In the first article of our series about transformation, we introduced a few guidelines about transformation and presented the five main reasons to launch a transformation. Now, we’ll present the framework commonly used to execute transformations.
What else is transformation if not the execution of a change in strategy? Naturally, both Strategy and transformation need to be aligned. A transformation program follows the strategic planning framework that we recommend to our clients during our management consulting engagements.
In the coming lines, we will explore each phase as well as share our insights about recommended governance.
1. Decide to launch a transformation program and design the target vision
How do you want your organization to look in 3–5 years? Not an easy question! You need to understand the main trends, the competition, and the capabilities of your own organization. Even if insights are available, they will never be 100% accurate or exhaustive, as anything can happen (global recession, trade war, new regulations, political instability, etc.). Building a consensus around the target vision and deciding to transform the organization to reach this vision is the first phase of transformation programs.
Sometimes it takes time between deciding to transform and agreeing on the future vision. So, some organizations decide to separate these milestones to enable reaching a consensus between decision-makers.
This phase is fundamental to the success of the transformation, so rushing into finalizing it is not recommended. It’s important to make sure of the buy-in of most stakeholders. Their support will be needed when the time comes to make painful structural decisions.
2. Set numeric goals to measure the success of your vision after the transformation
Goals are about translating the vision into figures, but they are not only about the expected financial performance. They should include numeric targets for human development, change of culture and expected growth, customer experience, and operational excellence. Do these topics seem familiar? Of course! These are the four perspectives of the balanced scorecard. There is no point defining a goal that won’t be tracked and monitored using regular reporting. That’s a golden rule.
The number of goals can vary depending on the size of the organization and could range from 20–30 for an SME to 200–250 for a market leader.
Another golden rule: Each target in the set of goals needs to be attributed to one distinct person, who would be responsible for reaching this specific target.
3. Build the strategy to reach goals, and design the transformation roadmap
Transformations mobilize important human and financial resources. Depending on the readiness and size of each organization, transformation programs need relatively long periods of time to be completed. Otherwise, they cannot be called transformation programs, just groups of projects.
Designing the transformation roadmap is a critical task, as it defines how the organization will invest and mobilize its resources for several years ahead.
The design aims to determine the transformation workstreams in terms of scope, timeline, and deliverables, with the objective of covering all defined goals.
This is, of course, designed on a case-by-case basis, but best practices imply that it’s best to start with low-hanging fruits to score early successes. We'll explain why in our next publication. Launching long structural workstreams depends on their priority, prerequisites, dependencies on other workstreams and the overall strategy.
A special mention for HR-related topics: The HR division is the only one that concerns 100% of the workforce, which means that transforming HR probably has the most impact on the organization’s culture and, at the same time, is the most risky, because it can provoke highly hostile attitudes such as strikes or massive resignations.
Depending on the state of internal “peace” between management and staff, transformation of the HR division can be undertaken either at the beginning or at the very end of a transformation program.
4. Execute the strategy and transform the vision into a reality
Execution or implementation is, of course, the longest phase in a transformation program. As the word strategy comes originally from military vocabulary, it’s no wonder that the key to successful execution of a strategy also comes from the military: we are talking about rigor and discipline!
This means respecting thoroughly for each of the workstreams:
planning and work schedule
scope of deliverables
program governance, particularly weekly meetings
The execution phase is highly dependent on the quality of the strategy phase. For example, if the transformation team was overzealous and promised a very fast pace of deliverables, there’s a high risk of falling behind schedule. Alternatively, if the pace of deliverables is too slow, stakeholders may lose interest in the whole transformation and reduce the priority of all transformation-related topics, which in turn will postpone the delivery of results and create a vicious circle that may lead to a failed transformation.
Correctly evaluating the workload required from operational teams, particularly IT, is key. Even if consulting assistance can boost overall manpower, consultants cannot replace internal experts for everything. Over soliciting internal experts can create many bottleneck situations that are negative for transformation.
Because of the length of this phase, many events can impact the rhythm of achievements. Therefore, the program direction and the project management office need to anticipate all negative events and perform mitigation actions. This is called risk management.
5. Adjust deliverables to match initial objectives
Imagine that you built a car, but the headlamps are not working. The car could be great, but you cannot drive it until you make sure that all its components are functioning correctly. The same goes for transformation programs: the adjustment phase is necessary to make sure that outcomes match expected results.
More specifically, transformation and operational teams continue to monitor the results of each workstream after deliverables are submitted. The objective is to confirm alignment with the initial goals. For example, if the main deliverable of a workstream is releasing a new product, transformation and operational teams will monitor the results of this product to confirm that it reaches commercial targets. If this is not the case, the team can perform adjustments such as enriching the product’s features or expanding distribution channels.
Transformation needs a specific governance
During the transformation, teams need to validate their proposals, present regular updates on their achievements, and request arbitrages. These actions are accomplished through several committees and meetings. Each committee has specific roles, responsibilities, members, and delegation of authority. For example, each workstream is officially launched by a committee called the kick-off committee.
The structure of these committees and meetings is called governance, an important piece of the transformation approach. Choosing the adapted governance is the key to optimizing the decision-making process to absorb the large number of decisions required in the transformation workstreams. Usually, the existing corporate committees are not suitable to handle decisions related to transformation, which requires creating other, parallel committees dedicated to transformation to absorb the additional workload.
After presenting the standard framework to conduct a transformation program, we will share in our next article our feedack about how staff experience transformation programs. It is what we call the reality of transformation that you will never read about in textbooks.