Transformational strategy is a type of strategic management. Strategy means a plan and transformation means change. Transformational strategies are used in business to manage the change in the business and how it affects the different processes and improves its speed or scale. The transformational strategy involves important strategic and cultural changes, selecting radically unique technologies, and making important operational changes to meet new demand and supply.
Some instances when transformational strategies are used include implementing important strategic and cultural changes, adopting varied technologies that are quite new, introducing operational changes, and reforming the service and product offerings to sustain in the market and meet the unexpected competition and reduce losses dramatically.
For example, when the company had only papers and files as its way of working in the late 90s, it had to adopt a transformational strategy to move from physical files to online files. As the technological introduction in the company required a new workforce or developing the existing workforce to get adapted to using technology, the company had to consider the time and speed of its work.
The company invested in new set of employees who were already acquainted with the IT skills to co-work with the existing employees who were mid-aged and didn’t know about the usage of technology at all. It was a period of 5 years that the company took to transform the entire workforce to learn IT skills and convert all its manual work processes to online processes. This made the company increase its budget for training and development and hiring of human resources, but it gained revenue from the clients who were willing to invest in the company for its upgradation.
Some transformational strategies also include mergers and acquisitions. When the coronavirus pandemic hit the world in 2020, the whole world had to stay back at home and the education system was affected badly. However, several ed-tech companies came together to offer online solutions to schools and colleges so that they can share lessons and classes through online mode in a seamless manner. This incurred additional expenses for the education industry to upgrade its existing physical infrastructure to go digital one, however, it recovered the expenses by hiking the school and college fees from the next academic year.
Also, several EdTech companies merged into big giant companies so that they could expand their niche reach and also transform their work processes to increase their revenue as well. The coronavirus pandemic taught how small to medium to big companies transformed their work processes to digital mode. Yes, the transformation was not at all easy for several people but it also helped them to work in the real world.
Digital transformation efforts also helped several companies to understand how customers interacted with every marketing campaign in terms of TV, digital advertising, email, social media, direct mail, and in-store, among others. Embracing innovative digital strategies and also becoming a part of the new digital age are some of the transformations adopted by the companies by developing new business models.