Welcome to Season One: Episode One of the Underscore Transformation Podcast. Here you will find a full transcript of the episode. In this very special episode, we invited a number of experts in business change to discuss the 10 critical success factors in scoping a transformation.
From left to right: Mark Chillingworth (moderator), Jason West, Mark Harrison, Kathryn Marshall, Andy Welch, Sharon Bidgland-Gough, Richard Phelps, Joe Ales.
Podcast Transcript
[Intro: You’re listening to the Underscore Transformation Podcast, your practical guide to business transformation.]
Jason West: Welcome to the first Underscore Transformation Podcast, my name’s Jason West.
Joe Ales: And I’m Joe Ales.
Jason West: And together, we’re the founders of Underscore. Each week we’ll be discussing one of the 10 points of our transformation whitepaper [on scoping]. In this episode, we’d like to take you inside our recent live debate.
Joe Ales: The event brought together some of the greatest minds in business change to debate the critical success factors in scoping a transformation. We found the views really interesting, and we hope you do too.
Jason West: Please share your feedback on the show, we’d love to know your thoughts.
Mark Chillingworth (Moderator): Okay. I know a few of you have sponsored transformation programmes or are currently sponsoring a programme. I’d be keen to know for this morning’s debate, what makes a good sponsor? What are things a sponsor can do, perhaps inadvertently, to cause a transformation programme to fail during the scoping phase so it doesn’t even get across the starting line? Can we begin our discussion there? Who’s got an experience of what makes a good sponsor and who is involved in sponsoring a programme currently perhaps?
Andy Welch: For me a good sponsor is someone who dreams about the outcomes and the vision and you actually help them deliver the programme. I’ve seen often where you don’t get that at all, you get a company bringing in an external organisation to act as that sponsor. Whether it be a large consultancy and I don’t know what they are doing– somebody needs to be the sponsor, convince us to make it happen and you’ve got a recipe for disaster when you do that. For me, it’s making sure that that individual sponsor is really truly part of that core part of the business and the final outcome is what they want.
Moderator: It’s an ownership.
Andy Welch: It’s beyond ownership. It’s feeling it, it’s the pain, it’s the accountability, it’s the responsibilities, it’s knowing what gets the endpoint. It’s reaping all that benefit and that person visualizing that and wanting the organisation to get there.
Mark Harrison: And also, the journey to get to that point and as you say that engagement piece of understanding that this is a long journey. There are going to be bumps along the road and being able to stay the course. Both in terms of what they want from a business but also the individual functions that are then impacted by that.
Sharon Bridgland-Gough: I think for me it’s about ensuring that the sponsor is emotionally connected somewhat you’re articulating and is emotionally connected to the organisation and actually is authentic and does believe in the outcome. The amount of sponsors that we can all come across who are just doing it because it’s a job, but not necessarily emotionally connected to it and actually prepared to get their hands dirty, prepared to get the hard jobs, the difficult times as well as the slightly easier.
Richard Phelps: There are some real basics here. I agree with the emotional connection etc. but they have to be well connected in the business. They have to be absolutely clearly linked with the business strategy. They need to have the ear of a CEO ideally, and they’ve got to be really clear about the business benefits and how it really impacts the organisation. If they can articulate that then I think ultimately it won’t succeed, but you have to have the right person in there who’s got connection with the board.
Moderator: To achieve those emotional and alignment issues, what do you need to put in place to make sure that sponsorship is effective and successful? Do you think you can answer? Thank you.
Kathryn: I think there’s another aspect to it all which is not just about the capability of the individual. It’s also about the organisation’s state of development, because trying to be a transformation leader and a sponsor and having that vision is great but if the organisation isn’t prepared to receive it, it requires something different in that individual to help that organisation put in the infrastructure, that culture, the governance around it because the role of that sponsor needs to be really well understood as that progresses. I think there’s a key piece around organisational development.
Mark: Yes, and I completely align with that. I think one of the lovely cliche sayings, “Changing the wheels of a moving car–” I think that there’s a piece around the organisation having the capability to change and transform and that also means good support for the sponsor to understand that that’s going to affect things like BAU – the standard services that are being delivered.
Quite often, as you go through that change and that transformation those services are going to dip in performance because you’ve got people that are distracted or you’ve got people that were in a role and now are being moved into some sort of translation piece. You’re right, you’ve got to look at that organisation as a whole, and see how the organisation as a separate unit, is able to then absorb work with that change and then go through that transformation.
Sharon Bridgland-Gough: Actually what we’re there to do. Where we’re going to play, how we’re going to win, cut targets and target partners but also decision processes and organisational pain points.
Some of it for me is sponsors have really got to immerse themselves very, very deeply in the organisation and really totally understand it because one of the things – I think – they’ve got to be well-versed at being able to do, is to understand that and then translate that into whatever the programme is that they’ve got to deliver. Think about the consequences across the whole piece.
Jason West: For those of you around the table who have sponsored transformation programmes, one thing I’m always keen to understand is, did anyone ever sit down and explained what the role of a sponsor is or give you a role description or any sort of indication?
Kathryn Marshall: I think that’s– To my point about organisational readiness, if you’re in a relatively unsophisticated business which really does need to transform, it probably doesn’t have that kind of change sponsor, “What does a change sponsor look like?” because it’s never had to really think about that so absolutely it’s your point Jason. In my experience, it doesn’t happen, and you are the person that’s creating them.
Andy Welch: I don’t know how many people around the table are going through a programme and the programme director has gone, “Right. Who is our sponsor?” and you go, “Okay, this is where we’re going to be starting, aren’t we? It’s going to be an interesting programme.” It happens again and again so that’s why I’m trying to embed that whole culture mentality. All the things we talked about can be derived from that then you can look at the chances of success.
Jason West: Or the sponsor’s too far down in the organisation because the real sponsor is just delegated and delegated. Sat with the financial controller in one business unit in one country wondering why it’s not happening.
Joe Ales: The other thing I’ve also noticed is the sponsor behaving as an ambassador rather than a sponsor. So it’s just a name, a badge, that the individual wears rather than to your point – being authentic and really driving the change. Where do we want to get to? I’ve often seen that someone that doesn’t get stuck into the detail as well where the programme’s going wrong or the programme needs certain direction, the individual sponsor isn’t in detail or informed enough to make the set of decisions. I’ve seen those types of programmes fail.
Richard Phelps: I think it’s a good point because sometimes programmes evolve. The whole idea may come from someone relatively low down in the organisation but there is a whole process of actually someone eventually grabbing this and becoming the clear sponsor and then getting into the whole business case building et cetera but it may not start with one person. It may start with a number of different people and eventually a sponsor becomes clearer over time. Without a clear sponsor clearly, it’s not going to work.
