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 for many organisations now constant.
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 first 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.
Assuming the position of Chief Transformation Officer in a business cannot be taken lightly. The job is not simply an upscaled, permanent version of a Transformation Director role focused on the delivery of a programme. Operating in a board-level role brings more responsibility, it also requires a higher level of interpersonal, management and analytical skills and the ability to navigate complex environments to drive change to its conclusion.
Leaders who take a role at this level will typically have seen many years of project and change management but often through different lenses, as CTrOs can come from a range of backgrounds. As their career has progressed, the projects they have delivered, overseen or operated around and with, have grown in terms of size and impact.
Importantly the experience they have gained over that time will have given them a critical and practical insight into the challenges of leading organisations of scale with regard to people, process and execution. In this sense, while CTrOs may share a wide and deep level of business knowledge and experience, how they came by that knowledge and experience is uniquely tied to that individual’s career path.
Simon Wallis came from a marketing background that led to Divisional MD roles but found his work extending beyond that remit. When his employer decided to create the CTrO role he was the outstanding candidate for the role because of his understanding of the organisation’s operations. Similarly, Nigel Fletcher’s career saw him take on ever-larger projects, but in a different function. He worked extensively on transforming Tesco’s HR function before moving into his role as Group Executive Director for Business Improvement at Pets at Home.
Alongside gaining as much experience in as many organisations as possible, Alan Guthrie advises aspiring CTrOs to get an MBA. Alan feels this enabled him to learn the hard skills and knowledge required for running a business beyond his in-role experience career development. One of the most important learning points, argues Guthrie, is how to persuade and manage diverse business leaders in a respectful way. “You need to know how to challenge people,” he remarks, “and that’s not always easy.”
While some may regard aspects of the CTrO’s toolkit as ‘soft skills’, Aurelie Canales regards qualities such as high EQ and persuasion as hard skills. These are not skills she was born with, she argues, they are skills she has learned and developed through real-life experience. These skills are key to getting results, rather than ‘nice to haves’.
How the CTrO’s role is positioned in the organisation is critical to the role’s success. First and foremost, the role must be at the board level and their objectives should be understood by their peers and reinforced by the CEO: “For me, having a seat on the board is a key success factor,” says Alan Guthrie. “If you’re not on the board, then at least you need to be a peer to that level of management, otherwise you’re set up for failure.”
Operating at board level means the CTrO commands a view across the whole organisation while being able to influence the organisation’s leaders across every function. They need to be able to discuss the actions required by the intended change and ensure the senior leadership of the business understands the way ahead and acts accordingly. They also need to be able to report to the CEO in an open, and honest way, reducing the risk of transformation becoming disconnected from strategy.
It is important to note that the CTrO doesn’t necessarily have sole ownership of the change process – the responsibility for what actually happens lies with their peers. Successfully performing in the CTrO roles often requires taking a step back to prevent them from over-reaching their influence or ‘standing on the toes’ of colleagues. This doesn’t mean that they shouldn’t question and challenge them to realise progress, but ensuring this is done in an appropriate way.
According to Nigel Fletcher, the CTrO needs to judge how involved they should be with specific functions and how hard they should push in order to achieve the desired change. Wherever possible, the CTrO should ‘keep their powder dry’ by not rushing in at the first sign of trouble. There are bound to be disagreements along the way, but there should be clear structures on how issues are resolved and the CTrO should not be seen as someone whose focus is on cross-functional dispute resolution.
Our panel of CTrOs also advised that, where possible, candidates should assess the business as they go through the interview process to be certain the organisation is capable of doing what needs to be done. This assessment includes people and resources but it should also cover the nature of the relationships between senior management and the CTrO themselves.
This process enables the CTrO to understand the structural capacity of the business, the culture and the implications of the change. If there appears to be any challenge here it needs to be addressed up front. In the same way, if there’s any member of the leadership team who may be in doubt about the change, the CTrO should attempt to address this as a priority. Embarking on change with any of these elements compromised increases the risk of failure for the organisation and individual.
Positioned correctly, and with the right cultural fit, skills and knowledge to drive change within the organisation, the addition of a CTrO to a company’s board can act as a catalyst for significant, and successful, transformation. Depending on the objectives of the business it can mean the successful implementation of new technologies and/or operating models that improve financial performance, drive productivity, develop company culture and enable the business to work more coherently together whatever the challenges that lie ahead. A positively functioning CTrO is one who commands respect from the business’ leadership around them, but who equally gives respect to those leaders, supporting and aiding them in their work for the good of the entire organisation.
Our CTrO series continues in Part Two: Defining, performing and positioning. What makes a Chief Transformation Officer successful?
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