Improve your chance of transformation success with program management
Change is relentless, massively outstripping many organisations’ ability to keep up. Technological innovation, regulatory changes, pressure from activist investors, and disruptive start-up entrants are just some forces affecting companies – even those in historically less volatile business sectors. On top of this, COVID-19 has ratcheted things up to breaking point in many cases.
Organisations that try to address these changes incrementally are being overly cautious. They need to adapt fast to exploit new business models, strategies, technologies, environmental events, or even alternative ways of running their business core, business strategy or their entire operation. They need to transform.
Unfortunately, transformations are complex; often involving an intense period of cross-cutting activity coupled with seismic shifts in ways-of-working that require initial nurturing, followed by a longer period of maturation. Significant upfront investment may be necessary, benefits and value creation can happen way downstream, and success depends on those that sit outside the program team.
In this article, we look at three ways to improve your chance of successful transformation:
- Holistically evaluate your transformation ecosystem
- Treat your transformation as a program
- Set-up your program for transformation success
We conclude with a case study of an Amplify-enabled business transformation in the Energy sector.
Holistically evaluate your transformation ecosystem
It is important to understand the transformation ecosystem, comprising the external and internal context that provokes a company’s response. We sometimes express this as a Target Operating Model (TOM) or a ‘desired future state.’ The TOM leads to the development of a transformation program designed to deliver it.
Figure 1. The Transformation Ecosystem
The purpose of the TOM is to articulate the future organisational structure, its working practices and processes, the information it requires, and the technology that supports its operations. Technology alone is never enough. The simple adage ‘old organisation + new technology = expensive old organisation’ that I first encountered over twenty years ago holds true today!
The TOM describes the end-state that will exist after the transformation has finished, including roles and responsibilities, culture, processes, technology, infrastructure, information and data, and knowledge and learning. Let us consider each of those 7 aspects:
- Processes: Working practices, processes, and detailed process steps (including performance measures). Besides the steps in each core process, consideration should be given to those that guide and enable transformational change.
- Culture: The key elements of organisational design such as the culture, ethos, and style of the organisation. What will the values of the organisation be in the future? Will they change?
- Organisation: The capabilities that will be required. How will they be supported in terms of organisation structure, staffing levels, roles and responsibilities? What training and competences we need for each role?
- Technology: Technology of all types, including IT systems and the tools needed to support people to work effectively in the future.
- Infrastructure: Physical infrastructure such as buildings, equipment and machinery, and the accommodation and workspaces needed for the new organisation structure to work well.
- Information and data: The information and data required for future business operations and performance management, along with the possibilities of accessing data to produce valuable knowledge that was not previously possible.
- Knowledge and learning: Easy access to knowledge embedded in their processes, people and information, and the ability to curate knowledge and learn from it.
Treat your transformation as a program
Figure 2. Transformation program planning in Amplify
Effective transformations require coordinated resource management, funding and business change to realise benefits and achieve strategic objectives. They typically involve prioritisation, sequencing, and delivery of multiple initiatives to realise the targeted future state. In short, transformations need a plan – to steal an old quote, “a goal without a plan is just a wish.”
An effective program provides the structure for transformation execution. Program plans are used to define the specific arrangements for implementing strategy and for directing the team. They answer key control questions such as ‘who’, ‘when’, and ‘how’, necessary to ensure that vital work is done to deliver the outcomes of benefit.
Many organisations want to innovate and transform, but they do not know where to start and turn their ideas into reality. In Amplify, we frequently leverage a program delivery lifecycle that supports transformation through a tried and tested six-stage iterative process, shown in the figure below:
Figure 3. Six stages of Amplify Program Delivery
- Align and configure program: Set program goals, define the structure, identify the team, and assign roles
- Define initiatives and benefits: Identify benefits and enabling initiatives (with risk-adjusted costs and initial timelines) to achieve program goals
- Optimise initiative portfolio: Build scenarios and evaluate them against program goals and constraints – including budget, risks, and assumptions
- Enter program updates: Update plans and actuals and track the progress of initiatives through the value delivery lifecycle and stage-gate approval process
- View and report results: Gain delivery confidence on program status through native dashboards and custom PowerBI visualisations
- Adjust based on feedback: Monitor program performance against targets for timely insight and intervention where necessary to remain on track to reach goals.
Set-up your program for transformation success
Figure 4. Program planning in Amplify
We have identified six steps you can take at the beginning of a transformation program to improve the probability of success:
- Secure top management support.
- Set clear goals and communicate them clearly to employees.
- Identify powerful initiatives with the greatest impact on a company transformation.
- Establish change management and staff training programs.
- Create a structured process, such as the Plan–Do–Check–Act (PDCA) phases of the Demingi cycle to ensure that effective implementation and continual improvement occur.
- Leverage a dedicated Strategy Execution Management tool, such as Amplify, to guide program execution and benefits realisation.
Amplify-enabled Transformation in the Energy Industry
At Amplify, we worked with a client faced with developing customer needs and a changing regulatory landscape, all amid an economic downturn and things needed to change. Operating costs were too high and needed to be cut. However, the company identified a far bigger opportunity to rethink their business and developed a target operating model to position themselves for the future.
A true transformation is a whole-of-business effort. However, the company was not set up to work that way. It was heavily siloed, lacked leadership alignment, and was unaccustomed to change.
The organisation started by setting aspirational goals for the program, in this case targeting a significant reduction in annual cost base to ensure profitability in a market where revenue was highly regulated. This drove alignment across the organisational silos and helped garner executive support.
Next, these goals were communicated throughout the organisation – there was a significant emphasis on achieving buy-in from the top to the bottom of the organisation, including solicitation of savings ideas from all employees. This helped build a sense of ownership by all parties who became invested in the transformation’s success.
Next came the nuts-and-bolts of execution – identifying initiatives, KPIs, governance structures, resources, reports, etc. to guide the identification, planning, delivery, and benefits realisation from the transformation program. The program team was established, and a steady stream of initiatives captured and appraised for their contribution to achieving transformation goals.
Amplify was a vital enabler of the successful execution, with a central repository of initiatives, cross-functional dependencies, and business impacts. The client Transformation Office, equipped with Amplify, could redesign their delivery strategy resulting in benefits being realised earlier and more often, with increased bottom-line impact.
- An effective organisation restructure and successful change program
- Enterprise-wide engagement and culture improvement
- $350m reduction in the annual cost base
- Increased capability and improved performance (KPIs)
For many organisations, transformation is no longer a ‘nice to have’ – it’s a must! However, a transformation is a major strategic investment with many known challenges and should not be undertaken lightly. The chances are that you will only get one crack at it. The good news is that others have made the same old mistakes repeatedly. So you can avoid them!
Against the background of a complex transformation ecosystem, we recommend developing a Target Operating Model that clearly describes your desired state. This can then be translated into a program providing you with a robust control environment and structured incremental process to deliver multiple inter-related projects that will ultimately yield a proper return on your investment.
Amplify’s strategy execution management capabilities and structured program delivery process have been shown to support transformations in energy and other industry sectors.
So, tell us about your transformation plans – we are here to help!
i PDCA (Plan-Do-Check-Act) is an iterative, four-stage approach for continually improving processes, products, or services, and for resolving problems. It involves systematically testing possible solutions, assessing the results, and implementing the ones that have shown to work.