Moderator: It’s an interesting point because listening to you it sounds to me in some ways that there isn’t a single sponsor always. You always need a leadership team to be sponsoring it.
Jason West: A sponsor has to build that coalition that there has to be one person accountable and I think to Kathryn’s point, you can have a really well-defined sponsor, they know what they need to do, they’ve got the capabilities, they’ve done it before, but if the rest of the leadership team doesn’t really understand this stuff, doesn’t really know what they’re doing or doesn’t value it then building that coalition becomes impossible. I think sponsors are really, really important but I think you’ve got to address the rest of the leadership team at the same time.
Kathryn Marshall: I think, again, a number of us would have experienced this is when actually that sponsor changes. Somebody leaves an organisation, you may come in as the new sponsor and then sometimes you have to do a full-scale reset. Not only have you not got a description of what this sponsorship looks like, you’re having to pick something else which you don’t really know or understand. It’s not being looked at and that can really impact a programme.
Jason West: As a programme director, it’s one of the things you have to have in your mind as you’re going through the scoping phase is that stuff happens. Politics happens, people leave so as you’re building your business case and your case for change and you’re building your coalition if you’re not fully aware of all the political shenanigans that are going on and you haven’t ensured that you’ve engaged the right people – the potential successors to that sponsor – then when they leave and I’ve had it happen before in a major programme – just before the final investment decision the sponsor left. Thankfully, we had his successor as part of the programme so yes, absolutely. We had to resell the whole programme to him and then he went through it with an absolute fine tooth-comb. He was an operations director and he was great. He was really into the detail, to Joe’s point.
Kathryn Marshall: I think it’s something organisations need to think about is making sure what you would do for any succession. Planning for executive leadership. You need to have that succession for your sponsor, key individuals on a programme, I don’t think we do that naturally.
Jason West: Not just the succession into that job. It’s the succession of all the programmes that they’re sponsoring. You’re right it doesn’t often get thought about.
Mark Harrison: Is there someone there in terms of the selection of a sponsor on that side? Are we looking for the individual who is going to align most with the benefits case? Their department or their area that their figure head’s its usually a senior leader within the organisation. Is are they going to reap the most reward from this change that you’re trying to or transformation they’re trying to put in.
Therefore, they’re most motivated and directional. One of the earlier comments of externals coming in. Obviously, that there’s going to be a counter there because as soon as they’re done, they’re out the door. That ongoing change and moving into to continuous improvement and being able to continue that journey. I’ll be interested in anyone’s thoughts around that in terms of that initial selection. Is it goes as far up the tree as you can get it? You’re almost from a CEO level or is there a piece there and trying to look at what are we trying to transform, what we trying to change, why are we trying to do that and who is going to benefit the most or at least be most affected by that changes?
Moderator: We are seeing that in the technology world, the ERP implementations, are usually being run out of the CFO’s office and not the CIO. The CIO is actually taking the next generation technology and process change on board and the ERP just vital, it’s essential but it is not so much that the future of the business anymore.
Andy Welch: Yes, you’ve got the functional owner that really truly lives and breathes it, and will benefit from it and continuous improvement. When we talk about transformation it often has a wider impact than just the function. As you just touched on for the ERPs. It impact the HR fully driving the organisation. It impacts IT from the technology, digitalisation, it impacts the business in terms of reporting so they can make a decision. It impacts finance.
When the person within at function comes up with the idea in business case in case for change and drives it forward and then gets five blockers from each of the function. Say, “Well, I’m too busy to do this or I can’t lend the time to it.” That’s when you need that empowered sponsor at a high level to say, “This is our business, we are doing this together.” The fact that HR are leading or finance leading it is irrelevant because the outcome is for our business. I think you’ve got the two levels. You have the function of sponsor because they live and breathe. You need a wider functional owner as well.
Richard Phelps: I think that’s right, Andy. I think you have to have a very strong connection with the business purpose. The organisation, that gets to the leadership team at the top. Because if you don’t have that it will not survive. That as you say, Jason, people are going to leave. People will get politically knocked out etc. If you’ve always got that line of sight, clear line of sight with the business strategy of objectives cost or whatever the business case there at the most senior level in terms of whatever the business is going through. There’s a better chance it will actually survive, not just will survive but it will actually deliver its objectives. That’s absolutely critical.
I think as a sponsor or as a team around it you’ve got to be continually asking that question. Not just about whether the case is actually being executed in meetings’ objectives but also about where are we with the whole business? We linking what we’re doing with the whole business. It’s much easier to do a transformation when there’s a real burning platform. When you got to just take a ton of costs or you got to change people’s behavior in a certain way for regulatory issues or whatever. A difficulty in transformation I think is when is the business is not absolutely clear for a sponsor. Why are we doing this?
Moderator: I’m going to use this coming around the business case, it is a perfect time to move on to our next topic which is the definition of a problem. What are best practices for defining the needs of the transformation which I think we’ve nicely segue way to. How important is it to define where the organisation is before gathering requirements or of course starting the transformation views on definitions?
Sharon Bridgland-Gough: I think it’s hugely important. To understand that as we discussed that whole business canvas and where is it that we’re wanting to be going to is hugely important. Going somewhere is today we want to go to and then you can get the organisational assessment piece in the middle of it. What does that actually mean for us. Which isn’t just about a top technology solution as we all know but a technology solution and that’s a tiny part of it. It’s the ways of working, all the practice around it that you’re changing.
I think it’s hugely important. I also think it’s important not just to focus on numbers and figures and all of that. It’s also important to understand the external environment as well because you may end up making decision which is right for today but may not be right for five years’ time. I think one of the things that organisations again tend to do particularly when the really long programmes of two, three, four years, as we know, and as we experience, you get to the endpoint, you it get delivered but actually the world to shift it on in that four year period. Constantly looking at a much, much longer term is hugely important on top of that and making sure you’ve got that external lens.
Richard Phelps: I think you’ve got to look at the data, the current state. A lot of people don’t like getting into this. A lot of people poo-poo and say we’re unique we don’t need to look at a competitive environment. You do need to really understand your cost space, what people are doing, what customers, internal customers think of what you’re doing. You can build consensus and build an understanding of what kind of change and transformation is required. You need to look at the competition.
Many, many times I worked in transformation and people say, “Well, we don’t need to look at the competition or the– We’re not the same.” You have to look at the external market. You must look at the external market otherwise you will never survive as an organisation. As much as people don’t want to be. People will say things like, “Well, I don’t want to look at them because we don’t want to compare ourselves with them or whatever.” We have to look at that.
