Last week Rob Llewellyn published an interesting article on Pulse about his specialist subject, transformation management. We all know that most transformation programmes fail to some extent, either by just not delivering the kind of benefit to the organisation that warrants the blood, sweat and tears, not to mention the cost, of implementation, or even by actually bringing a business to its needs.
To illustrate the issues Rob used a great piece by Chris Bradley, Martin Hurt and Sven Smit that appeared in McKinsey Quarterly and added a useful eleventh point of his own to that article’s ten tests that you put a transformation strategy through to give you an idea of whether it will succeed. Rob’s addition was the consideration of whether your organisation has the resources to execute your transformation strategy in the first place.
You need all kinds of resources to make a strategy work. It’s not just about numbers of people, but the skills (hard and soft) and experience they possess as well. That’s why when I get down to execution, I assemble a team comprising my client’s people supplemented by specialists brought in from outside, but there’s still more to it than that because you have to also have management model that enables this mix of personnel to work seamlessly as one team.
Some years ago I partnered with Experian Clarity Blue on a project for Sky TV. The project was headed by Clarity Blue’s Tony Mooney who has gone on to become the CEO of Sky IQ. Clarity Blue were developing strategy based on complex data analysis and Tony and I frequently discussed the principles of the transformation that these strategies usually represented for the companies concerned. Tony’s view at the time was that the large corporations they were working with, by definition, lacked the flexibility or imagination to change. This is the same principle that prevents large organisations from innovating (a subject that I’ve covered in this blog extensively in the past). The larger the organisation the more dependent it is on process and process is the enemy of change and innovation.
Tony’s idea was to take the responsibility away from the organisation by creating a parallel universe. Duplicating, in effect, the structure of a business and using the alternative resource to bring the strategy to life, before finally re-introducing the original team to the transformed organisation and allowing them to run it. This is a simplification, but in Prague the innovation consultancy Creative Dock adopts a similar approach with some of its projects. I guess you’ll get the idea.
It’s my personal belief though that you can’t expect a business team to adopt a strategy that they haven’t been involved in the creation of with the enthusiasm or deliver it with the speed you need to maintain seamless progression of the business. My approach of a combined team of experts from within and without the organisation is designed to overcome this problem and affect a seamless transformation in the shortest time possible.
I recommend everyone reads the McKinsey piece. The ten questions it poses are valid and largely reflect the elements of my Brand Discovery programme. Including …
Will your strategy beat the market? which explores the need to be different one of the subjects encompassed in my “You are only as good as your next big idea” philosophy as does the McKinsey question “Does your strategy put you ahead of trends?”.
“Does your strategy tap a true source of advantage?” is about avoiding making promises that you aren’t equipped to deliver, itself a cornerstone of Brand Discovery philosophy. Improve and fill in the gaps in the resources you need to be a leader in your market, but don’t promise until you know you can do it. The Brand Discovery programme will help you with this all the way.
The new marketing #101 is about being smart with data. Collecting the right information and analysing is thoroughly. Its also about interrogating your business and understanding why stuff happens. Once of the most common causes of new business failure is over optimism, so be brutally honest with yourself, you’ll thank yourself later! Remember every business is unique and there will be things that you know about your market that nobody else does. Leverage these insights to your advantage and you can check off question 5 on McKinsey’s list..
Their sixth question is a source of challenge to many businesses that rely on process to make things happen on a day-to-day basis. “Does your strategy embrace uncertainty” emphasises the need for strategy to be flexible, which, as I have already inferred, is tough to achieve when you are process driven. In today’s customer centric organisations processes have to be flexible to achieve tailored responses to customer needs. This means a totally different approach to HR and a radically different training agenda, but it also makes giving employees the elbow room to deliver what you have employed and trained them to do. Don’t over process and ensure that any processes you do develop are flexible and constantly monitored to facilitate adaptation as the need arises. This is also touched upon in question seven “Does your strategy balance commitment and flexibility” which in turn reinforces the importance of good timing.
I question eight the article introduces the issue of optimism. This is a subject I’ve been exploring lately in connection with my work with start-ups and incubators in Europe. One of the greatest threats to the success of a new business is over-optimism. Every entrepreneur believes they have a gold-plated product and much of my work and that of the incubators and investors I encounter is concerned with testing the viability of ideas. A while ago I mentioned in another post that one of the incubators in the Czech Republic that I was talking to in the summer assessed 800 applications from entrepreneurs, but only found eighteen viable ideas among them. This is where an outsider’s perspective is invaluable, but the weaknesses in so many ideas become obvious when you take off the rose-coloured specs.
I love question nine. To me this is often the reason for failure of a strategy. Far too many CEOs are happy to talk about transformation, but in my experience, most are not willing to commit to execution. I am very often asked what parts of a strategy are optional and the answer to this is either “all” or “none” depending on your perspective. Every element will play a part in the success of your business and in today’s competitive environment no business can afford to aim for anything but the number one slot in their sector. To get there you simply have to be the best. There is no pretending, no quick fixes or Sellotape solutions. To be the best you just have to do the graft. People throughout an organisation will look to cut corners as the process rolls out and it’s the responsibility of the CEO to ensure that they are kept in line. The CEO simply has to be prepared to get stuck in on the hard stuff.
Finally question ten asks whether you have an action plan. In fact, the simplest initiative requires some kind of action plan, so it shouldn’t be a surprise to anybody that a major initiative like a transformation programme needs one too. There are action plans and action plans and those that are most effective are realistic and have some kind of process attached to them. Some years ago a strategy that I created for a major organisation was brought to its knees when the guys from a top international consultancy firm came in to manage the transformation. They had a good enough management tool, but lacked both the ability to be realistic and the tenacity to keep the process rolling. Subsequently a good proportion of the potential benefit was lost.
If nothing else, I hope that together with Rob Llewellyn and the McKinsey guys I’ve managed to raise some awareness of what transformation involves. I especially hope that we haven’t put anybody off the idea of transformation. Most businesses I come across need it to some degree. In fact every business should be in a constant state of change if it is to keep up with the rate of change in the marketplace, but please don’t enter into such a process without understanding the implications of what you are doing and before you take your first step be certain that you have all your ducks in a row and make sure that you organise your transformation process around a detailed programme. It doesn’t have to be complicated, in fact the simplest processes are usually the best, just be sure that, like Brand Discovery, it covers all the bases.
Phil Darby
November 12, 2014