synopsis - optimising the group transformation pmo for the executive and board

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Enterprise Transformation

Optimising the Group Transformation PMOfor the Executive and Board – synopsis

by Janellis Australia Pty Ltd

© 2013 Janellis Pty Ltd www.janellis.com.au 1

OVERVIEWPeter spoke about the drivers for change, strategic objectives and target outcomes that need to be taken into account when setting up a Transformation Office.

Each organisation will have unique drivers for transformation and the approach needs to be appropriate to the degree of urgency for change.

For some organisations, it may be ‘hard and fast’ with limited consideration on cultural aspects, while for others there may be a more measured approach that is more closely aligned with cultural change objectives.

Peter highlighted the trend towards a ‘people-led’ rather than a process-led approach to transformation integration and the importance of getting the right people in the room, to prioritise issues, coordinate around key milestones and make decisions.

It was agreed that the governance structure and reporting process needs be as lean as possible whilst providing assurance to the Executive and Board.

The alignment of the strategy, design and execution team for the duration of the full project life-cycle is recommended for complex initiatives that have many facets to their success.

Defining Transformation

It was agreed that transformation initiatives require a different level of thinking and a more sophisticated set of guiding principles that go beyond traditional portfolio or project management methodologies to ensure their success.

Transformation means different things to different organisations and examples of criteria being used include:

> Significant financial impact or investment;

> Large-scale and multi-faceted, impacting: strategy; structure; people; systems; process; technology; skills; culture and behaviours; and

> Operating over extended periods with sustained changes required.

Initiatives that meet the criteria above have many dimensions that need to be managed simultaneously and over a long period of time, and this can present some unique challenges to an organisation.

The common theme across all sectors was the need to execute strategy faster, cheaper and with more success.

The common theme across all sectors was the need to execute strategy faster, cheaper and with more success.

Optimising the Group Transformation PMOfor the Executive and Board – synopsis

Thursday 15 August 2013

Attended by representatives from: Asciano; BATA; Blackrock; Commonwealth Bank of Australia; Commsec; Fire & Rescue NSW; Lend Lease; News Corporation; Optus; Origin Energy; Perpetual; Qantas; Suncorp; Transport NSW; Vodafone Hutchison Australia and Westpac.

Guest speaker: Peter Hanley (Executive Manager Group Transformation at Qantas)

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Optimising the Group Transformation PMOfor the Executive and Board – synopsis (cont)

Some guiding principles to drive transformation and manage change are summarised as:

1 CEO, BOaRd and ExECuTIVE LEadERshIP TEaM COMMITMEnT

The CEO, Board and Executive Leadership Team’s full commitment and buy-in is essential for transformation initiatives. There needs to be consensus and clarity on the drivers for change, target outcomes and a commitment to running a set of activities that fall outside of BAU.

Change Leadership needs to take place from the top down to succeed; and there needs to be clarity on roles and responsibilities for the delivery of transformation.

The Board needs to support the change mandate as well as supporting the importance and value of the transformation team.

2 a CLEaR MandaTE On WhaT nEEds TO BE aChIEVEd, WITh

MEasuRaBLE OuTCOMEsSome organisations have a burning platform for change and the mandate is clear, and others may not; but all successful transformation initiatives need a clear mandate.

The mandate needs to have specific expectations and goals and metrics should be used to establish a baseline as well as the target outcomes.

The target outcomes need to be linked back to a scorecard that is consistent with the broader leadership team so that there is full support at the highest levels for the duration of the change.

The reporting needs to be independent of BAU reporting, transparent, and with a direct line to the Executive or CEO and Board.

3 haVInG ThE ‘a’ TEaM dEdICaTEd TO ThE TRansfORMaTIOn

There is growing consensus that ‘bringing in the best’ is a key success criterion for programs that are going to impact strategy; structure; people; culture; process; technology; and to manage the degree of change necessary to succeed.

