As we enter a new decade, you’d be hard-pressed to find a business that isn’t engaged in a change program of some description. But what’s actually motivating this change — external factors, internal pressures, a mix of the two, or simply the demand to keep up with rapidly changing (and increasingly competitive) business landscapes?
In recent research conducted by Smartsheet, we asked senior leaders from across the U.K., the U.S., and Germany to answer that very question, with some potentially surprising results.
Changing motivations: Internal factors
At the individual company level, a range of factors are having an impact – but not necessarily where you might imagine. In the past, the pressure to change often came from the top down. Whether it’s demanding bosses, ambitious targets, or impossible company goals, it’s something that most of us have experienced at one point or another, so you might well imagine that the need to hit KPIs is one of the biggest factors driving transformation.
In reality, this is one of the least significant influences, with only 37% citing this as a motivation. And pressure from senior management sits at the same level of importance, with 37% saying this is a factor. So there seems to be a sense that change isn’t just motivated by people in the business needing to “perform better.” It’s a wider issue, and perhaps one that requires collaboration and a cultural shift to create the best outcomes.
This idea is backed up by what businesses say are the most significant factors driving change. Over half (51%) say that the requirement to work more efficiently and the need to meet customer demand lead them to transform, suggesting that businesses are moving toward a mindset in which finding ways to work more effectively – rather than finding ways to hit targets – is crucial to achieving success.
Business on the bottom line
That said, businesses are also experiencing bottom line pressures: 45% say that the requirement to cut costs is driving them to change, and 45% think that the need to keep up with the competition is a factor. Ultimately, it seems that businesses are under pressure to work smarter and cut costs in an increasingly competitive environment, which makes sense at a time when many sectors are crowded with established players and challengers alike – all clamoring for customers.
It’s also worth noting that certain sectors are feeling the pressure from their competitors more than others. Understandably, this sentiment is relatively low in government and the public sector: only 33% cite this as a motivating factor for transformation, likely because these organisations are mainly driven by outcomes, not by trying to attract new customers. In technology driven sectors, however, the pressure is much higher. Over half (54%) of tech businesses report that the competition is a factor driving them to make changes – while nearly seven in 10 (69%) wholesale, logistics, and utilities companies cite this as a factor.
Macro pressures: Broader issues
Company-level issues are important to consider, of course, but they’re by no means the only cause of change. A number of macro pressures outside of any individual company’s control are also at play.
Technology advancements are far and away the most influential issue in this bracket. Nine in 10 (89%) cite this as a significant driver of change, with 44% of this group saying tech changes have had a revolutionary impact on their business. And this was seen across sectors, suggesting that few businesses are immune to the impact of technology.
Industry changes were another key macro influencer, with 79% saying that these – which include regulatory shifts – have had a significant or revolutionary impact. This was particularly prevalent for German companies (89%), perhaps a reflection that these businesses operate in more highly regulated markets. (Here's more information on digital transformation in Germany.) In contrast, only 71% of U.S. respondents felt this was a significant driver, with the U.K. sitting in the middle at 78%.
Finally, political drivers and increasing costs are considered equally influential. Almost three quarters (73%) think that political factors like changes in the law, or changing trade deals, have had an impact. Meanwhile, 73% think that costs relating to interest rates, inflation, exchange rates, or tax are motivating them to transform.
Turning transformation motivation into achievement
No two businesses are the same, and individual motivations for change will always vary – even across teams within a single organization. But understanding those motivations is important, because – as you can discover in the full research report – successful transformation demands clear objectives and a shared vision for the future.
Ready to learn more about how to achieve impactful transformation for your organization? Download the full report, “Success vs. Achievement: Understanding the Effectiveness of Digital Transformation,” to continue the story.