Moderator: Is there a danger there of looking at the competition too much? Many years ago I did a piece of work with TUI travel who were obsessed with looking at Thomas Cook. When I met the CIO of Thomas Cook he was the same. I was looking the other way. Of course, now both of them are in deep doo-doo
Richard Phelps: Not if you picked the right competition. They probably put the wrong competition. The competition is the business environment. Now just looking your own industry sector is, frankly, not necessarily the right thing to do. You have to look beyond your own industry sector that’s what transform it. If you’re looking at digital enablement or the way people behave, if you’re smart you don’t look, you assess your own industry sector. You really need to understand your industry sector, but you should be looking beyond your industry sector. That’s when you get into these difficult conversations. It’s not relevant for us but you have to look beyond just your sector. But you do need to understand your sector as well.
Kathryn Marshall: Quite often transformation is done for purely cost saving reasons. Actually, my approach to transformation is where does the business need to be going? How is it going to change looking five, 10 years out and trying to anticipate that as best as you can which draws on the competition points as well. Also, how jobs are going to change. How the market’s going to change etc?
Then what’s the functional or the element of transformation that you need to embark on today. The business case needs to be informed by all of those things. Of course, there’s an element of cost cutting in these initiatives, but don’t be overly focused on it. I think that’s where the business case can help. You can look at what’s happened against specific markets or sectors or geographies. What’s happening with AI, the impact on jobs. Therefore, what kind of transformation, because they cost a lot of money, so you don’t want to make an investment, that actually two or three years down the line it has not been– You haven’t got your return on that.
Mark Harrison: I think that’s a really strong point there with regards to the length and duration of our programme. If we’re trying to think four years ahead right now, between now and the next four years if there’s going to be an enormous amount of change to the marketplace, to technology, to things that are outside of the control and scope of the programme. I think that there’s a piece of the definition stages is being sensible and how far you can accurately define the outcomes. How far; is that six months, is that 12 months being quite rigid with that and being very clear with it.
Then beyond that then just having those stakeholders in the ground. Having clarity to say, “We can’t. It’s pointless fully defining that now upfront because actually by the time we get there there’s going to be other opportunities, other technologies at the other marketplace is going to be shifting.” You need to have a level of sensibility. You can’t just go off and start taking money out the bank and start spending it. I think there’s an angle there of being smart about how far your vision is and how accurate you can be and then reassessing that. Again, going back to that continuous assessment piece.
Richard Phelps: Looking at transformation over a five year period is the right thing to do. Looking long term, it’s the right thing to do. Businesses, they’re looking at six months a year. With the transformation you have to get, whether we like it or not, businesses require cost taking out. You want to balance. There’s obviously lots of benefits, but to get it through gates, typically you do need to be able to provide some kind of monetary benefits.
There is a whole people behavioural change, which clearly you can see that’s going to benefit the business beyond six months, a year, two years. The long-term pieces, I think, often quite difficult to sell.
Jason West: Some of it must come down to your governance structure and your decision making to allow that that flexibility to take new inputs and new requirements. Have, you kind of figured a way of doing that?
Mark Harrison: Yes. A couple of years ago, I was working with an organization, and we were looking at the way individual projects and programmes were actually being sponsored and how they’re being funded. They a listed the organisation, and obviously, they didn’t have to forecast now from a fiscal perspective. The thing that we were doing was actually trying to create a change capability and capacity that had a fixed cost.
The projects and the programmes that they would be operating on would actually be quite fluid. That you can go into financial planning and say, “Okay, these are the things that we need to do. These are high level of objectives. This is the cost that we need to extract out, or we need to reinvest from this area into another.” Doing that in a way that allowed a lot more flexibility in how that money is spent, which programmes are getting which funding and accelerated in which way.
It’s a difficult thing, I remember having a conversation with the CFO at the time. He was very, very uncomfortable, because he wanted to be able to allocate X millions of dollars against specific objectives, when actually what we wanted to say is, “Let’s not do that. Let’s say we’ve got capacity, let’s get us that, make sure that’s funded and set up and then execute based on value as it’s been defined within the programme.”
You can then say, “We’re trying to move this needle, and we believe we can move it by this much and it is going to cost us X.” Therefore, you begin the programme and then in small increments, and we’re talking three to six months, being able to then measure that needle and say, “How far have we moved it? Are we on trajectory?” If we are, “Great, go ahead.” If we’re not, but we know why, and we’ve got things that–
Otherwise, you can then start cutting those programmes or at least deprioritize them to say, “Well, actually, they’re not quite getting what we need out of it,” and then refocus those energies and those investments with relatively little pain into ones that are having more success. I use the phrase of making a lot more but much smaller bets. The ones that are demonstrating that value, are demonstrating the return, “Okay, let’s focus our energy. Let’s focus our investment in that direction.”
Jason West: That’s really interesting. You’re taking some of the ego out of it. This is one massive programme with smaller bets and it’s that agility. Not agile, but–
Mark Harrison: They were agile in that sense, but we weren’t trying to do an agile transformation. We were trying to demonstrate business agility. Actually, mostly demonstrate it, prove and measure it and say, “These are the things that we’re trying to move. These are how we’re going to do it. If we’re not, that’s fine.” Taking the fail fast theory, probably to it a little bit of an extreme, but you at least then cutting something free six months in, rather than two, three years in and then writing off those big values.
Moderator: Is it often misunderstood that actually because when you talk to people out to say, “Well, my organisation, nothing ever changes, nothing ever works.” The people are bogged down in that sort of stasis that they stay for whatever personal reasons. Are you seeing that moved to if you can demonstrate it, people do want to be agile, like want to make their businesses better, because they want to make their lives better so they can go home on time on Friday?
Mark Harrison: The thing we had success with is defining those things upfront and say, “We are going to move this. We’re going to improve our Net Promotion Score. We’re going to have a run rate those different–” You define that up front and you measure that almost daily. You want to be able to see whether that’s moving in and out.
There are challenges with that where you are navel gazing a little bit, but at the same time, you’re saying up front, “This is the thing that we’re going to move it and this is the period of time that we’re going to do it within.” If you’re doing that you get to is why people tend to say, “Okay, well, this isn’t just another thing that’s hidden, that’s tucked away because we’re trying to take it”
Being transparent to say, “Okay, we do need to take £2 million out of this thing. So far, on our current run rates and on our current trajectories, we’ve got to about half. These are the six or eight things that are going to get us to half, three-quarters a million and beyond.” If you can be transparent, you can define it upfront, it can then be measured. If you can measure something, you can then start looking at some of the more softer things, the behavioural things of, “What does that mean to me if this needle moves?”
Richard Phelps: I’m totally with you on that. I think in my experience, once you’ve identified the measures and the benefits, and probably almost at the same time, it’s really important to start talking to the organisation about the benefits. Obviously, there’s a kind of, “We need to take out,” typically, there is normally a cost issue. There are benefits to people’s careers and the way people work and it’s the thing, “What’s in it for them?”