In most organisations, project-based activity has not, historically, been perceived to be the natural career path for high performers but transformation initiatives of this complexity and challenge require strategic thinking as well as the ability to execute.

The existing BAU structure needs to include the Transformation team structure and members of the Transformation team should be dedicated to the transformation and not managing BAU simultaneously – and individual scorecards need to reflect this.

Independent strategic thinking and strong business knowledge are essential capabilities within the Transformation team and are necessary to overcome roadblocks and to influence key stakeholders.

4 aLIGnMEnT Of aPPROaCh, MOBILIsaTIOn and PLannInG

The mandate from the Executive and Board needs to translate into a realistic strategy that can be executed within agreed timeframes with clear outcomes. Collaboration with the Executive and Board through the strategic analysis stage and the mobilisation stage is essential to getting this right at the outset.

Organisations should choose a ‘fit for purpose’ approach to their particular transformation challenges that takes into account the degree of complexity and reach across the organisation. The mobilisation and planning phase should take into account:

Governance

> Having a governance structure that provides the right amount of assurance and reporting but is not overly complex or challenging to use;

> Having a ‘people-led’ not process-led, governance structure;

> Getting the right people in the room to make decisions and having transparency in communications and reporting;

> Having real-time project reporting where possible;

> Having clarity, within the team, on the level of investments at particular times in the program, and the priority of investments for ‘quick wins’;

> Having guiding principles, a clear charter or ‘terms of reference’ of how the team will operate

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that are linked back to the ‘value set’ of the organisation; and

> Knowing the baseline and having clarity on the behaviours being sought.

Team structure and capability

> Ensuring there is sufficient expertise and investment in the core areas of strategy, transformation and change management as well as the discipline and assurance of project and program management capabilities;

> Including within the Transformation team structure sufficient expertise from the business and supporting the ‘subject matter experts’ who may not have project management experience; and

> In technology related projects – having strong business analysis skills within the team to get the business requirements clear at the outset.

Quick wins and benefits realisation

> Applying rigour to the development of benefits realisation plans for each initiative during the planning phase;

> Within a complex portfolio of initiatives, applying initial focus on simpler, quick-to-benefit initiatives, in order to demonstrate early traction;

> Finding ways to break up large phases of work into some quick wins to build momentum;

> With technology, streamlining the design and/or development to get some early design concepts to User Testing before completing the full development life-cycle; and

> Measuring the benefits as early as possible and making adjustments as required if benefits are not being realised.

Coherent architecture and methodologies

> Using a methodology or approach that best reflects the size and scale of the transformation;

> Having a cohesive approach to the changes that will need to be made in relation to process; systems; culture; technology. Each of these components may be projects in their own right, so ensuring that they have an over-arching architecture that is agreed upon that streamlines the work effort at the outset;

> Using the principles of software-development methodologies that support the goal of getting prototypes and early releases out as soon as possible;

> Making sure the business is highly involved in business requirements stages and being satisfied with meeting 70% to 80% of the requirements and not trying to ‘gold plate’ the solution for technology initiatives; and

> Minimising the customisation of technology where possible and finding innovative ways to meet the business requirements quickly and cost-effectively.

5 usInG a ‘BEhaVIOuR-LEd’ aPPROaCh TO dRIVInG ThE

TRansfORMaTIOnOne of the greatest challenges for transformation initiatives is that their success relies on behaviour change. To successfully transform an organisation, you have to change people’s priorities and values so that they behave differently and create different results.

The challenge in getting the behaviour change is to equip the staff impacted by the change to answer ‘yes’ to the question: Am I ready, willing and able?

These questions are critical because getting ‘No’ to the different aspects will have different implications or solutions.

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All of the drivers for this ‘Yes’ answer can be distilled down to six main factors which, if they are in place, drive value, priority and behaviour change and ensure transformation:

Transformation success factors If the answer is ‘no’, then…

1. Skills – do the people have the skills required for the transformation? Nothing will happen – they are unable to do what

is required.

