Successful transformation has long been considered the holy grail of the business world, and it’s easy to see why. Years of research from McKinsey has demonstrated that the failure rate for widescale business change is consistently greater than 70%, with commonly-cited roadblocks including a lack of engagement, improper expertise, and insufficient communication. After a protracted period of operating in stabilisation mode over the pandemic, business leaders have been increasingly turning their attention to growth and transformation to ensure their organisation’s long-term survival. Figures from 2021 suggested that 68% planned a major investment in data and technology in the next 12 months, and 61% planned to undertake a major transformation initiative. Now, as 2023 unfolds, entire industries have found themselves faced with the need to transform their businesses in the face of tremendous unknowns including rising inflation, a higher cost of living, and a troubled economy.
With all this in mind, as part of GRG Executive Search’s recent Transformation event, we brought together four thought-leaders in the change and transformation space to explore how organisations can lay the groundwork for a successful business transformation in challenging times.
Shahzad is an experienced C-suite executive holding roles as CEO/CFO/COO/CPO and specialising in cost transformation, turnarounds, D&I, recruiting and nurturing talented teams. He has significant experience in global transformation projects, is a passionate ED&I advocate.
Jill is a transformation professional with experience across a broad range of sectors including banking, engineering and aerospace, and is a specialist in acquisitions, joint venture set-ups, mergers and divestitures. She has significant experience holding lead blue chip and government roles in Europe, Asia & North and the Americas.
Simon combines commercial CFO experience with over 15 years’ hands-on transformational leadership of shared and global business services for five world-class global companies. He has experience in multi-national organisations and is recognised as a successful strategist and a pragmatic implementer of new operating models.
With over 20 years of blue-chip experience, Sheryl Miller is a transformation director and the founder of Reboot Global, an organisation which delivers C-suite coaching and retreats. An esteemed equality, diversity and inclusion (EDI) consultant, Sheryl is also the author of ’Smashing Stereotypes: How To Get Ahead When You’re The Only____In The Room.’
The Value Of Effective Communication
Research has consistently demonstrated that two major barriers to a successful transformation are poor communication and engagement, and absent or ineffective leadership. In fact, a study by McKinsey found that companies with effective communication during transformations are 25% more likely to be successful than those with poor communication. For Jill, this all comes down to ensuring everyone’s singing from the same hymn sheet. She explains, “For me, it’s all about language. You might say, well, we’re all speaking English. But actually, I quite often see people talking at odds: maybe someone has a different background of expertise, or maybe they take a fundamentally different approach to others on the team. Either way, differences in communication need to be reconciled. Another example is, in IT we’re prone to using jargon, so sometimes there’s a need to really simplify communication to ensure everyone understands our key objectives and can clearly speak about them”
Steering Success: The Importance Of Good Governance
Governance brings specific structure, direction and accountability to business transformation. It involves setting clear objectives, defining roles and responsibilities, establishing decision-making processes, and creating a framework for measuring and monitoring progress. For Shahzad, ensuring an organisation has all its ducks in a row at the outset of a project is essential. He explains, “Before anything else, you need to be very clear what the problem statement is. Understand your objectives, and ensure you have the correct scope. Do we have a clear mandate? Do we have the right level of sponsorship, from the right people? If you don’t have those things at the beginning, things are going to fall apart very quickly.”
“In terms of the project itself, you need to have a detailed plan, with a clear critical path, resources and costings, and ensure you’re clear on what you’re trying to accomplish. Thereafter, it’s about following that journey and tracking those things along the way.”
For Sheryl, the most effective form of governance varies depending on the organisation. She explains, “I think it’s really important to ensure the style of governance fits the culture. Some organisations are a lot better with structure and discipline, the templates and the form filling, and then others can be a little bit more fluid, but they still get things done. It’s different strokes for different folks.”
Turning Risks Into Opportunities
All transformations must come with a level of risk, some more acceptable than others. At its core, risk management during business change involves identifying potential hazards, evaluating their likelihood and impact, and developing strategies to mitigate them. Such assessments help to minimise the likelihood of project delays, cost overruns, and other unforeseen complications. For Jill, successful risk management hinges on spreading the burden of responsibility, along with implementing effective early warning systems. She explains, “It’s important to ensure the risk isn’t all on the portfolio manager, the programme manager or even the sponsoring executive. Instead, it’s about ensuring the risk is shared throughout the organisation with key risk owners.”
She notes, “I’ll also nominate key stakeholders to act as ‘sentinels’ – these are the people that will be the eyes and ears. They’ll be looking externally, looking up, looking down, and essentially creating a protected space around the transformation. Once numerous sentinels are in place, one effectively has a spider’s web which will help you realise quickly if there is a risk headed your way.”
Additionally, Simon explains that being too risk-averse can be just as detrimental as taking risks that are unnecessary: “Trying to nullify and mitigate every single risk will ultimately drive you crackers, so it’s important for programmes to gain some clarity surrounding what the acceptable level of risk is. After this, it’s about understanding that assessing risk isn’t a one-time event: you need to take a high-level view, and be reviewing constantly.”
“We’re Gonna Need A Bigger Boat”: Internal Or External Transformation Talent?
Whilst undergoing transformation, organisations must consider whether to utilise internal teams or hire external talent to help to build capacity and expertise. External expertise can provide valuable insights and skills that may be lacking in-house, whilst utilising internal resources can be a valuable cost-saving measure.
Sheryl notes, “There’s a school of thought that says if you can, you should use internal resource because these are the people who really know the business, and can gain buy-in. But what I always ask is, is the capacity there? Often, internal teams are already stretched, and you may be asking them to add even more to their workload. If that’s the case, it could be wise to consider external resource. You should also be asking whether a project requires special skills that only external expertise can provide. Ultimately, it depends on how big and how complex a transformation is. It’s like that line from Jaws, ‘We’re gonna need a bigger boat!’ – well, sometimes the exact same principle often applies to transformation projects!”
Shahzad notes that even if an organisation finds themselves often relying on external talent, with careful management, it’s possible to make the transition to using in-house resources instead: “When I was at BT, at one point we were spending several hundred million a year on external consultants. As the incoming transformation director, I wanted to move away from that and build up our in-house capability. So, over the course of the next few years, I started to build an in-house team, and we taught them all the skills they needed. Bit by bit, we weaned ourselves off the external consultants to the point that we were only spending tens of millions instead on tax, reg, pensions – specialist areas. Beyond that, I would only use external consultants to freshen things up and give me new perspectives. We found that blend worked extremely well.”
Finally, Shahzad comments, he found great value in ensuring external consultants shared their knowledge with the internal team, in order to provide opportunities to learn and upskill: “If we hired someone to come into the business, the last thing I wanted was for them to take all that knowledge with them when they left. Instead, I ensured that relevant skills were shared, and really absorbed into the business to be used moving forward. That strategy can really help to set you up for success in the long-term.”
GRG Executive Search can provide the Transformation talent you require to guide your business through times of uncertainty. For a confidential discussion about how we can help, contact our Associate Director and specialist in Transformation talent Hayley Smith on firstname.lastname@example.org. To find out more about out upcoming events, contact us on email@example.com.