That’s really got to be thought through in terms of, from the sponsor perspective about how we get this transformation bought in and delivered through the people. If people do not want this done, they are going to make it very, very difficult for the sponsor to get this executed through all sorts of ways. It’s important to pick: A, to communicate the benefits, but also to start to select individuals around the organisation who are going to be the champions of this or who can help facilitate this. People with the right skills, the right mindset, etc.
Sharon Bridgland-Gough: Yes. It was exactly that point and just building on that in terms of being known and understood. It’s also got a play to those informal aspects of the organisation as well. Actually, yes, we all know how we make decisions, it’s going to affect the organisational structure, what’s the KPI metrics? Actually, most of the stuff happens between the informal aspects are around, actually, how am I now going to instinctively going to behave and take action? What’s the commitment I’ve got to make?
Actually, what is that shared vision now? What is that purpose now? What’s the mindset Am I actually going to have to change my language, my beliefs in the organisation? How do we then collaborate? This is kind of this beat beyond the boxes. How do we, in this new world, what does it mean for collaboration for me? What does it mean for the influence of the organisation?
I think, as a sponsor, being able to clearly articulate some of those things, really from up front, we talk about everything is is hugely helpful and being ensuring that that’s known and actually and understood from that point of view. Again, the core thing for me about this particular subject is also being able to articulate the why. This is where we are currently, this is where we’ve got to be in the future because of regulatory change, or because the fact that actually, we’re in a declining market. That’s the reason why we’ve got to change and this is what it means, is hugely important.
Moderator: How we understood and analyze the impact of the transformation, which you’ve all just covered. Is it essential to protect to choose a particular change management model? We know there’s many out there now. Or is it slice and dice, pick and mix from all of them? What’s your experiences?
Mark Harrison: I think, to your point, look at the organisation see what fits best. Also, in those early stages is what’s going to be the easiest and most comfortable to get them used to being in this change journey and moving through it, so it isn’t particularly bureaucratic, isn’t overly complex. People can grasp it quite quickly, but that being tailored around that– It’s not just the organisation, but also the individuals who are going to be executing on that change, the idea of the change team, as it were.
Richard Phelps: Yes. Professional services organisation, I work for partnership model, very, very consultative. You could not go down it working that organisation with a very directive change, it just wouldn’t work. You’d have to have a different– It does depend on the culture, totally, otherwise, it won’t work.
Kathryn Marshall: I think, as well as, it helps having a methodology, and again, from my point of view is irrelevant, which one they all have a common sense approach. But I mean, where you get the real benefit is stakeholder engagement and communication, because actually, if there’s a process that people are following, it is all part of that. That we’ve done this bit and now we’re onto this bit and this is the next bit, so we actually steps through that change process in quite a clear and common sense way, that you can hook various communication initiatives onto to it.
Sharon Bridgland-Gough: Yes ,is that freedom within the framework, as you say, it’s right. It’s going to be right for the organisation because one thing is not going to work. Clinical setting is very, very different to professional services setting. Very different mindset. I absolutely think that yes, these are great frameworks but you’ve got make them work for your organisation.
Jason West: The problems that we’ve seen they’re less about selecting raw methodologies that you’re absolutely right. They’re all common sense. That you need to work with the culture of the business absolutely in how you apply them. The challenge that we see in a lot of organisations, is that they think about change management just before they go live.
[laughter]
Jason West: What we’ve always advocated is really thinking about the changes part of the scoping and driving that stakeholder management, right from the very beginning and going out to a broad stakeholder group, people from the business, to engage, to gather requirements, to seek their opinion and input. It’s the biggest resistance that we get from internal functions. Whether it’s HR finance procurement, IT, it doesn’t matter. The operational people in those businesses that work extremely leads to people that are accountable for delivering that change.
The resistance that we get to going and talking to their internal customers and asking them, “What do you think? What’s working, what’s not working? What do we need to do to change? Don’t just talk to us about systems. Talk to us about how we are. How we land with you. The processes that we deliver.” Doing it right upfront is critical but lots of people are really uncomfortable with that.
Richard Phelps: Yes, agreed Jason. Is often easy if you’ve got a new incumbent in place like if you have a new HR director, finance director. Typically, at that point, they’ve got more of a remit for change and there’s no history there. I think often when you’ve got a very long-established functional head, then they see it as a little bit of a threat. That’s in my experience anyway.
Jason West: Being in post as somebody coming in as a then potential sponsor of a transformation. How long do you have in post before it becomes your baby that somebody is going to tell you it’s ugly?
[laughter]
Sharon Bridgland-Gough: I don’t think there’s length of time. You come in, that could be what you were coming in to do. It will be part of the reason why you’re being selected. It could be actually, you’ve been there a couple of years. I don’t think there’s length of time.
Kathryn Marshall: Yes, I would agree with that. You have to look at what else is going on in the organisation at that time and you may think, is come in as a new functional leader. That actually, there’s another burning platform over there. So, mine will have to wait. I think it’s situation dependent actually.
Andy Welch: I see too many organisations, to your point Jason, where you get to the in point, they go, “We need change champions. Who’s the most junior in the organisation?” We’re going to talk to all the senior management to say, “This is what we are doing. This is what the new process looks like.” It obviously, it fails. When you’ve got the step down from the sponsor, say the operations manager or whatever they’re accordingly across the organisation owning that change. I mean by owning it, you’re getting a CEO to sit down with them to change their yearly objectives, their payments, their benefits. Everything comes out on living and breathing this new change. The change happens.
You only don’t need that, when you’ve got every thought of simple or a paradigm system change, where it fundamentally is different. You cannot do something unless you go to this new system, then you don’t need massive change agent environments. You make it discomfort and everything else, but you can get to the end result. When you looking at transformation, looking at the organisational change, looking at the way you’re changing the business to be more competitive, then you need these operations managers. People running the businesses, their life acting as those change agents.
Mark Harrison: I think it might be going back to one of the points that we mentioned earlier on. Which was having the sponsor and then the team around that sponsor being completely aligned with that change. You’ve mentioned remuneration. Which is always a hot topic. I’ve seen and I haven’t worked with an organisation itself but I’ve seen it where outcomes of particular large programmes are remunerated across the board level and to a higher level than their own programmes. The change initiative, may contribute 20% of their remuneration bonus structure, but their own individual projects, may only count to 5%.
They’re immediately aligned from a monetary perspective to say okay, “We’ve got to make this whole thing work.” Going to your point earlier around in terms of that resistance of having those interviews. Having that transparency and opening things out, that may come down a little because actually, they’re nailed to the success of everybody around the boardroom not just the IT director, the finance director. Who are trying to execute and deliver on that change.
Richard Phelps: You have to get, in any transformation, there has to be in-trade into the objectives of the organisation into performance manager of the organisation. That’s one of the biggest ways of getting change. You’ve got get the individuals but you ultimately, have to get into people’s objectives.