2. Value alignment – does the transformation align with the values

of the people who are charged with making it happen?

They will resist change, in some cases being

actively hostile.

3. Organisational learning – do peer groups share feedback and

create knowledge?

They’ll make the same mistakes over and

over; also execute inconsistently across the

organisation.

4. Support – do peers encourage transformational behaviours from

each other?

Unproductive behaviours flourish; in some cases

peers actively discourage each other. (See 2)

5. Environment – does the environment where people work, make

the transformation behaviours easy?

People continue their existing practiced patterns

of work; i.e. do nothing.

6. Recognition – do leaders in the business actively and openly

recognise people who are driving transformation?

People who do try to drive transformation get

discouraged and eventually give up, or leave.

Communication

Influencing behaviour changes requires an ongoing investment and commitment to communicating the change through appropriate activities such as specific targeted communications messages; training; access to tools; and reviews.

During times of significant change ‘you can’t underestimate how powerful the messages are from the CEO or Leadership team’. The change needs to be understood in relation to what it means to each and every person within the organisation and there needs to be many ‘Leaders for Change’ championing the change.

It is important to be transparent and to let staff know what is going on, how it may impact them and what they need to do differently. This can be done by:

> Having an integrated communications strategy that is managed from the top down and executed by the leadership team. Ideally messages will come directly from the CEO to everyone in the company (using a variety of communications channels) to keep them informed so that the key messages are not diluted;

> Using all levels of communication as an Internal PR campaign for the change including email; multi-media; newsletters; reports; posters etc;

> Ensuring that the Executive Leadership Team and other leaders are using the same language with key messages and demonstrating key behaviours; and

> To have more inclusive, two-way, face-to-face communications that complement the broader communications strategies.

Training

In developing the training strategy, the team should be considering all stakeholder groups, including the Executive Leadership Team, the Transformation team and the rest of the organisation: Do they have the necessary skills? Do they believe in the change? Do they support each other? Do their tools and environment support their work?

The training program should then provide the support in areas including: leadership; change management; technology; and other areas as identified.

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Change Leadership capabilities need to exist across the whole organisation and not just with the Executive Leadership Team. Having training programs in place to support the leadership development, that are aligned to specific behaviours, is key.

Tools

> Investing in tools that bring discipline and consistency but that allow flexibility and agility; and

> Making sure there are tools available to support the desired behaviours.

Embedding the changes

> The Change Leadership capability needs to be integrated into the ongoing leadership development programs and embedded within the organisation;

> Completing the transformation initiative by linking the new processes, behaviours or use of technologies to individual scorecards; and

> Providing reviews and audits against the criteria set and tracking the sustainability of the changes by how effectively they were trained, and current behaviours.

suMMaRyThe approach taken will vary from one transformation initiative to another and from one sector to another and it is acknowledged that ‘there is no easy way to drive change’; and some of the greatest learnings will come from the mistakes made. However, the cost of ‘cleaning up’ those mistakes can be significant and there are many examples of strategic initiatives that fail.

Executing strategy faster, cheaper and with more success comes from: the right levels of commitment at the Executive level; clarity of purpose with measurable outcomes; having the ‘A team’; having a well planned mobilisation phase; and taking a ‘behaviours-led’ approach to driving the change through communication and training.

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About Janellis

Janellis is an enterprise consulting firm specialising in: organisational resilience; transformation and change management; portfolio, program and project management; risk and compliance.

Janellis uses the VisionScope process to help organisations drive transformation and manage change across the enterprise.

Janellis has an International Benchmark on Organisational Resilience framework. The framework is based on the strategies of organisations including Qantas, Westpac, Lend Lease, Transfield and government agencies including Roads & Maritime Services and NSW State Emergency Service. A paper on the framework has been submitted to Harvard Business Review.

Visit www.janellis.com.au

Call +61 2 9032 2222

Email [email protected]

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i© 2013 Janellis Pty Ltd. All rights reserved

synopsis - optimising the group transformation pmo for the executive and board

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