At Deloitte, we work with business-driven, technology-enabled transformation every single day, which is why I’m proud to share with you some of the key findings from our most recent study on the matter: The 2022 Chief Transformation Officer (CTrO) study carried out by my American colleagues at Monitor Deloitte.
The study is interesting for a number of reasons. Firstly, more and more companies see transformation as an enterprise capability for continuous change rather than a response to individual events. Today’s leading companies view societal, economic and technological disruptions as an opportunity to transform themselves via supercharging innovation, accelerating growth or radically simplifying operations.
Secondly, it’s becoming more and more common to appoint a dedicated transformation leader (for example Chief Transformation Officer, VP of transformation etc.) with a transformation management office (TMO) to support them. We see this trend in both global and Nordic companies, all aiming to maximize the probability of success.
Thirdly, the survey shares insights from more than 300 executives across a range of industries and geographies and sheds light on what it takes to design transformation programmes effectively. What’s more, the respondents have extensive transformation experience, with more than 75% of the group having overseen three or more enterprise transformation programmes during their careers.
Why do companies transform?
The first question we asked the 300 CTrOs was what their companies want to achieve through transformation – and secondly, the catalysts behind those ambitions.
The answers show that the most common ambition is expanding the business, such as entering adjacent markets or launching new business models. This is followed by optimising the business and keeping pace with the competition by improving operations and digitising. Re-imagining the business, such as going after an entirely new customer or market segment comes in third.
In terms of what triggers transformation, the respondents cite a number of both internal and external catalysts for transformation, including:
- Digital technology opportunities (51%)
- Operational process inefficiency (51%)
- Restructure for growth (48%)
- Fundamental market shift (32%)
- Outdated technology (31%)
- The threat of new competitors (31%)
- Changing consumer behaviour (30%)
- Cost structure (29%)
- Stagnant growth (29%)
- New leadership (26%)
This all makes sense in today’s volatile business environment; however, ironically, transformation leaders consistently report underinvesting in talent, change management and communications when reflecting on their investments. 52% of respondents believe they underinvest in talent, and 34% believe they underinvest in change management and communications initiatives. Our experiences confirm that executives typically under-resource the softer side of transformation programmes, which often leads to downstream challenges with behavioural change, confidence in the programme and clarity of vision.
The CTrO role is evolving
All of these challenges call for experienced, innovative and purpose-driven CTrOs that dare to think big while also caring for detail and structure. Therefore, the CTrO/Transformation Executive must play multiple roles, including:
- Strategist (big-picture architect)
- Operator (skilled general manager)
- Technologist (platform and tech architect)
- Controller (financial custodian)
- Change Champion (people-oriented storyteller)
- And finally, CTrOs also act as politicians, managing other executives who are either unwilling or unable to change.
With these very different roles, there is clearly no universal career path to succeed as a CTrO. For example, among the survey respondents, 25% came from information technology, 23% from sales and marketing and 19% from general management while the rest came from finance (9%), product development (8%) and supply chain (6%). While functional knowledge doesn’t determine success, we find that successful CTrOs have a range of experiences and are able to navigate multiple functions effectively. They are also leaders who are self-aware enough to know their limitations, convene the right people and delegate effectively.
The way forward
Ultimately, the stakes are always high with transformation. While every organisation faces unique complexities in the programme design and execution, our findings offer insights into the predictors of success and the lessons learned by transformation executives. In short, our key takeaways for companies starting a new transformation programme or navigating an existing one are to:
- Layout a clear, concise, forward-looking vision for the enterprise
- Commit executive time to the transformation, from the CEO and CTrO down
- Plan for a meaningful investment across multiple years
- Create an empowered, cross-functional transformation management office
- Engage subject-matter experts as needed
- Prioritise the talent agenda
- Invest in change management and communication.
As you all know, bold transformation programmes can significantly alter the trajectory of a business. However, to do so, they require the orchestration across multiple functions or even the entire enterprise spanning across strategy, talent, processes, operations and technology. Most of all, they require strong leadership, which is why successful organisations recognise the need for an ‘always-on’ transformation capability as well as dedicated transformation leaders.
Forfatter spotlight
Tore Christian Jensen
As a part of the Strategy & Operations practice Tore has worked with analysis, development and implementation of operational strategies. Tore has deep experience with aligning business models to changing market demands through optimisation of business processes and aligning systems, organisation and governance accordingly. He has industry experience from manufacturing, transportation, consumer products and energy. His main focus is on on the operational core processes but he also covers administrative support processes. As a program manager Tore has been leading transformation projects for international clients heading multiple parallel projects and reporting directly to executive committee members. His responsibilities cover everything from initiating assessments, identifying opportunities for improvement to building business cases and following up by designing solutions and driving teams through implementation.