requires creating an environment where people aren’t afraid to speak up when something isn’t working. Employees should feel comfortable and safe sharing their observations without fear of backlash. Transparent communication can play a big part in opening the door for major transformation.
An overhaul of this scale takes substantial time and intention. History shows that there’s no recovery for legacy companies that resist change for too long. Lasting change is only possible for those who have the early foresight and courage to embark on this type of journey.
When a company decides to pursue a significant cultural shift, one of its primary goals should be to create alignment and get buy-in internally. Like any sizable transformation, this impacts the day-to-day world that employees operate within.
I encourage you as a business leader to see this as an opportunity to grow your business, create more value for your customers and make the daily experience of your employees better—a journey everyone will want to be a part of. The sooner your employees understand this value and get on board, the sooner change can happen.
Pivot Towards Progress
Without rethinking company culture and examining methods of communication, you risk a higher rate of failure. From my own experience, once you begin shifting towards this new cultural model, you will be able to focus on establishing strong communication lines from the ground up.
You cannot fail fast until your employees are willing to give you the feedback you need. This transformation can help create a lasting environment of collective rather than corrective action.
Successfully making this transition can help you adopt a shared mindset of continuous improvement. In the midst of this transformation, assess everything you do every day to find broken processes and opportunities to improve. Listen to employees and leverage data to bring new technology to bear. One of the biggest mistakes a company can make is to accept the status quo. Even after the shift, leaders need to continue challenging processes and trying to do better.
These shifts will also make it much easier to attract younger talent. Legacy businesses tend to have an older workforce, and those long-standing employees are often nearing retirement. If legacy companies want to attract and retain new talent, they must recognize that the younger generations want to do rewarding work that fits their values.
Investing in tools and processes to create an employee experience that caters to a broader workforce naturally entices more talent. As a result, you’ll be more likely to successfully position yourself in the marketplace as an employer of choice.
With the right mindset and a willingness to fail fast, I believe every legacy business can achieve its goal of becoming a customer-centric, data-driven and high-performance organization.
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