Transformation is no longer a series of temporary projects, but a continuous focus on improvement that’s critical to an organisation’s long-term survival. Viewed through this lens, transformation is a business-critical competency with a need for clear leadership and accountability.

Philip Jaques, Associate Partner, Interim Management in Eton Bridge Partners’ Business Transformation Practice, spoke to highly experienced transformation professional Tania Misteli about the importance of transformation, some of the challenges, and why the Chief Transformation Officer role (CTO) is likely to become a more permanent fixture in the C-suite.

PJ: Tania, why is transformation increasingly important to businesses?

TM: With the constant and rapid rate of change we now experience, businesses can’t afford to stay still. They need to be much more agile and responsive, as well as forward thinking to not only keep up, but get ahead and stay ahead of their competition. The pressure and demand for greater efficiency, innovation and improvement is increasing all the time.

Without a transformation strategy and focus on continuous improvement, businesses can quickly start to fall behind which not only provides the challenge of remaining competitive, but also comes at a cost. The longer the period of underinvestment or lack of attention on certain parts of the business, the greater the deterioration of business systems and operations and therefore the changes required to modernise become more complex and expensive.

Transformation can no longer be managed by a series of onerous temporary projects and reactive change. It needs to be proactive and permanently woven into all parts of the organisation from strategy through to operations, and culture. The ongoing challenge and mindset must be ‘where to next?’.

PJ: What do you think some of those first steps should be for organisations looking at business transformation?

TM: If an organisation is starting to introduce transformation as a new capability, then the priority would be to appoint a senior leader with the relevant expertise – someone to lead and align all components of transformation from strategy through to execution and adoption. Transformation needs centralised leadership to ensure there is a holistic approach across the organisation. Without it, activity will typically become siloed and disrupted by other competing priorities within the business.

If the question is how to approach transformation activity, then first, it’s important to be clear up front about what needs to change, what you plan to do and why. It’s the first question people will ask and if there isn’t a clear and consistent response it will undermine the change from the start. So start by ensuring there is buy in and alignment starting at leadership level and that the change clearly aligns to the strategic vision and objectives of the organisation. Communicate these key messages early on with stakeholders to connect and build trust.

Next, ensure you set up well. Take time to do the necessary discovery and analysis and involve the right people, including those who can advise on improvement opportunities and any potential risks and issues. Make sure key resources are given the time they need to contribute and aren’t conflicted by the commitments of their day jobs. It’s also important to get the right structure and governance in place to ensure you have a healthy balance between the necessary controls and the ability needed to respond quickly as things progress and gain pace. Be clear who your decision makers are and how you will manage and escalate any issues that arise. You’ll need to adapt when things don’t go to plan as there will always be surprises along the way. So go into it with the mindset that things will change and be set up to manage those changes efficiently.

Lastly, while there may be a measurable end date for a specific piece of work, the real transformation happens after this as the changes are adopted and embedded, and benefits begin to be realised. So ensure the necessary resources and support are in place beyond a delivery go live. It’s also important to have a focus on continuous improvement to maintain the change and maximise the return on investment.

PJ: Tania, where have you seen it go wrong when it comes to business transformation?

TM: Over the years, I’ve been asked to rescue a number of transformations that weren’t going to plan. There have been various reasons why but generally speaking most issues led back to things not being set up properly at the start. Some of the more common mistakes are not engaging with the right people early on to get their input or buy in, jumping straight to the solution without really understanding the problem that needs to be solved, not having the appropriate governance and structure in place with clear roles and responsibilities, and a lack of investment in change management resource and planning.

While issues can be resolved and plans reworked, the challenge is that once you’re up and running with resource and financial commitments in place, it’s difficult to slow down or stop to repair. You end up trying to ‘build the train while it’s moving down the tracks’ which is not ideal and can lead to some compromises having to be made.

It should be said though, there is of course no such thing as a perfect transformation that goes exactly to plan – even with all the right preparation and elements in place at the start. There are always unknowns and assumptions that have to be made early on, and once you get into the detailed work of the solution things will inevitably come to light that require some degree of change to the plan. The key is to be aware of this and be prepared to respond quickly and effectively.

PJ: What are your thoughts on transformation leadership and the role of the Chief Transformation Officer?

TM:  With the increasing need for organisations to think about transformation on a more permanent basis, the value and importance of senior leadership in this space is starting to be recognised – as we see with the emergence of the chief transformation officer role.

Businesses have traditionally delegated transformation leadership across executive sponsorship and programme leaders but are now starting to see that it requires a dedicated senior specialist with the relevant vision, skills, and experience in the same way other core functions such as Finance, HR and IT are represented in the C-Suite. It needs a leader with focus, ownership, and accountability across all elements of transformation – from input into strategic planning discussions around how elements of the strategy may be executed and what impact changes may have on the business, through to oversight of the execution to ensure it continues to align back to strategy and deliver against agreed objectives.

PJ: What role does technology play in driving transformation?

TM: Technology has a significant role in any modern business and is a key component of transformation alongside people and processes. But the drivers for transformation should be the strategy and long-term goals of the organisation. These will determine what needs to change and how the business must operate differently to how it does today – what are the processes, roles and responsibilities, and ways of working required, and how can technology be used to support these. In other words technology should not be the driver but rather an enabler of the change.

PJ: How important is change management when it comes to business transformation?

TM:  In my opinion it’s the most important part because change resistance is the key challenge of any transformation. Most people resist change, so there has to be a strong focus on supporting them to psychologically transition to the new state and ways of working. This involves dedicated change management resource and planning from the start to assess what impacts the change will have, and deliver the necessary tools, training, communication, and support throughout.

Some businesses still consider change management as ‘a nice to have’ and try to push people through change without it. This doesn’t work and usually results in the new solutions e.g. technology or processes being used incorrectly, or not at all, which puts the investment at risk and potentially impacts staff retention.

I’ve always been a strong advocate of change management and the value it brings but feel it’s even more important now given what people have been through the past few years with the pandemic and other global events.

My thanks to Tania for an insightful discussion on the business-critical nature of transformation. Please do get in touch if you would like to discuss your business transformation needs or your next career steps.

Philip specialises in the interim recruitment of Business Transformation professionals working with CFOs and Programme Leaders to build out project teams across TOM, ERP and Process Optimisation programmes for FTSE firms and PE-backed businesses.