This is where it gets down to the whole sponsorship and planning. It’s absolutely critical to think these points through. About how do we get people to behave in a different way. We’ve got these number of levers, emotional connection. We’ve got performance management. We’ve got remuneration. We’ve got a whole range of levers, needs to be sorted out right at the beginning.
[INTERMISSION]
Moderator: We’re beginning to touch on it but I’m increasingly hearing a lot of agents talk about needing new capabilities. How important is it that the organisation analyse and understands the capabilities is got to carry out a transformation and agrees on those? And either builds them and goes and finds those capabilities.
Sharon Bridgland-Gough: I think it comes back to conversation we were having earlier on which is about understanding the canvas of the business. Understanding what you’ve got to do. Understanding where you want to begin in the future and what does that mean for capabilities all the way down from your overall organisation capability’s house. Whether that be level one and all the way down to four and into competencies, you have to understand that up front. Again, I don’t think a lot of organisations even give credit to actually thinking about that as a starting point in terms of what’s going to be different, but also making sure those capabilities that there is clear, exec accountability.
Kathryn Marshall: Just to add to that, as well, there is always a lot of conflict within the organisation about who is on a change programme and who’s running the business. Sometimes there isn’t the capacity, financial capacity to do both, but actually, that is the right thing to do. There’s always the, do you keep your best person on your business as usual or do you put your best person into change?
These are always tensions, and ultimately, you get always people who want to do both. They want a foot in each camp because it’s part of their ego or part of control or whatever their motivation is. It’s hard for them to separate change and business as usual. Actually, you risk damaging the business significantly if you’re not really clear about resources for change and resources for business as usual.
You need that mix. You need to take people out of business, as usual, put them into change because the change actually is part of the future. Of course, you don’t want to forfeit the success of the business while you’re doing it. It’s always the difficulty, always.
Moderator: That’s one area where the government digital service and NHS digital has been very good with its firebreak methodology, which is to understand that BAU happens and is essential. The idea of the firebreak being, there is no certain periods of the week, day, month are a firebreak and you only work on change, and unless there’s an emergency, BAU just has to be put aside.
Andy Welch: You talked about capability, and Kathryn you mentioned about where to put your best people. One of the ways I’ve looked at it is if you can do the changes for the right reasons, so why don’t you have the best people on it? The way to bridge that gap is two in the box approach because if I’m going to change the HR organisation, I want the best people from the HR organisation to lead this change with me because they’re the ones they’re going to run it. They’re the ones to make it a success, but they haven’t necessarily got all the capacity or the capability in terms of the programme piece. That’s where I bring in the expertise to sit side by side with them. Between the two of them, they can define what the true roadmap is, what the future world looks like, and then how to get there.
Joe Ales: The biggest challenge when you’re asking an individual to perform, to have to wear two hats, I’ve got the change hat and the programme hat that’s focusing on the future and I’ve got an operational one. There is a risk that you become ineffective of both, so your BAU operations fail, and the service starts to deteriorate and you start to get getting feedback from the business that things aren’t going well. Your change programme isn’t delivering the value that you’d expect it to deliver.
In my view, you don’t borrow somebody from an external consultant to come and do the change for you. The best way to sustain a change, in my opinion, is to have the people that are going to live to change once it’s been implemented, so try and put those people into the programme, supported by maybe expertise from elsewhere.
Kathryn Marshall: I completely agree with you actually getting other people in the organisation to see developing change capability in their leaders is a really important skill. Actually, in my experience, there are not enough of those people who have that change leadership capability in businesses. Getting the rest of the organisation to see that that is a real value-add skill as part of their leadership capability is something that’s vital.
Mark Harrison: I think there’s also a piece around the organisation becoming more of a learning organisation. What I mean by that is, I see a lot of transformation programmes where we want to be more of a data-driven organization, or we wanted the data to drive our behaviours or outcomes. I think to do that, there’s also something about interpreting that data and understanding and learning how to work with that not necessarily from the operational set, but just from the people, who is the best person in HR department to this change?
From a change agents perspective, that might be the person that’s got the best communication or, but actually what you might want is Jeff, who’s been with the organisation for 15 years knows all of those little rabbit runs that go through and all the informal communication channels, but he’s terrible around the board table. I think that there’s a piece there around the organisation, looking at it, doing a baseline and understanding what their capabilities and capacities are, but also understanding as we go through it, that’s going to change. That might change week one, month one, year one, being able to bend and flex and move around that.
As you were saying that they’re kind of two in the box with pair programming. If you want to go to about to a technical levels, where you’ve got two people, you’ve got that ability to have that BAU cover. Have the eye on the future in terms of what skills are we going to need next week, next month, next year, as well as making sure that the change that you’re implementing is heading on the directory and heading on the track that you want it to be.
Richard Phelps: I think this capability point is a critical point because there’s got to be a point, in my view relatively early in the programme with the most senior leadership team or whatever. When you’re looking at capability and thinking not just about high-level capability, what are people need to be doing but you’re thinking about well, how are we going to make this happen? Who are the people within the business we need to get into place to really execute this?
If you take, for example, an HR function and you go to a classic origin model, which business partners whatever, there are some people who will just not be capable of doing that. You have to work out who are your key drivers and talent and you have to make some hard decisions quite quickly in the programme to get the right people in. There will be some people who will just not be able to deliver or don’t believe in it. They’ll say they believe in it, but they don’t believe in it.
At some point, quite early on, the right person has to make some calls about getting the right people in place, whether it’s– When I say people, I’m talking about consultants, key people within the business to drive this thing through because you have the wrong people in place, it will not happen.
Moderator: On that point, and we touched upon it at the very top of the discussion of about calling a canvas, a vision, how important is it for transformation to have a mission statement, a guiding light?
Sharon Bridgland-Gough: Incredible important whether you call canvas of vision or even, actually, it’s a– Then, yes, that of a story about the what the world is going to be like in the future, and that’s where I come to in terms of being able to get people’s emotional engagement by using powerful words, storytelling for the future. I think it’s hugely, hugely important. Sometimes we spend a lot of time going, okay, “does the vision fall into the definition of what vision looks like rather than being more authentic?” Again, and actually just as a sponsor, is really compelling view.
Mark Harrison: It is that authenticity and being able to demonstrate that whether that be through some measurements or something, or even just part story, this is what we did last month, last quarter last year, this is where we are now this is where we’re going. As you say, having that felt an emotional attachment to it, backed up with some hard facts, this is what we’ve done or this or the other way around, the carrot and stick forever.
If we don’t, we’re going to lose X% of our market share. If we don’t this other service is going to come out and retire X% of our business over a Y period of time and I think that the authenticity comes in the actual colour that you can paint within that picture, the detail that you can put with it and then being able to then take that detail to the person that you having the conversation with. If you are speaking with someone in the finance department, you can tailor it accordingly. HR, operations, IT, whatever the case may be, but that authenticity is something that I hear a lot of.
