Douglas Kehring wrote in Forbes about four lessons that Oracle has learned about business transformation, which was reflected on at Oracle OpenWorld 2019. The Oracle@Oracle Experience was debuted at OpenWorld 2019 and was made up of 75 sessions that were aimed at sharing Oracle’s journey to the Cloud with conference attendees. The experience confirmed what Oracle has suspected all along – that customers are eager to hear about how Oracle is using Oracle Cloud to transform its own business as they begin similar journeys of their own.
Roughly 20 years ago, Oracle was focused on selling products that were licensed to customers. When the cloud came along, it was the first technology transition to impact the fundamental business model of the industry. Oracle experienced the difference in business models firsthand as it made some of its first cloud acquisitions. For instance, Oracle saw companies focused on collaborative success through running cloud technology on behalf of customers, rather than licensing great technology that customers could take in-house and implement and integrate as needed to drive their own success. The entire business model had changed from being product-based to being service-based.
As a result, Oracle decided that it was necessary to develop a new perspective on how to not only run these service-oriented businesses post-acquisition, but also how to transform Oracle to match.
It’s important for people to share lessons learned about transformation because research from McKinsey suggests that most of us are not very good at it. Fewer than 20 percent of companies have succeeded in sustainability improving their business performance. It’s even starker by industry. Digitally savvy industries like high tech, media, and telecom are seeing better success at 30 percent, while traditional industries like oil and gas, automotive, infrastructure, and pharma succeed less than 10 percent of the time. Finally, the bigger you are, the harder it is to transform successfully. Companies with fewer than 100 employees are nearly three times more likely to succeed with a business transformation compared to companies with more than 50,000 employees.
Based on his own research and experience, it comes down to four elements.
Oracle’s 4 Business Transformation Lessons Learned
No. 1: Executive Mandate to Transform
The most important starting point for a business transformation, and the best predictor of success, according to McKinsey, is a CEO who recognizes that only a new approach will dramatically improve the company’s performance and who mandates the reinvention as a result.
Companies are famously rooted to the mantra of “this is how we’ve always done things,” and as a result, breaking the cycle is extremely challenging, and certainly no transformation can be done unless this occurs. That’s exactly why sponsorship for the entire business transformation needs to come from the top. If the transformation is undermined or unsupported by the CxO level audience, the entire process will go nowhere.
With CEO Safra Catz and Chairman Larry Ellison leading the charge, Oracle has been able to accelerate efforts and disrupt itself.
No. 2: Uncompromising Focus on the End Game
Most organizations within a company are oriented toward their own functional success, and change initiatives led by these siloed teams tend to focus on efficiency gains and are relatively band-aid in nature. However, for transformations to be successful, leaders and line managers need to move beyond insular KPIs that deliver incremental process improvement. McKinsey’s research confirms that companies that have successfully transformed have created clear, aspirational targets.
This can be tough, though, because while most people say they like change, the reality is they don’t. According to Prophet Magazine’s research, business transformation success is often stymied by entrenched viewpoints, resistance to change, and legal and compliance concerns.
Oracle is ruthless about the change required. In fact, rather than approaching problems from the perspective of what is needed to fix to deliver an exceptional experience, Oracle starts from the perspective of who it serves, whether that is the customer, the employee, the citizen, or anyone else, and whiteboard the ideal experience. That ideal then becomes Oracle’s north star.
No. 3: An Unrelenting Sense of Urgency
For a business transformation, distraction is the constant enemy. Most employees prefer to work on the items that have led them to be successful in the first place or that promise immediate rewards—like new customers, new M&A opportunities, and the like. It’s tempting to devote some, but not all, attention to transformation, and to delegate responsibility to junior team members or old-school program management offices with no clear timelines. Given this, many initiatives move too slowly.
Oracle is constantly reviewing and reporting on top workstreams, and it holds the cross-functional teams responsible for delivering progress each week, continuously asking how they can help the teams move more swiftly and what they need to make things happen. This faster clock speed is one of the keys to our success. When it needs to be done yesterday, teams work with much more speed and urgency, and the results will speak for themselves.
No. 4: Stewardship by an Executive with Authority
Prophet Magazine found that successful business transformations are an enterprise-wide effort and led by an executive with broad organizational purview. Similarly, McKinsey indicates it’s essential to create a hub to oversee the transformation and drive cadence markedly different from the normal day-to-day one.
What Oracle has found to be most effective is to have a senior leader, with no organizations or business processes to protect, tasked with dreaming up the art of the supposedly impossible and then facilitating the cross-team collaboration required to turn the reach into reality.
While Oracle could have hired someone from outside to steward the change process, the reality is knowing and understanding how the business currently works is instrumental to the execution of the transformation so that they can be savvy with regard to any conversation with another internal leader. Once the problem Oracle is targeting to fix is identified, the team works diligently to get agreement from the CEO’s office before moving forward. If the team can’t convince them of the issue and the solution, then they know they likely can’t convince anyone else. Then armed with their support, the team drives top workstreams through to execution, success, and continuous improvement.
This involves three common threads:
- Strategy
- Program management
- Communication
For strategy, this means identifying the end goal state and the experience you want to deliver. The program management is marshaling the lines of business and functions to implement the changes along with striking the need for urgency. Communication is educating, engaging, and empowering employees on your goal and strategy so they can join you in our transformation efforts.
Kehring explained that Oracle is proud of the results of its business transformation, but they are not done yet. In fact, he said they never will be complete since the mandate is to stay ahead of customers’ ever-evolving expectations.
To learn more about Oracle’s four business transformation lessons learned, check out Kehring’s Forbes article.