To Sustain the Momentum of Transformation

In our "Architects of Change" series, we speak with top executives driving corporate transformation. So how does Dentsu Inc.'s BX (Business Transformation) division, which partners with companies undergoing transformation, approach client firms and what value does it deliver? We spoke with Shingo Yamahara, Director of the Business Transformation Division 2.

More companies are grappling with the challenges of their "second round" of transformation.

Companies that have pursued transformation over the past few years—through DX or business reform—are now facing new challenges. "We established our purpose, but employee change isn't progressing as expected," "New business seeds have sprouted, but they haven't grown into strong pillars," "DX improved work efficiency, but our core business's earning power hasn't changed"—Yamahara notes that many executives are troubled by the fact that these efforts aren't leading to growth as anticipated.

"We call this the second-lap dilemma of transformation." It means executives who have driven change are now confronting new challenges in achieving fundamental growth.

An interesting survey finding emerged.

Fewer employees than expected are proactively engaging with transformation within their companies. The 2021 " Employee Attitudes Toward Corporate Transformation Survey " revealed that only about 20% of employees are "proactive about transformation," while about 30% are "reluctant followers." The remaining 50% are either uninterested in transformation or even resistant to it. Many people view change passively, harboring a vague anxiety that "I might be the one being changed." Under these circumstances, no matter how much top management formulates purpose and waves the flag, actual corporate transformation often stalls at the operational level.

Given this corporate reality, how does Dentsu Inc. achieve results? Mr. Yamahara states that Dentsu Inc.'s success in guiding client companies through business transformation and corporate reform as a partner stems from its approach: comprehensively addressing challenges while consistently and meticulously accompanying the transformation activities.

"We meticulously grasp employee insights and integrate them into the transformation strategy. It's also crucial to develop concepts and strategic roadmaps that are easy for everyone to remember and communicate. Sparking discussion is the first vital step. Then, we actively engage employees in the transformation process, creating momentum within the company. Incorporating the company's DNA into the transformation vision and messaging is equally important. We communicate not only what needs to change but also what remains essential. Repeating this process builds momentum."

It becomes crucial to build a transformation architecture (blueprint) based on employee insights, create empathy for the transformation story and process, and develop an action plan that keeps the momentum going.

Driving Transformation Holistically

Dentsu Inc. originally received many consultations regarding purpose formulation and transformation in marketing and branding. This was an extension of communication and marketing.
From there, Yamahara explains, the firm began receiving consultations not just on "communication," but on designing and realizing the more fundamental substance of transformation itself. They started receiving inquiries about transforming the business itself and creating new ventures from the perspective of the market and consumers.

The scope of corporate transformation support has also expanded.

While the core focus was initially on leveraging communication expertise to enhance internal engagement, the scope has broadened to address structural challenges, including support for organizational and HR system design. Support in these foundational areas also connects to DX, encompassing the construction and operational support of IT infrastructure and data management platforms.
This has led to requests for support in formulating management and business strategies themselves. Dentsu now assists in building the architecture for transformation, including developing mid-term management plans, roadmaps for implementation, and action plans.

In this way, Dentsu Inc. has developed its "Holistic Transformation Model" to holistically grasp and support corporate and business transformation challenges. By connecting professionals across various domains, we accompany companies throughout their journey.

  
"Corporate culture cannot evolve unless the value the company creates changes. New businesses cannot be realized unless every internal mechanism changes. It is crucial to drive transformation holistically, connecting siloed internal functions while linking the business side with the corporate foundation side," says Mr. Yamahara.

Business challenges and corporate issues that appear isolated at first glance are often interconnected and influence each other when viewed across the entire company. Solving just one individual issue won't bring about transformation.

Continuously creating new value for society and within the company

According to the "strategy" framework proposed by Professor Felix Oberforsth of Harvard Business School, it is vital to "increase the value provided to society and customers (Willingness-to-pay: WTP)" and "increase the value provided to employees while reducing their sense of burden (Willingness-to-sell: WTS)." (Source: "Value Is Everything!" Toyo Keizai Inc.)

Mr. Yamahara states this concept shares common ground with Dentsu Inc.'s transformation approach, which prioritizes value creation. It involves enhancing the value customers are willing to pay for through business creation and brand value enhancement. Simultaneously, it means elevating the significance of working for the company, building systems that foster growth, improving engagement, and increasing employee satisfaction. Integrating these external and internal transformations drives organizational passion and enables growth.

Beyond Dentsu Inc. itself, the Dentsu Group includes companies like DENTSU SOKEN INC. (formerly Dentsu International Information Services), Dentsu Digital Inc., Dentsu Consulting Inc., and Ignition Point Inc. Approximately 800 transformation specialists collaborate daily to tackle client companies' transformations, leveraging their expertise and passing the baton as needed. It is precisely because of this pool of professionals that holistic transformation can be driven forward.