Sharon Bridgland-Gough: I think as well, in terms of sequencing of vision, I think some people feel that they have to start with a vision. “Where are we going, what’s the big idea?” and start trying to formulate it too quickly. Quite often, you know you need to change, but you’re not quite sure what and how. I think this is where the business case bit comes in. I think there’s a lot of groundwork you have to do first before you can really say, “Right, this is our vision.”
Actually, part of that as well as is really your stakeholder, again, your CEO, on board with it, and really working, iterating that with your CEO and the rest of the exec team as well, because they have to play a part in it. You have to all sing from the same hymn sheet. Don’t feel stressed about not having a vision right at the beginning or in the very early stages. It will naturally evolve, it will become obvious at some point. Absolutely, to your point, it needs them to be really inspiring, really authentic, really heartfelt. That has to come across in whatever function you’re in, whatever method you’re communicating. It has to be consistent and authentic.
Andy Welch: Also to previous comments that have been said, once you’ve got that snappy vision, you do need that– I create like a line of sight, like a string that goes right from vision, strategic objectives, your design principles, your case for change, the compelling need, “Why we’ve been doing this,” all the way through to the requirements, the features of the things we’re going to have, the benefits of those features. The realisation of that business case should go all the way back to the vision. “We do this, and that person could do that a bit quicker, then that will allow us to deliver that vision.”
Richard Phelps: It should be really, really simple. One of the tests I think is a good test is to be– If we were sitting here, a leadership team on a transformation, going around the room and ask each individual what are we trying to do, or to write it down and to see whether you get the same answer. Often you don’t, but it’s really important to get this vision right, but it will take some time, and it should be very simple, backed up by a lot of information. The actual articulation of it should be quite straightforward. It shouldn’t take more than a minute to talk about the vision.
Moderator: It feels slightly wrong to go from vision to governance. Like I’m popping a balloon there. Governance is essential, but can it be the blocker of transformation programmes? Do people get over-obsessed with governance? Does it prevent decision making? How important is it to decide if decision making is centralised by governance or do you empower people with transformation and trust them to be almost self-governing?
Sharon Bridgland-Gough: It’s a really broad question. I talked about the experience from my point of view about having a strong governance structure. I’ve been in organisations where actually you’ve had that strong governance structure has enabled decisions. Which is, let’s pause and potentially if you hadn’t had that structure, you could have carried on doing what you were doing. I think they’re absolutely invaluable. I haven’t experienced, although I’m aware of organisations, where the governance structure has been overly strong, that’s probably the best way of describing it, and where decisions have been completely at the top of the organisation.
It’s always a hard thing to say, but the decision is got to be where it’s best placed. As a sponsor, you need to be able to determine that really, really clearly, and listening to the counsel of the people around you to enable that decision making around that. I think for me, appropriate governance will lead to ensuring the right decisions are made in the right places.
Mark Harrison: I’m interested in anyone’s thoughts in terms of trying to pick out tips, or thoughts, or ideas as to how you measure that appropriate governance. What metrics, what things do you look at? Because you bring it into a very technical scope if you take a team of engineers, developers, and testers and tell them to go self-form, they love it, and actually the stuff that they produce is really, really good. What you need to do is make sure that that’s actually going in the direction that you want it to, and it’s strategically aligned.
It’s an interplay that I see. I think there’s a really small margin between that appropriateness of, “Actually, this is hindering me because there’s all this tape and I’m spending six weeks putting together a pack that I then need to produce again in four weeks, which means I’m losing two weeks every time I go forward.” It’s that versus just Wild West and people going off and doing what they want. I’d be interested in the round table, is there any thoughts on that?
Andy Welch: From my perspective, and I think you’ll be in some debate because you talk about cross-functional activities. Maybe the wrong phrase to use, but the ‘empire building’ that you get as well causes a lot of challenge. For me, good governance is when I’ve got the same level of happiness across those different functions because I’ve got them aligned. The level of governance you put in play usually actually starts with an over amount of PowerPoint slides and metrics to force people to see the same commonality, but I find you can quickly bring up just the key decisions, but you’ve got the cadence. The people are coming together at a certain point to talk about the same thing.
You make that decision point, rather than these other side conversations that are happening inside decisions. It’s not just the governance of getting that meeting, it’s the other things that happen. We have a good governance meeting, but someone else then goes off and uses their other budget to make a different decision. During that governance, you then start introducing budget controls, and maybe you get the cap of the overall transformation budget. The governance matures over time as well, I find, in organisations. It becomes quite light, it becomes quite easy to have those sessions, but the beginning parts of them are always really difficult to get around the table, because they’ve all got their own empires to go off and build.
Sharon Bridgland-Gough: Every single organisation we talked to earlier on, it’s different. It’s appropriate. I think the reason why I use the phrase “appropriate” is actually it’s very much about actually ensuring that it’s adequately governed, the programme is adequately governed, decisions are made in the right place, but it keeps on track and delivers high performance. Now, I think if we use some principles of governance, I think that maybe a kind of different way rather than a framework around it. I think it’s really hard, because every single organisation is different. Governance in a clinical organisation, can have a different tone to people services, and then what’s the risk that you’re going to have and it’s about playing into that.
Kathryn Marshall: I would agree with that. I think sometimes– I’ve seen a couple of models where it was overly governed and too many decisions were pushed up to the exec level. Equally, on the other side, is a governance process where it feels more like stakeholder management than people really engaging in the decision. I would agree very much with your point around where the principles are at, what we’re here to do, what responsibility do we have as part of this governance process. I think there’s different extremes, and I think you’ve got to find what’s right for the organisation, but sometimes you need to raise that level of governance as well and actually what we’re here to do, what responsibility do we have collectively.
Jason West: I think you can have too many people that can say “no”, and no clarity really on who can say “yes”, or the only person that can say yes is at that very, very top of the organisation, then sometimes those additional layers of governance are just– they’re that bureaucracy and they’re means of making or not making decisions.
Kathryn Marshall: I do think there’s a balance, though, isn’t there? I do think investing upfront before you start is always time well spent, always.
Moderator: Connected to that, one of the things I found interesting reading the report was the difference between programme managers and project managers. What’s the table’s experience with both of those? How do they differ? Explain to me. What are the differences? [laughs]
Sharon Bridgland-Gough: Not that this is a hugely helpful articulation. I was reading this document yesterday, and I had somebody sat next to me. They looked over my shoulder, and they went, “Oh, that’s the first time I’ve seen that clearly defined.” I think what’s been hugely helpful is actually the three definitions that are actually in there. It’s probably the first time that I’ve seen it defined, and I think if I had written it myself or attempted to try and write it myself, it would’ve come out very similar.
