Change may always have been part of business life but in an economy driven by fast-paced technological change, scarce talent, and increasingly affected by the unpredictable turbulence of global events, be they economic or political, change is now constant for many organisations.
PwC’s CEO Survey found 22% of UK CEOs believe their current business model won’t survive the decade, and with their global research indicating that 83% of top-performing companies have changed their business model in the last three years, the imperative to transform has become ‘business as usual’. To successfully operate in this environment, businesses must ensure change is delivered across the organisation in a coordinated and coherent way.
These developments have led to the emergence and increasing appointment of a Chief Transformation Officer (CTrO). As the CTrO role is a relatively recent addition to the C-suite Alex Hyde, a Director in BIE’s Transformation Search Practice, wanted to better understand what makes a CTrO successful and how they can be best positioned to deliver positive outcomes.
In this second instalment of our CTrO series, Alex sat down with four experienced CTrOs – Simon Wallis, Chief Executive Officer at GDK and former Chief Transformation Officer at Domino’s Pizza UK & Ireland, Nigel Fletcher, Group Transformation Director at IVC Evidensia, Alan Guthrie, most recently, Interim Chief Transformation and Information Officer at Calor Gas, and formally, Chief Transformation Officer at Johnson Matthey and Aurelie Canales, Vice President of Product Management at EXA Infrastructure and former Chief Transformation and Major Products Officer at Hyperoptic – to examine the route to CTrO in more detail.
A Chief Transformation Officer is typically appointed when it has been recognised that significant enterprise transformation is necessary, and that to deliver the transformation successfully, the leader of that change needs to operate at board level. The CTrO appointed to the role must then be able to present an overview of the transformation required, how it will be achieved and how they will operate as the central point of influence to co-ordinate across, and through each functional area affected by transformation to execute change.
“The job title is loaded,” says Nigel Fletcher. “You’re making a statement just by being there. You’re telling everyone we are going to do this, we are going to change. Consequently, as Chief Transformation Officer, you have to have the understanding and the mindset that your influence, your shadow, extends everywhere.”
However, change within different organisations happens in different ways. The strategic thinking, the approach, the management and the influence required to instigate change varies according to the industry sector, the structure of a company, the company’s culture and the make-up of the individual leadership styles held by fellow board members. Making change happen therefore means judging how to exert the right kind of influence on the right person at the right time. So, while the intention and purpose of the job may be the same between companies, how the role manifests – what the CTrO practically does – may be different. “You need to use system-level thinking,” says Fletcher. “You have to consider what levers there are in the company that you can pull in order to take everyone to the next level.”
Simon Wallis defined his job as being responsible for “the orchestration of the overall programme of change required to deliver our longer-term financial ambition.” Alongside this, he cites the responsibility to “provide business-wide transparency”. To this extent, the role has two major tasks – pushing for change on the one hand, measuring and sharing the progress and results of that change on the other. Aurelie Canales says her role is one of facilitation. While she can make hard and fast decisions about how the change should occur, unless she understands the people involved, their motivations and requirements, the business can get lost along the way and the transformation will fail.
For Alan Guthrie, team building and the ability to build strong relationships quickly is key. “You have to build trust, and you have to do this across the organisation to be able to make things happen, but all while being humble, because you won’t and can’t know everything.”
Knowing what it takes to deliver significant change in a business does not necessarily need sector-specific knowledge. According to Canales, the CTrO can be ‘an outsider’ in terms of both the business and the industry – the point being that making change work means asking the right questions, designing the right processes and making those processes happen. “Not having sector-specific expertise actually means you can be less threatening to people in the company,” she says. “Also, being an outsider means you don’t bring any assumptions with you. You can ask anyone, anything you like if you think it will help.”
Nigel Fletcher also makes the point that while the CTrO is responsible for making change happen they are not necessarily the ones who implement change. The actions taken are the joint responsibility of the business’ leadership team because they are the ones who have direct control of the organisation. It is the CTrO’s responsibility to make sure the leadership owns the change process from the start. Doing that means having the ability to work with all functions of the business, requiring great interpersonal skills, the ability to swiftly understand how functions work and how each function can support and embody the change. “You have to get the business’ leadership ready and lined up before you push the button to start the change,” says Fletcher.
To some extent, while the business world and the drivers for change may evolve, the approach of the CTrO remains constant: “The key to be a successful CTrO is to drive engagement behind the overall programme of change,” says Simon Wallis. “You need to be ready to fine-tune governance, reporting, and operational models in response.”
Aurelie Canales describes the CTrO as a “very personal appointment”. It takes care and judgement to find the right person who can take on the role for a particular business. Not only does the CTrO need the trust of their fellow business leaders, but they must also believe the people they are working with are capable and ready to lead the change. Cultural fit is crucial between the CTrO and the rest of the business, and a particularly good relationship needs to be established with the CEO – after all, the role is essentially about changing the way the business they lead is going to operate.
Being a member of the board is the crucial difference and has significant benefits for the post-holder, and the organisation. Alan Guthrie has found that the “difference is that you’re in the decision making, and you play a role influencing where the focus should and shouldn’t be.” The direct connection to the board allows for strategy to shape transformation, and the realities of what transformation is achievable, and when it’s achievable, to impact the strategic direction of the organisation. This effectively de-risks the likelihood that the outcomes of transformation and the strategic objectives of the organisation become misaligned.
With those relationships in place, a clear understanding of what the CTrO is aiming to achieve, and how they intend to do it, organisations are best able to ensure that they fully benefit from appointing into this increasingly crucial board-level role.
You can also read Part One in our CTrO series, The Emergence of the Chief Transformation Officer.
For more information on how BIE can help you to hire transformation talent or develop your transformation career, please contact our team.