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Can transformation be as easy as ABC? Changing gears from strategy development to execution can be daunting. However, by simplifying the science of execution down to the ABCs of Strategy-led Transformation we can build the businesses of tomorrow, today.
Strategy-led transformation is a proactive and purposeful approach for translating an organisation’s strategic ambition into a deliberate body of work and execution roadmap. A brilliant strategy can only be realised through effective execution. For some a strategy-led transformation will encompass a portfolio of initiatives that collectively deliver their strategic ambition. In other instances, the transformation will be a program of work that fundamentally redefines the shape of the organisation.
Figure 1. Transformation Lifecycle Phases
We believe that traditional program management offices are not always focused on the outcomes that deliver meaningful change. Traditional program management limits the office’s role to tracking and reporting and often fails to influence the delivery direction. Rather a Strategic Transformation Office (STO) proactively engages with Executive Leadership teams to translate their strategy into impactful organisational change. STOs bring additional capability around problem solving, prioritising aligned to strategy, balancing trade-offs, and co-ordinating outcomes across delivery areas. The key distinction here is the STO directing and leading the transformation.
THE ABCs OF TRANSFORMATION
Successful transformation leaders must fulfill three key roles: Architect, Banker, and Conductor. These roles span the length of the transformation program however based on the stage of the program each role will occupy a different amount of the leadership’s time and focus.
While the principles that underpin the ABCs can be applied to any transformation, they are articulated here as the building blocks for successful strategy-led transformation.
Figure 2. ABCs of Transformation
Architect – Design Authority
The architect is the design authority of the transformation program. They own the future state design (e.g. conceptual blueprint) and define the design parameters for the broader program team. The architect is responsible for translating the strategic ambition into desired outcomes and then into clear delivery goals for the delivery teams. They manage the decision-making process dynamically, making concessions and trade-offs where necessary, and ensuring that the sum of these choices delivers on the stated strategic ambition. A good architect ensures clear accountability is assigned for all goals and objectives by making one Executive Sponsor responsible for each. This enables easier decision-making during the transformation. Architects should also define the measures of success that align to the strategic ambition and set transformation targets – ideally expressed in a transformation scorecard or benefits dashboard.
Banker – Value Management
The banker is responsible for managing value realisation throughout the transformation. They achieve this by aligning value targets against specific outcomes of the program, and ideally directly to specific project delivery scope (e.g. revenue from a new channel). Additionally, the banker ensures capital allocation and investment funding for projects is aligned to the strategic ambition and scope of the transformation. They are responsible for tracking program progress against the benefits ‘flight path’, and they should be able to report on the specific ‘money steps’ (milestones) the allow benefits realisation to begin. A good banker would challenge project KPIs and measures of success to ensure these are aligned to transformation targets and the organisation’s strategic ambition.
Though there are several universally applicable characteristics of the banker this role has the largest variation in responsibilities depending on the organisation and degree of involvement from the CFO. The transformation leader should carefully consider what type of banker would be most appropriate for the transformation program. For example, in a strategy execution portfolio the Banker will be involved in capital allocation and portfolio prioritisation and may coordinate investment evaluation and funding approval. Additionally, the Banker should implement strategy performance analytics, to enable the Executive team to measure and manage strategy execution. In a program style transformation, the Banker would be responsible for the program business case and funding model and measuring and monitoring of benefits realisation.
Conductor – Delivery Orchestration
The conductor orchestrates delivery through the transformation roadmap and co-ordinates communication. They aim to reduce organisational friction and teams spinning their wheels due to a lack of alignment, direction, and certainty amongst delivery teams. They are responsible for many of the more traditional PMO tasks such as managing program level governance, program reporting and tracking, facilitating decision making, and managing resource allocation. However, they also should actively shape the direction of the program through the transformation roadmap which is used to align and coordinate all project delivery plans. This centralisation can significantly streamline execution administration and enable executive leaders to focus on material outcomes that deliver the strategy. The roadmap is used to establish critical dates and milestones, define the critical path and manage dependencies. The Conductor is the central delivery co-ordinator and must manage the delivery of internal and external communications. A good Conductor ensures messaging from the program is consistent and organisation wide.
Figure 3. Key attributes for each role
THE TRANSFORMATION TEAM
While the individual roles in the ABCs framework are each important, the way that they work together is the key distinction of a strategy-led transformation approach. Building a robust Transformation Office that can deliver each role and is supported by a leader that can direct all three is critical. Throughout the lifecycle of the program each of the three roles will hold the spotlight at different moments. At the beginning, the “State Ambition” phase, the Architect drives alignment within the Executive team. This is a defining milestone in setting up the transformation for success. The Transformation Leader must be wholly committed to the strategic ambition, and singularly focused on achieving this objective. Strong communication and influencing skills are critical to manage senior stakeholders and address organisational resistance.
As the program progresses through “Deploy and Execute” and “Realise and Optimise” the Conductor will play a larger role. This waxing and waning of focus is shown in figure 4. Throughout, the Banker will measure and monitor success to ensure the program is tracking to deliver the expected financial outcomes.
Figure 4. ABCs Across the Transformation Lifecycle
Traditional PMOs can be singularly focused on tracking and reporting and fail to influence the direction of the transformation. It is akin to driving by looking through the rear-view mirror, reacting to what has occurred and failing to pay attention to what is ahead. Whereas an STO will proactively find and resolve problems before they become roadblocks for delivery teams and provide options for Executives to react to before they become delivery issues. The ABCs are the building blocks that direct an effective STO allowing the Executive to look ahead and drive the organisation forward, becoming a business of tomorrow.
Morne focuses on strategy-led transformation with a keen interest in strategy execution. Morne works directly with executive leadership teams and transformation officers to execute the strategic ambition of organisations. Morne has a hands-on style and works collaboratively with clients, and actively works to embed capability with his clients. He brings a strong value realisation lens to delivery and embeds benefits realisation and performance analytics into strategy execution.
Alex is a Director in Deloitte Consulting’s Strategy practice - Monitor Deloitte. He has helped clients solve strategic issues at the Board and CXO levels over the past ten plus years, with a market focus on shaping the most pressing market issues in Telco, Media and Entertainment and Consumer. He specialises in formulating corporate and business unit strategies and designing enterprise wide business and operating models, helping organisations address their most complex problems and make better-informed choices. As the world becomes more volatile, open and networked, he believes that the role of strategy has moved from defining and defending a long-term position into a constantly evolving dialogue. Collaborating with designers and tinkering with emerging technologies, he infuses analytical approaches with creative mindsets to ultimately create and design businesses, organisations, and societies of the future.
Tessa is a consultant in Deloitte’s strategy practice, Monitor Deloitte. She focuses on strategy-led transformation, helping organisations realise their strategy through large-scale transformation programs. She has delivered project management support for a variety of clients including major Australian banks and global automotive companies. Tessa has further experience in corporate and business unit strategy development, and operations model optimisation. Tessa has a Master of Management from the University of Sydney Business School.