Throughout a number of blogs about large-scale transformation, I have discussed specific steps that leaders should take to drive change within businesses and operations to enhance competitiveness: laying out a clear business and technology strategy defining new business models, refreshing the enterprise operating model, and implementing a digital, customer-centric technology strategy. While each of these changes demands coordination even in isolation, a comprehensive digital transformation requires that leaders commit to a simultaneous series of interdependent cross-functional changes.
One of the most common ways to structure this kind of change is through a Programme Management Office (PMO). Sometimes, these PMOs work really, really well. This is especially true when they drive an upfront, top-down commitment to transformation rigor, funding, transparency and accountability.
However, we also see some PMOs having their responsibilities limited to tracking and reporting, risk management and communications. In the worst case, because of the breadth of change and novelty of digital transformation, a limited scope can make the PMO completely helpless when it comes to overcoming the most common reasons transformations fail, including getting stuck in complexity as well as being slowed down by employee resistance, inadequate sponsorship and poor project management.
From PMO to Transformation Nerve Centre
For transformations to take hold, and for their effects to be sustainable, a transformation office needs to address the inherent complexities of a transformation, including defining the transformation ambition, scoping and planning, managing the transformation budget, and actively managing multiple workstreams and stakeholders. Indeed, the most successful transformation management offices are those that comprise both executors and strategists to serve as the transformation’s true control tower.
Many people have started to refer to these high-performing offices as Transformation Nerve Centres, or TNCs.
The primary role of the TNC is managing the planning, execution and the outcomes of digital, enterprise-wide transformation. The sheer complexity, scope and ambiguity of transformation require dedicated capabilities to architect the transformation, orchestrate across multiple intersecting threads of work, and track progress against goals.
While there are some overlaps in responsibility and positioning, a TNC has a substantially larger scope than a typical PMO. A TNC tracks and reports on progress, identifies and prioritises potential risks, and manages the transformation budget. But it also sets the transformation agenda, drives communications with stakeholders, dynamically launches specific efforts, ensures tight coordination among workstreams, and, most critically, makes the tough decisions needed to drive the programme forward.
In the worst case, because of the breadth of change and novelty of digital transformation, a limited scope can make the PMO completely helpless when it comes to overcoming the most common reasons transformations fail, including getting stuck in complexity as well as being slowed down by employee resistance, inadequate sponsorship and poor project management.
Characteristics of high-performing transformation teams
Once the goals of the transformation have been established and communicated, the most critical element of executing successful transformations is the team itself, beginning with the TNC. Teams should aim to include individuals with demonstrated leadership capabilities, excellent programme management capabilities, experience navigating the organisation, and an ability to deal with complexity, seniority and bandwidth. They should be able to innovate, invoke trust and stay dedicated to the transformation’s goals.
Moreover, our experience in shaping and supporting end-to-end transformations has helped uncover seven characteristics that characterise high-performing TNCs:
Most importantly, the TNC team will continuously use the transformation North Star and blueprint (ambition, timeline, core business models, enterprise operating model and technology architecture) to guide the tactical decisions around scope, resource allocation, budgeting and milestone planning.
True transformations are inherently challenging to manage: They often come with high expectations, tight timelines and a wealth of scepticism among stakeholders. Yet when executed to plan, a digital transformation can recast the fortunes of a struggling business, attract new customers and talent, help unlock innovation across the enterprise, encourage a culture of experimentation and build lasting operational efficiency.
A Transformation Nerve Centre (TNC) can be a critical piece of the transformation programme. The TNC creates visibility, intensity and accountability, cornerstones of successful transformations. As more and more companies face the need to change – because of new competitors, business model disruption, technological change or increased customer expectations – decisive reinvention of business and operating models is becoming increasingly critical to value creation, and digital transformation will often be central to achieving these goals. A strong TNC can be instrumental in architecting, orchestrating and tracking the transformation journey, thus helping companies achieve their transformation ambitions and outcompete the market.
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.