Insights & White Papers

Corporate Transformation: Why Internal Efforts Often Fail and How to Truly Incubate a New Way of Doing Things

By Krzysztof Rzymski

Transformation & Assurance

Eyes roll throughout a corporate office when employees hear that their employer is about to try to make some massive transformation. Employers are often excited to announce that they are trying to steer themselves in a new direction. However, corporate transformation rarely translates to a true transformation that results in positive outcomes.

A big part of the reason for this is that companies are not using their resources effectively. Instead of working on creating incubation programs that focus on internal implications, many companies are misguided in how they direct their incubation efforts.

Why Internally-Led Corporate Transformations Fail

It is NOT hyperbole to say that most internally-led corporate transformations fall flat on their face. The statistics prove this. In fact, research [1] found that roughly 70% of modernization and transformation programs fail in a given year. A major issue identified in the research was a lack of enthusiasm and follow-through for the program.

Generally speaking, these internally-led corporate transformations are not a complete failure. There are generally at least a few things about them that go right, but they don’t live up to their full potential. There is something left on the table, and that means that there is real potential out there that is not seeing the light of day.

Often, the shortfalls of an internally-led corporate transformation project come in the form of a lack of alignment between the people at the top of the organization and the everyday foot soldiers that must put it into practice. That disconnect creates friction and results in all sides failing to communicate effectively with one another. It doesn’t take long before it all starts to fall apart and the corporate transformation never truly manifests.

Yet another set of issues to be concerned about include:

A Lack of Technology Strategy and Vision Support by Business

It is one thing to say that you want to create a full transformation of your company. However, it is another to put it into practice. A technology strategy must support a business strategy[1] and not vice versa. Sometimes transformations are led by information technology or without sufficient engagement with business leaders, which can create hiccups in any transformative plan.

Not Enough Knowledge Workers

Unfortunately, one of the reasons why some companies cannot transform the way that they want to is because they don’t have the right knowledge workers that they need to power that transformation forward. Too often a company’s available resources are assigned to the transformation effort instead of the best resources that understand the company’s future vision and are not incented by the status quo. As such, a lack of qualified resources is one thing worth considering when looking at why a corporate transformation has failed.

An Inability to Backfill Resources

Being stuck in a situation where one cannot easily backfill their transformation resources means that the transformation will have trouble getting up off the ground as well. Many times, resources assigned to the transformation are not fully dedicated to the program. Resources end up either trying to do two jobs or not spending enough time on corporate transformation activities. This is yet another hindrance that many companies face when trying to make a change.

Those are a few of the prominent reasons why an internally-led corporate transformation project so rarely works. There are other circumstances that can play a role in the derailment of a transformation plan. Much of this boils down to how the leadership sets up the transformation program.

What is a Generic Corporate Incubator?

The European Commission’s report titled Benchmarking of Business Incubators2 laid out an excellent definition of a corporate incubator. That definition is that a business incubator is:

…an organisation that is able to accelerate the processes of new business creation by providing them with a plethora of services: from physical spaces for networking to IT equipment, from business support to integration opportunities

In essence, a generic corporate incubator is simply a space where employees have the resources that they require to generate real results for the company they work for. They are offered not only the technological resources they require, but they can also tap the human capital that they need to get things do

A generic incubator might help to have some issues within the company resolved. However, it is not the end-all-be-all of the corporate incubation. There is another step in the right direction that one can take to create a better incubation space.

Digital Transformation Incubator: The Ultimate Goal for Corporate Incubation

Instead of simply collecting people together to brainstorm ideas for how to solve certain problems, a digital transformation incubator focuses on utilizing the technological resources available. Those may include:

      • Real-time data about customers
      • Feedback from previous customers
      • Social media data
      • Previous marketing campaign data
      • Internal operational data

The list goes on. The point is that those who work inside of a digital transformation incubator focus on how to solve their customer’s problems by using the data they have now and applying it to the issues that customers might note. In addition to this, the participants within this incubator will also look at how they can potentially update business systems to better serve their customers. After all, customer expectations are evolving at a rapid pace. It is best to keep up with the times to create the best possible customer experience.

Benefits of Digital Transformation Incubators

The reality is, no business leader is going to invest in something unless they see the upsides to it. Fortunately, the benefits of digital incubators [3] make themselves readily apparent. They include:

Leverage Existing Assets

Those that work within a digital incubator may recommend that their employer invest in new technologies. However, they might also discover hidden value in the existing assets already possessed by the company they work for. This means that the company might be capable of claiming untapped potential in things they already own.

Create a Culture of Innovation

Improving the culture of innovation within the organization is always a top goal worthy of consideration. Getting people to think in innovative ways can help them generate ideas that might never have come to the forefront otherwise. 

Expand Upon the Company’s Vision

The overarching goals of the company can also be expanded upon and improved. Digital transformation incubators are a great place for this to occur. People within the incubator can see new ways that the company can advance its mission, and they can offer those insights to their employers.

Enable Rapid Design and Feedback

Too often, transformations aim to make big changes on untested strategies. Instead, digital transformations should support agile testing of new business and technology strategies and taking those learnings to modify quickly and further retest them in the marketplace or within the company.

There is no question that businesses large and small still struggle to complete a full corporate transformation. It will remain a challenge to deal with if one doesn’t make some changes to how they approach the problem. Fortunately, now that you know how digital incubators can produce such significant benefits to a company, you can make better choices for yours.

Corporate transformation strategy - Businessman having a meeting with his employees in an office.


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  1. McKinsey
  2. OP
  3. Bundl
Krzysztof Rzymski By Krzysztof Rzymski