Charles Darwin wrote: “It is not the strongest of species that survives, nor the most intelligent, but the most responsive to change.”
More ominously, General Electric’s Jack Welch said: “Change before you have to”, with Virgin’s Sir Richard Branson adding: “Every success story is a tale of constant adaptation, revision and change. A company that stands still will soon be forgotten.”
Transformation programmes are the vehicle by which organisations try and deliver this adaptation, preparing them for ever-changing business and regulatory environments, and hopefully giving them business advantage.
These programmes invariably fall into three categories that are designed to:
- Keep the lights on – carry on supporting the enterprise in what they currently do, but faster and cheaper
- Increase efficiency – deliver the same or an improved outcome/product by radically changing how they do it
- Transform the business – fundamentally change their organisation to deliver different products, for example Amazon Prime from pre-paid package delivery to online streaming service.
With very few exceptions, most enterprises are in the midst of or planning business transformation programmes. These transformations range from changes to specific business functions, for example human resources transformation to customer-facing changes, such as retail transformation, through to the current omnipresent digital transformation.
Buy-in to these weighty business undertakings is preceded by significant analysis of markets and the business environment, insights on future trends from research bodies, visioning and positioning by strategic advisers, as well as a degree of crystal-ball gazing. This culminates in board-level presentations and business cases with clearly defined shareholder value and return on investment (ROI).
The board approves it – then it has to be delivered.
The majority of organisations surveyed are simply trying to tackle too much change at any one time
In a survey conducted by P2 Consulting, a specialist project and programme management company, we focused on how good organisations are at delivering shareholder value from the investments they make in business transformation programmes.
The results from the survey are available to download from www.p2consulting.com. Analysis from the survey, provides a new framework for organisations in determining how best to increase the ROI on the cash invested in transforming their businesses.
The survey focused on the four key phases of the investment life cycle:
- Back the right ideas – how good organisations are at selecting the right strategies and opportunities
- Set up for success – how well organisations plan, mobilise and organise these ideas into solid, tangible initiatives
- Execute with excellence – does an organisation execute these initiatives/projects well
- Reap the rewards – what result does an organisation derive from these initiatives and how well do they drive out value to the business.
The clear, unsurprising findings were that high-performing enterprises have strong leadership and are adept in all four of these life-cycle phases. Importantly, on delivering a transformation programme, these enterprises have inspirational leaders and are geared up to drive out the benefit and gain maximum possible value from each programme.
However, most enterprises are strong in only one or two phases across the investment life cycle. To improve performance, it is imperative that organisations understand and accept their weak spots, improving their competencies as a priority and focus on promoting the areas that will provide the biggest improvement in ROI.
The majority of organisations surveyed are simply trying to tackle too much change at any one time, without the capacity or management mechanisms to control these transformation initiatives effectively, let alone drive out the full business benefit.
To address this, in addition to exemplary project and programme management delivery, strong portfolio governance is a pre-requisite, not just in taking the ideas and turning them into winning outcomes, but in prioritising the most valuable initiatives and taking bold decisions to trim the portfolio to meet the capacity of the enterprise.
Leadership like this is needed throughout a transformation programme’s investment life cycle to deliver success for both the programme and the enterprise.