The benefits of business transformation are many, ranging from increased efficiencies and more agile processes, to better company culture and improved organisational resilience. To enact it requires big thinking and often big budgets. The process can, understandably, appear daunting, especially if it’s undertaken on a large scale or across a multinational organisation.
As part of our commitment to the BIE community, we hosted a panel discussion with experienced business transformation leaders, to gain insights into what transformation is like up close, what challenges they encounter, and what’s really required to make it work.
Getting the right balance of people and processes is essential for handing major transformation projects – and inherently challenging. Do you rely on in-house capabilities, bring in interims, or go to professional consultancies?
For several transformation leaders on the panel, interims play a valuable role, but the reliance on them can be problematic. “On one of my programmes, I had a team of 80-100, largely made up of interims,” one explained. “People came with different methodologies and expectations and touch points. It created an extra level of work.”
Another struggled with the company’s piecemeal approach to employing interims, which seemed intended to paper over skill gaps, rather than bridging them effectively. “The in-house team was hampered by all sorts of legacy issues,” they said. “So they tried to DIY their way through the problems by bringing in interims, all of whom did their own thing. It just didn’t work. I honestly wonder, in those situations, whether it’s better to bring in a heavyweight, professional, all-in-one solution.”
Some organisations just can’t stretch to it, however. “It goes against the grain for cost or control reasons, or even because they just don’t want to admit to the board that the legacy systems are so bad,” the panellist continued. “The risk is that you might burn those costs anyway by going down the DIY route. And if you under-invest in business, it will be very noticeable in terms of long-term viability and sustainability.”
Sometimes it isn’t interims filling in the gaps, but the programme managers themselves, as one panellist articulated. “Our job actually encompasses many roles, and sometimes in the early days you might have to step in and fill the white space. Arguably, you should stop and explain that you can’t progress without whatever it is that’s missing, because there is a gap and it is a key requirement and it needs to be addressed properly.”
Even when you get the balance in the team right, there can be problems. “We concluded that we had the right strengths in the team to manage things. In the end though, we were really stretched – not by the competencies, but by the accountability.”
This resonated with another panellist, who explained that their biggest challenge wasn’t about who was on the team, but how the team was managed. There was a lack of planning and thought leadership. “Management didn’t think about the nuances of how the team was made up, and who had scope for what. I think we need to put our focus on the scope of each programme, and the intricacies between them.”
Each approach will be unique to the requirements of the client. However, one panellist wondered if it’s ultimately more about perspective. “I believe there’s a role for SIs, for consultancies, and for interims, although too many externals can throw off the balance. Perhaps it’s not about how many are on the team, however. Perhaps it’s about finding the right combination for the company. It’s more about the ecosystem, and working together.”
Sometimes the process of change just sparks more change, which is why panellists agreed that having a clear, cogent strategy in place is vital right from the start. You need to be able to refer back to it and use it to stay on track, especially as progress is made and processes grow – otherwise, with large transformations, you can get lost.
One panellist was almost three-quarters of the way through a transformation programme when their company decided to invest in IT, HR and finance transformation as well. “Suddenly multiple programmes had sprung up. We had to pivot what we were doing. You can only imagine how we had to shift, looking at interfaces and integration, and figuring out all the ways we had to co-create programme scope.”
“Ambition is great. The business was conscious that it hadn’t invested properly in the past, and they wanted to do something,” they continued. “However, a lot of people weighed in and wanted to improve effectiveness, all with their own ideas on how to do it. There wasn’t a coherent strategy to pull it all together.”
Another panellist agreed. “Strategy is not often done well in business nowadays. It’s misunderstood and misnamed in many ways. And there’s often a disconnect between strategy and action.”
“If there is robustness and quality at the top – particularly with the CEO and CFO – then transformation stands a chance,” asserted one panellist. “Without it, everything crumbles. You need proper governance and an anchor point at the executive level.”
Essentially, for transformation to work, leaders need to lead the way. Their buy-in is critical for the success of any programme. Indeed, one panellist attributed a large portion of their programme’s recent success to the arrival of a new CEO, CPO and Chairman of the Board. “All of them coming together and giving the programme their full support, was invaluable. Previously, the skills and experience to deliver the change was missing. With their arrival, there was real appetite and engagement. It tied in with their strategy, and they built off that. It was the first time I didn’t feel like I had to push the change management and transformation uphill.”
With that in mind, setting aside some of the budget for training leadership is recommended, where possible. A panellist explained: “It’s not just about changing the behaviours of the people on the shop floor. It’s about preparing the leaders to lead the change, and really embed it and manage the business in a whole new way.”
It was also argued that “70% of the time, when a transformation fails, it’s because you haven’t got people on board. The CEO and CFO need to understand that they are part of the value case. They have to understand how important their role is, and that their behaviours and mindsets have to shift.”
Change management is “tough to do and get right,” according to the panel, but it’s vital. One panellist’s company went down the hardline route, which “takes guts – they basically told a room full of people to get on board with the change, or they wouldn’t have a job. There is a price when you take that approach.”
There’s also a price if you don’t take change management seriously and view it as simply a tick-box exercise. “My client lurched towards it as a half-hearted gesture when things weren’t going well,” said another panellist. “They hired one young person at a junior manager level and basically left it at that. Job done. No surprises, but it didn’t work.”
Change management is more complex than many companies assume, according to the panel. “It’s incredibly important and very underrated,” said one. Yes, hearts and minds need to be won, but people need to be seriously trained as well. “It’s about managing the managers, and making sure they’re selling what’s going on, not just spewing out new processes. Nothing happens without extremely professional change management. If change doesn’t land with people, then nothing’s going to change.”
Justifying the spend to some CEOs and CFOs can be tricky. “Sometimes it’s hard to sell the cost because they think they can take the savings,” one panellist explained. So the importance of change management needs to be made tangible. Appointing a change lead can help, as can regular updates with progress reports.
One panellist also recommended line manager training sessions, regular meetings with MDs and appointing internal change champions. “We didn’t bring in external expertise, we grew it internally from the ground up. By the end we had a change community of 130 people across the business. It was important to give them time and space to take on this responsibility, in addition to their day jobs, and not to mandate it. By the end, we actually had people requesting more training. Just remember it takes time to get that push and pull right. You won’t make any cultural differences and change people’s ways of working without investment.”