Transformation Definition Defines Success

Strategic value rarely comes when organizations simply release a corporate strategy into the wild and trust that disparate organizations will come together to execute on a shared vision.? Rather, organizations who truly want to see the value derived from the strategy they invested time and money to build should break the strategy down into key initiative pillars, assign influential leaders to sponsor the initiative pillars, and put the structures in place to ensure continued alignment across the pillars usually establish the necessary organizational capabilities required to see the strategy through to business value.

To put a finer point on this concept, once organizations define the strategy, they should take the time to decompose the pillars into an actionable transformation agenda that bridges the gap between strategy and execution.? Organizations that take the time to define the jobs to be done, organize the cross-functional teams that deliver the work, and put structures in place to measure business outcomes more often than not see the intended value from their strategic work.? With the jobs to be done defined, the pillar leads should find a strong program leader that can help shepherd the work across the pillars, organize routines that enable open communication / decision making across the pillars, and ensure that the pillar leaders have open and honest discussions around investment dollars, pace of work, and dependencies that arise across the pillars.? Once the governance process is defined, the program manager’s job becomes much easier, because that individual can simply facilitate the process with guiding principles in place for how the leaders collaborate to make decisions that align to the original strategic vision.

Too often organizations assume positive intent and fail to take the necessary time to establish the right processes that enable the transformation to run effectively.? When questions arise, the pillars need inputs and outputs from other initiatives to continue their work, and team members get pulled into multiple work streams that exceed their available capacity, the organization doesn’t have the infrastructure in place to make quick decisions at the pace of the transformation.? Trust across the pillar leads (assuming they exist) begins to erode and internal competition for visibility takes precedence over helping the organization succeed.? Yes, it takes time to set up the right process, rhythms and routines to truly manage the transformation, but without the structure, anarchy can set it and the value expected from the new strategy quickly evaporates.

Let’s look at two examples of transformation management, one that successfully realized strategic value and one that didn’t fare so well.

§? When done well…a large, global retailer recognized the need to transform itself.? The organization experienced many years of tremendous growth and sustained success, but as the digital economy grew, the organization and its leaders recognized the need to quickly invest in a multi-channel strategy that included a strong digital experience.? To understand the landscape, the leader team followed a very similar process that I outlined in the strategy blog last week, evaluating the marketplace, understanding the competitive threats (particularly from digital – native, low cost of entry competitors) and did their due diligence on their own short comings in the digital space.? They defined pillars, decomposed the work, and rather than simply establishing a steerco that came together periodically to discuss progress and dependencies, they actually made the Transformation update 30 minutes of every 2-hour executive leadership team meeting (CEO and his directs) that took place every Monday morning.? The CEO knew that he needed to keep his leaders aligned to the strategy and transformation agenda and wanted to facilitate open and honest discussions amongst his team when conflicts arose.? In the end, the organization made some key decisions to acquire certain technical capabilities, while building others, but in the end, the organizational leadership used that forum to build trust amongst one another, clear blockers for their teams, and question decisions that workstream leads made to ensure continued alignment at the highest levels of the organization.? And in the 10 years since they initiated their transformation, the company has doubled in size.

§? When not managed well…a global food services company recognized a need to evolve the organizational capabilities, technology enablement, and speed to value, so they initiated a transformational agenda that centered on technology modernization and field simplicity to enhance the value they delivered to their customers and employees.? While they defined pillars, they quickly assigned functional leaders to siloed pillars, asked certain teams to learn new ways of working without context, and empowered pillar leaders to invest in their work efforts as they saw fit.? Despite requests from the teams supporting the various pillars, the CEO didn’t see value in a steering committee format certainly didn’t see the value in regular ELT conversations amongst his direct reports, like the CEO in the first example.? After spending $100M and 2 years trying get the strategic agenda moving, the CEO realized that his operators had one vision for executing the strategy, his customer facing teams had another, and his technology team has a third.? Without forums to align on their disparate visions, team members got pulled into siloed workstreams that rarely included their counterparts in other areas of the organization, the business teams didn’t trust the technology teams to deliver on objectives in a timely manner (and admittedly they struggled mightily with on-time delivery), and profits the organization expected to see from the initial investments never came to fruit.? The board elected to make a leadership change, an operational expert (with strong financial skills) took over the CEO role from a customer-first leader, and the company wrote off much of the $100M investment, in a frustrating move to investors and analysts alike.

