If your business is beginning a transformation journey, already in the deep end of one, or are staring down the prospect of having to reprioritise and restart, Seven Founder, Karen Thomas-Bland, has six key areas to focus on to maximise your chances of long-lasting success.
Embarking on a digital transformation is one of the most critical decisions a CEO will ever make. Yet, whilst we know that a comprehensive approach to digital transformation is conducive to lasting change, the average success rate has remained frustratingly low.
I recently talked to an organisation which had been on a transformation journey for the last three years. Having concluded they did not have the right approach and resources, they needed to start again. When probing a little further, a few risk factors came to the surface. They were asking people to do the transformation on top of their day jobs; they hadn’t put their money where their strategy was and fully backed the new direction of travel by reallocating resources and hadn’t set a high aspirational bar that felt uncomfortable. There was also an inertia setting in around a few pilots that hadn’t led to widespread roll out. These are all very real dilemmas organisations face when embarking on a digital transformation.
Yet the need to transform hasn’t gone away. Markets are still becoming saturated, products are reaching the end of their lifecycles, the productivity frontier is closer than ever in some industries where you see capital efficiency declining and the existing business is losing its strategic assets. The heart of the issue, then, becomes how to ensure the right balance is struck between transformation priorities and continuing to operate the business. There are several steps worth considering if you are embarking on or refreshing your digital transformation.
1. Commit to Transform
Affirm your conviction that the business needs to change and establish the transformation as a higher level of performance. Tempting as it can be, the framing is not really about a project, even though a project structure is needed. If the transformation feels readily achievable, it’s a sign you are not pushing hard enough. It needs to feel uncomfortable but, at the same time, realistic enough that it’s an inspirational ambition for your organisation. A pivotal moment is when, as CEO, you deliver the “battlefield cry’ to engage and mobilise the business. At this point, it’s about signalling your intent on how you intend to operate the business and transform it in parallel.
2. Eliminate Initiative Overload
Transformations absorb a significant amount of leadership and project team time. If your transformation is not in the top set of priorities for the organisation, it risks not receiving the time and attention it deserves. The acid test is ‘Have you worked through and reconciled your portfolio of activities and actively stopped, reprioritised or refocused initiatives that don’t ladder up to your transformation ambition and value case?’ If the headroom hasn’t been created upfront, it will feel like just another ‘add on’ to an existing set of initiatives and risks overloading the core business.
3. Lead by Example
People take cues on how important something is from their leaders. If they are being asked to do something off the side of the desk, then it can easily be de-prioritised. Building execution discipline from the start by focusing on the immediate activity is one good step. Transformations aren’t fleeting activities; you have to be in them for the long haul. Managing the ebb and flow of the transformation and understanding when to go fast versus when to give teams time and space to rest, recover and regroup will provide the best results and keep employees from burning out.
4. Size and Resource It
You will no doubt have heard the commentary ‘we’re at quarter-end’ from the finance team or the sales team, who will say, “It’s too busy – we’re trying to close the month”. Transformations need input from people already doing big day jobs. Before starting out, really size the effort – what is it going to take to make this change work and achieve the value case you have set out? Work out what activities and resources are needed on a full-time and input basis. Internally, put your best people on to the transformation path and invest in people and culture from the start. Make engagement personal, so people in the company know why it is transforming and how and when they will be engaged. Finally, build in as much flexibility to your new execution discipline as possible to help weather future challenges.
5. Build an Execution Engine
A successful transformation involves a series of well-sequenced small steps, building out proof of concepts, piloting them, syndicating those that prove the business case and then implementing them at scale. Making this happen requires having an execution capability set up to deliver change at pace into the business, with the proper supporting infrastructure, including capabilities, processes, technology and data. Technology is your friend when it comes to scaling your transformation effort. You won’t reach everyone in a business without having a platform to support people connecting and collaborating. It’s worth spending time to figure out how this will work upfront – the days of connecting via PowerPoint presentations are gone and won’t create the connected culture or speed you need.
6. Tie Incentives Directly to Transformation Outcomes
Include performance metrics beyond financial impact and tie incentives to transformation outcomes. Many transformation incentive programmes focus solely on financial impact, but also include customer experience, organisational health, behaviours and skills, and social and environmental impact. To successfully de-risk the development of new business models, you need a system in place which strategically identifies what areas you want to test, mechanisms to test them, and a framework to measure the impact. You then need regular milestone metrics that identify whether it’s something to double down on with extra funding, or whether to stop it and reprioritise.
Overall, taking these steps will help in actively managing your portfolio to search and develop the next generation of business models to drive growth, whilst still operating your existing business.
ABOUT OUR GUEST WRITER
Karen is a Global Board Level Advisor, Partner level Management Consultant and Non-Executive Director with over 25 years’ experience in creating break-through strategies, transforming, and Integrating organisations to a $105bn turnover. Her interim and consulting clients over the last eleven years have included Accenture, Microsoft, EY, Invesco, National Grid, RELX Group and PE funds.