I think as a sponsor, though, one of the things you need to actually do is, again, at the early stages, ensure that actually everybody understands the difference between these things and you’ve clearly identified what’s the difference between the project and the programme overall.
Moderator: There are many things that need addressing during a typical transformation. We’ve talked about vision statements. When you go from maybe a vision statement to having a sort of a design almost of this is where– We talked about this is where we’re going to take the organisation. You’re doing that when you’re scoping that design and scoping, therefore, the whole transformation, what’s the decision making processes to do that design, that strike the balance between the necessary and also pushing the boundaries of the business?
Kathryn Marshall: It depends again on where the organisation is in its stage of development. Sometimes as a change agent you are having to educate your exec team about what’s happening in other organisations, not necessarily in competitors, but in other organisations. There is an education point. You also have to put that change in the context of what else is happening in the business and what pressures and priorities there are in the organisation as a whole. All of that has to factor into the design of the scope. You can only do that with the exec team.
You have to do your groundwork first and have a sense of direction, but you have to test that, because there may be things that you’re not aware of, that actually would be in conflict with that change, which means you might not start it for six months, or actually you have to start it– To enable that business change, you have to start that aspect now. From my point of view, it’s always workshopping it with an exec team to really get everybody on board, including yourself around, “Why can’t I do this now? Because I have a real passion and I’ve got a vision for it, and I know how it will help.” Actually, sometimes it’s just not the right time, so you have to do that together.
Richard Phelps: I totally agree with what you’re saying. I think you’ve got to workshop it. I think design principles are very important, by the way. So, getting the design principles right and then workshopping around the design principles. I think you’ve got to fundamentally focus on what you’re trying to deliver around the transformation in terms of how much do we look to the future? You should be thinking about the future, but you’ve got to execute on what has been agreed with the transformation with an eye to the future.
For example, I guess, if you’re looking at picking technology, you’re clearly going to be looking at design principles, selecting a vendor. Now, that’s where you can get yourself in a little bit trouble selecting the wrong vendor. Now, I think thinking about the future is important. You know, with that kind of a decision, but not forgetting what you need them to deliver, but you have to execute on the transformation. I think one of the dangers is getting too fluffy about the future.
Joe Ales: This gives substance to what you’re trying to achieve, doesn’t it?
Richard Phelps: Yes.
Joe Ales: When you’re articulating the vision, this helps you to describe the how.
Richard Phelps: Exactly, right.
Joe Ales: Having the right design of what it is that you’re trying to achieve, helps you just articulate, “Okay, this is where we’re going to get to, and by the way, this is how we’re going to do it. We are going to transform X, Y, and Z. We’re going to transform people, processes, systems, technology, bring in AI,” whatever. You’ve got to have an element of realism about what you can do, and you can only do that at the very beginning.
Andy made a point earlier around– I think you as well, take your time in describing the vision, because if you describe something that’s unachievable– “I want to get to Mars but actually there’s no means of getting to Mars right now,” so don’t describe that. Understand the problem statement. Then with the team design what’s the art of the possible. Then, at that point, a vision can become much more real.
Andy Welch: I agree with all those points, on a separate item . In terms of design, don’t boil the ocean. Everybody wants everything from day one and it’s just not pragmatic. I think often people try and design by system. They look at the system, they design what the system can do, then they design the operating model based on the system, and then they design the targets that the operating model is going to break down. So for the function, whether it sits under finance, you’ve got audited cash report, you’ve got HR.
What I try and do is flip on its head and get these centers of excellence to define what their road maps are. Their road map in 30 days time of go live is they are going to be able to do this, but in 90 days they’re going to be able to do this, and in 120 or two years’ time they can do that for the business benefit. Then that defines your design. Oh, in that case. All you need from day one, as opposed to a thousand processes that you can do on your mobile phone, you just need all your data in one place, then you can start. That’s our mission number one. That changes the approach, I find. Don’t boil the ocean, and have a clear road map owned by the people doing the COE
Kathryn Marshall: I think there’s another aspect as well, which is getting over the line in terms of the design, the scope to start with, but you’re in it, and then the scope creep. Certainly, I’ve experienced projects where, actually, people see a change process in train and actually think, “Well, if the system or whatever you’re doing is going to do that, actually why can’t you do this as well? Can you just include that in your programme?” It’s very difficult to put the brakes on and say, “That’s out of scope, no.” You need to just keep checking all the time that actually, from an organisational point of view, that wasn’t originally in the scope. Do you want us to bring it into scope or not? It happens both ways.
Andy Welch: I’ve never worked with anybody like that.
[laughter]
Joe Ales: I’ve also seen on our project some things that it happened the other way.
Joe Ales: Where you come up with a business case that’s going to deliver a certain outcome and deliver a certain benefit. When you’re through a programme, the only thing that matters actually is to go live. At that point, the only thing that matters is go live, and then you start looking at your scope, and you start going, “Let’s take that out of the scope. Let’s take this piece out of scope. Hang on a minute.” The business benefit that we’re to gain from it, or the business case, was all pinned down on us delivering this-
Joe Ales: -and now you’re taking it out of scope. What are you going to do to the longevity of the programme? I’ve seen it the other way, so it’s important for programmes, whenever they’re going through an implementation of any transformation, to always keep an eye on A, the design principles, but B, what are we trying to achieve from the very outset and are we still on track to achieve that?
Richard Phelps: Making sure that is measurable, tracked and referred too regularly. Otherwise, people forget that is the reason for it. Also, it’s difficult to be able to say, “Right, we’ve done it.” That’s why measurement is critical. This whole piece, Sharon was talking about, understanding the canvas is key. Not just understanding it, but actually putting some measurement within that, without it being too straining, but you have to have measurements.
Mark Harrison: There’s a part of that setup and a part of that definition that there does need to be flexibility. I don’t think I’ve worked on a project or a programme of some description where there hasn’t been some level of scope creep. I’ve worked on plenty where actually that scope creep was out of tolerance, but actually it is a bloody great idea. It’s fantastic. It’s going to benefit the organisation, and actually it may be a better project and programme than we’re actually doing right now.
Trying to switch lanes like that and pivot is nigh on impossible, but I think it’s part of that setup piece and it becomes more and more challenging when the rubber hits the road with the finance side in terms of, “Okay, how much budget do we set aside for scope that we have not yet defined?” Having some acknowledgment of that, that it will happen, it always happens, because you’re in the subject matter on a daily basis. You’ve got more people looking at this change, therefore, more ideas, more communication is going to come out.
Being in a position that isn’t just contingency, just the 10% on top in case there’s wiggle room, actual real understanding that we’re going to do things along this way, they’re going to give us insight, they’re going to lead to better and brighter ideas because we’ve been living and breathing this thing for a month, a year, a whole programme. It is hard, and I think it becomes more difficult when you’re then trying to justify that in financial terms.