So how do organizations successfully bridge the gap between strategy and execution and ultimately realize the value they expected to see from strategic changes?? It’s really simple…take the extra time to organize the work and put rhythms in place to effectively manage the transformation.? Here are six key things I see companies that successfully transform that other organizations don’t follow:

1.?????? Decompose the strategy into pillars: Yes, it takes time to decompose pillars into initiatives, review initiatives with other critical stakeholders, and align the priorities for each pillar with the other pillar leads.? Yes, organizations that invest the time and energy in doing that decomposition work and aligning the collective leadership to those teams typically see faster speed to value, reduced delivery costs, and better employee engagement throughout the transformational journey.? Taking the time to provide clarity execution teams need to perform their jobs effectively allows them to move as quickly as the organization can move and ensures that the work they perform has value to the broader organization.

2.?????? Empower pillar leads and workstream leads to decompose jobs to be done into actionable plans: When pillar leads and workstream leads build their own plans, leaders have a much easier time holding them accountable to the outcomes they agreed to deliver.? The ability to codify your own plan, set your path, and put that plan on paper shortens the change curve for the execution teams, because they played a part in shaping the plan.

3.?????? Align on key success measures for the strategy as a whole and the individual pillars: Aligned metrics and measures ensure that you keep everyone rowing in the same proverbial strategic boat.? While organizational leaders should absolutely hold individual work streams to specific targets around progress, timeliness of deliverables, budget management, risk mitigation and ultimate business value, aligning on key metrics that drive collective success proves critical as well.? At the end of the day, all workers work to fulfill their persona needs, wants, and desires.? If their compensation is at risk for failing to help the organization (and their peers) achieve collective success, they always find ways to make sure the strategic changes succeed, even if means sacrificing on their own organizational outcomes in the short-term.

4.?????? Aggregate workstream plans into a master plan: After developing individual plans, successful organizations plot the entire plan on a single roadmap to enable two key elements: dependency mapping; and ongoing tracking.? Dependency mapping early in the process ensures that pillar leaders do not have to compete for resources, investments, and people to deliver on their shared objectives.? Mapping the potential overlaps and highlighting the impacted resources allows leaders to conduct open and honest discussions around work prioritization.? Dependency mapping also ensures that the stakeholders impacted by key changes do not reach a point of change fatigue, driven by too much change in a short time period.? Leaders can review release dates and ensure that change targets get the necessary communication and training to ultimately adopt the changes quickly.

5.?????? Establish shared ways of working and decision-making processes to quickly clear blockers: The methods used to deliver the transformational objectives matter very little.? Many organizations try agile, waterfall, and some derivation in between, all with similar outcomes.? At the end of the day, aligning on how the work gets done ensures alignment and easy transitions between work streams when teams achieve key milestones.? It also ensures that progress reporting comes to the executive team in a common format, so they have the information they need to update other key stakeholder groups.? In addition, agreeing to how the individual work streams and collective transformation leadership team makes decisions allows teams to operate quickly and enables leaders to make decisions particularly around dependent work consistently across all of the work streams.? The synchronicity achieved through aligned ways of working and common decisioning frameworks enables faster delivery and fewer cost overruns caused by a lack of progress.

6.?????? Communicate on the transformation regularly (and not just on progress): Last but not least, when organizations adopt new strategies and transform their organization, they must report consistently and frequently to keep key stakeholder up to speed on the progress of the changes.? The level and variations of reporting varies by stakeholder group, but open communication avoids questions that enable people to create their own storylines and ultimately block initiatives they don’t want to see succeed.? The ability to report beyond progress also becomes critical as time passes and dollars spent go up, focusing more on completed work and business outcomes.? Your shareholders care very deeply that the capital they invested in the organization yields returns, based on intelligent investments and top – line growth.? Employees care that the company grows sustainably, so they don’t face the rath of layoffs we saw across many companies who didn’t govern transformational spending well in the past 18 months.? And customers care that the investments make working with the organization even more seamless and enjoyable, not worse.? Finding the balance in your communications and ensuring the various stakeholder groups get the information they want when they want it proves critical to the long-term sustainability of strategy changes.

In line with the theme of this broader blog series, discipline, organizations that demonstrate discipline in transformation management generate better results that companies that choose to loosely manage strategic changes.? The intentionality put into planning delivers clarity on when change targets can expect to see key changes and allows continuous reporting on key transformation milestones.