Pattern recognition on business transformation risks
We were recently asked what key risks you should look for when embarking on a major business transformation. Karen Thomas-Bland, founder at Seven, a business transformation consultancy based in London, talks about the top 10 priorities.
1. A declared ambition
The transformation ambition set isn’t big or aspirational enough. It should be one of the organisation’s top priorities. It’s important to check if the organisation is aiming high and check how ambitious, urgent and sustainable it is. There should be a declared and communicated end state, with clear measurable outcomes.
2. Value case validity
There isn’t a robust value case you are tracking on. It is important to have checked all value creation levers and prioritised growth, profitability, capital efficiency, strategy and business portfolio, and ensure initiatives will deliver the value you expect from them (typically they deliver less than estimated). It’s important upfront to do a private equity style due diligence to figure out where value is flowing.
3. Leadership buy-in
There isn’t leadership and sponsorship from the board, executive and those in functional and regional leadership roles. Any transformation should take up significant leadership time and attention and all roles should be pulling in the same direction.
4. Compelling narrative
A compelling narrative to engage the organisation isn’t in place. This is the importance of the ‘why?’, being able to articulate in an authentic way why we are undertaking the transformation to create followership. If the transformation story is compelling, then there will be significant energy and momentum around it.
5. Leadership roles
There aren’t clear roles defined in the transformation that have a good mix of IQ and EQ. There is a big difference between the skills needed to transform a business and lead a business.Warning signs are leaders not spending sufficient time or they are spread too thin and don’t have the capacity to contribute e.g. have they stopped non-priority activities to create headroom?
6. Change management plan
There isn’t a plan to manage and control. A robust change management plan is needed built around changes to be implemented. A change management plan defines activities and roles to manage and control the programme.
7. Operating tempo
There isn’t a drumbeat in the organisation built around tracking and capturing value from the transformation efforts. A weekly operating cadence is needed and you need to avoid this being delegated down the organisation. It’s important to ensure there is an execution engine to embed the change.
8. Skill sets to transform the business
There isn’t a broad blend of skills needed in the transformation. It’s important to check they are represented in the transformation team: strategy, finance, communications, operations, organisation design, development, change, process, technology and project management and integration, as examples.
9. Culture, behaviours and incentives
They haven’t been addressed early in the transformation and are positioned too far down stream. Change is uncomfortable and you need to address fear and resistance early on and revisit it. The culture and behaviours need to be addressed upfront and clearly defined. Throughout the programme, it needs to be reinforced and rewarded.
This isn’t sufficiently leveraged across the transformation. Whether this is value case tracking as part of the PMO, diagnosing skills and behaviours, nudging behaviours to create habits, it provides the ability to scale programmes globally and drive the real time data needed to adjust approaches based on what is and isn’t working.
Based in London and with over 24 years’ global experience, Karen Thomas-Bland is often cited as one of the top business transformation consultants and coaches in the world. She is a trusted advisor to boards, executive teams and investors, creating sustainable, long-term value for FTSE/Fortune businesses and PE funds. She writes for many publications including The Times, FT, Association of MBAs and Management Today.