Joe Ales: Because it’s not just about scope creep because somebody has a wonderful idea, it’s about actually what business benefit are we going to get out from this, and has everyone on the executive steering committee, whatever governance structure is in place, bought into this scope being brought into the programme? I think the programme needs to make a conscious decision about bringing that scope in, instead of just someone’s idea, thinking, “This is a great tool, a great innovation. Let’s just plug it in,” and nobody in the business knows that that scope is being brought in.
Mark Harrison: We talk about taking scope to hit a deadline. Actually, there might be something. Actually, there’s some benefit that we can realise now, tomorrow. If we can go live tomorrow, go live early, we’ve only got 10% of the benefit, but we’re going to have the benefits realised for six months. The benefit of that is axing monetary, or cost-saving, or time, whatever the case may be. Obviously, I’m not an agile fan from my background, but at the same time, just having that flex to say, “Let’s get something out there that is going to add real benefit.”
Because then, also, that helps with the communication, that helps with the understanding, it helps with the vision, and also it helps with the strategic direction you’re setting. “Okay, this is it. It’s living and breathing. Now, we can sit, eat, taste it and breathe this thing that we’ve put out of the programme. We can then get feedback, real-life feedback from it no longer being part of the change to actually being in the BAU.” People are using this piece of technology changing the way that they’re operating with it in the process or other people themselves.
Moderator: I’m conscious of time and people’s busy days, final question. A lot of people listening to this are going to be wanting to know how they go to the exec board to get investment for these transformation programmes. Around the table, how have you best got the investment to deliver on your transformation programmes and would advise listeners to follow, and how to not?
Mark Harrison: I think to add a different angle, and I’ve had a few successes this way, is it’s not so much asking for the £10 million or whatever the thing is. It’s articulating the missed opportunity unless we act now, unless we do something. We do need to change. Why do we need to change? Because all organisations need to change. It’s not just about digital disruption all this stuff , we need to be an organisation that is able to change and move based on market conditions, based on legislation, based on technological advances, AI and machine learning, whatever the case may be.
I think there is a piece there and it isn’t just around, “Here is a material benefit for this investment.” It is what we’re trying to stop is a material loss by doing something that is going to organisationally benefit everybody and align with our goals. I tend to use that as a second or third stop, the traditional business case activities and benefits, but actually, “This is what you’re going to lose unless we do something,” and then putting something, two, three, four ideas forward to that something.
Sharon Bridgland-Gough: Having been in exec boards at a number of different organisations, it’s just like when people come along, what we need to be able to see is how does it link to the overall strategy and direction in terms of short, medium and long-term? Doing it in a way that avoids getting deep technical, because one of the areas I think lots of organisations or lots of individuals come along, make it really, really technical, and then you sit at the exec and get, “I had no idea what that means.”
It’s being able, as you say, to really articulate what that business benefit is going to be, but also being able to prepare to come to talking about how we’re going to move forward across the organisations, all of the things we talked about, how you’re going to get people emotionally engaged with it, but doing it in a snappy way that you’ve got the execs’ attention, and that actually it becomes so compelling that they have to make the right decision for you.
Jason West: This is where the art and the science of transformation come together. You have to have fully understood the strategic direction. You need to have gone through the whole exec board, got them fully engaged.
That pre-proofing you’ve put it in front of them, so they’ve thought about it before you get to the decision. Even before that, if you haven’t engaged with every single member of that exec committee and understood from them what do they think needs to change, where are we going, what are we doing, how well are we performing today, trying to influence them later is going to be quite tricky. There’s that human side to it, but then there’s the numbers.
That’s where the really fascinating stuff comes, because the exec will have a pretty clear view of what needs to change. The managers in the business, if you go and get their input, they’ll have a fairly clear view. Hopefully, there’s some alignment between those two things, not always, but when you actually get into the detail and look at the numbers, and a lot of the benchmarking that we’ve done with Richard and we’ve done ourselves– You think you know what the problems are, but it’s only when you look at the numbers and you start comparing where we are today versus the market, you just uncover nuggets of information that you had no idea existed. These are the one or two pieces of information that will turn the entire business case.
Richard Phelps: A direct answer to your question is that will be the easy bit, getting into that meeting. As Jason was saying, really, it’s about six months work of consulting with the board, understanding, really putting together a case and getting it verified. That’s where the work is, actually getting to the board. By the time you go to the board to deliver the presentation, you’ll know whether it’s going to be accepted or not in most cases. But you’ve got to have a hard business case for all these things. The boards typically will not accept anything without there being some financial benefit, but you need the other stuff as well. In my experience, they will be always looking at the numbers as the start, as the baseline.
Sharon Bridgland-Gough: Yes, I think it’s just the point I was coming to. It’s numbers and it’s the other, they’re the metrics which link to the purpose of your organisation. If your organisation is increasing access to housing, how does it deliver the number of the doors to increase access to housing? Or if it’s about jobs or whatever– I think you have to have the two there, or else it just becomes purely financially-driven, which can detach away from the purpose of your organisation.
Jason West: Transformation doesn’t always have to be about cost-saving. It often is, or majority of times it is. We’ve got direct experience of a business case which increased the run rate, the budget, by 10% of the function that we were transforming on top of the £10 million investment. That was made on strategic arguments and arguments about how the business was managing its broader capability and the existential risks that it faced for not managing it effectively. Yes, it is often about cost saving, but it really doesn’t have to be. There are always these nuggets of information that can mean you can increase your budget at times.
Joe Ales: Ultimately, they’ll be a return on investment. In an argument where you’re asking for increased budget, because actually I’m increasing budget, but this additional budget is going to give you this extra value or this extra capability that we don’t have today that’s going to give you better sustainability of your business, whatever. You still have to articulate it in those terms.
Richard Phelps: One of the key point I would make is that you have to involve finance in all of these discussions or business cases. Otherwise, you won’t get through.
Kathryn Marshall: Actually, that’s part of building a business case to start with isn’t it. You’re going to find finance and say, “Give me someone who is part of this team, building this business case.”
Joe Ales: One other challenge, so a business case that doesn’t stand the test of time. You then are faced with a set of decisions that you’d have to make two, three years later to pay back this ROI that you’ve committed to against a set of numbers that weren’t real. You then have a choice to make. Do I re-baseline all the numbers and have a conversation with the execs, with the board around these numbers weren’t right? Or do you then continue to deliver your programme against a set of business case numbers that were fundamentally flawed? Paying attention to the business case from the very beginning is vitally important.
Moderator: I think on paying attention to the business case, that is a perfect way to wrap up a fantastic debate. Thank you all for joining us today. Please take a copy of the report if you haven’t already got one. I’d just like to thank everyone, really excellent contributions throughout. I’ve learned so much. I hope everyone else has learned so much. Please tune into the podcast coming soon.
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