Beware evangelistic transformation hype…
Change without governance brings uncertain results
So you are planning a transformation – a new customer focussed culture, a flash new brand, a smart new CRM system, some hi-powered entrepreneurial types on board to drive the message through, a re-focussed marketing group, project managers in place to create the new capabilities …what could go wrong?
It is important to firstly recognise that a programme of change is exactly that; we have to be able to scope and monitor the delivery of planned benefits that will become the end result of the programme of work. One must always be able to answer the questions:
Why are we spending this money? Is the business case robust enough? Will we get what we are hoping for? To what end? How is it progressing? Which benefits have been delivered to date?
What’s all this about governance?
Systems and general business management have a habit of running side by side… not as one! That’s where the governance really needs to come in.
None of the a-z of shortcomings can be satisfactorily addressed without a requisite governance hierarchy featuring an iterative management system underpinning decision making and monitoring regular progress towards planned benefit return. It is this governance hierarchy that will deliver planned business benefits over time.
Standards and methodology (eg: OGC/MSP) are important across the change process; so as to assist with effective communication, role and decision making clarity in the programme commissioning in the business (where the benefits are realised). Formal programmes are a key part of the overall governance system.
In these uncertain times, risk drives timely change…
We live in uncertain times. Risk, while the primary responsibility of directors in the firm, should be addressed at the appropriate levels in the firm once identified. A formal hierarchy is recommended for an enterprise-wide governance model within which risk management plays its central part. The treatment of risk (threats & opportunities) throughout the various levels is fundamental and delegated responsibilities must be regulated within the particular business unit or control group (eg: steering committee) involved.
Whilst it is easy to articulate different types of risk: strategic, change and operational (M-o-R, OGC UK standard) that serve this, it is clear that change is always pervasive throughout the business and its treatment should be driven from the top of the organisation using the change programmes (for example) and managed at appropriate levels in consultation. It is important that a consolidated view of risk should be taken across its various disciplines (not a silo locked approach). Risk should be managed as an iterative cycle within governance processes at appropriate levels. Decisions about risk/opportunity at the strategic level should never be delegated.
Systems theory, Management & Governance
Systems for information dispersal, decision making and approval are vitally important within periods of rapid change and indeed it is not easy to separate all day-to-day activities from overlaid change initiatives. There is instead a distinct interplay here that cannot be ignored. Systems theory always formally recognised this! Disappointingly, we have not ever had great success in building effective decision support systems at the highest levels in the business that reflect the consolidated ‘status quo’ of the ‘total system’. A ‘single source of truth’ the idealists tend to call it. Indeed, it takes a new ‘top level view’ in order to serve the transparency, accountabilities and interplays that should be present so as to effectively serve enlightened decision making and measured benefit realisation.
Assuring the value return of our businesses
The primary task of governance in relation to change is to ensure that business benefits are articulated in the business case. The best way to avoid risk in the programme is to fully scope out the foundation case and ensure that all related players are in strong agreement. This is the only acceptable platform for a clear ‘go’ decision for a major change programme.
A transformation programme should reflect business unit line items where the benefits will appear so the interface to finance is fundamental on major programmes. For instance, if the transformation programme is designed to boost customer service/sales, then revenue should be expected to go up within certain business units. The programme should specify every intervention in the business that will bring this about and the transformation leader should ensure inclusion in the budgeting cycle.
Is alignment of behaviour important in this…?
Yes it is! There is a presumption emanating from the corporate world (based on empirical evidence dating back to the 80’s) that major organisational change can be effected purely by an appropriate leadership style (transformational, the case in point). Given the number of failing programmes today …this is clearly not working.