1. a Transformation and Governance Workshop with BSR commercial in confidence BSR www.bsr.com.au Author: Grahame Flynn
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4. 2. The case for (Transformation &) Governance commercial in confidence BSR www.bsr.com.au Source: Balanced scorecard cooperative Many firms plan for strategic growth in some way but: The people barrier Only 25% of managers have incentives linked to strategy The management barrier 85% of executive teams spend less than one hour/month discussing strategy The resource barrier 60% of organisations don’t link budgets to strategy The vision barrier Only 5% of the work force understand the strategy But 9 out of 10 companies fail to execute strategy
5. Understanding the current state…and where we need to go commercial in confidence BSR www.bsr.com.au Current State Future State Capabilities Enablers Objectives Capabilities Enablers Objectives
6. commercial in confidence BSR www.bsr.com.au Back to basics… Elements of successful transformation… "Before I built a wall I would ask to know: What I was walling in and what I was walling out?" - Robert Frost
7. commercial in confidence BSR www.bsr.com.au BHAG provides a clear high level message to anyone who is interested… And a definite message as to intent… “ I’m building a bloody castle mate!”
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9. commercial in confidence BSR www.bsr.com.au “ A company can certainly try to be what it is not…and it can! But if it is too rapid and matter of fact, The market conversation will be merciless in exposing the phoniness it sniffs…” “ Disruptive innovation is the key… Not the latest whim of the marketing department It needs to match suitable goaling with the core values and ambitions of all concerned”
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13. ‘ everything’! commercial in confidence BSR www.bsr.com.au is ALIGNMENT but it is an output and initiatives of governance of objectives alone
14. commercial in confidence BSR www.bsr.com.au Workshop/Case Topic: “Business transformation… ? via Enterprise Governance using the 5 P’s - the key ingredients” Board & CxO’s Business Units & Project Teams our XYZ case can be directly tied to the need for our 5 P’s… The 5 P’s: The tools of governance Long term success is stymied without them Multi disciplined teams embracing transformational change elements (BRTOPP) the partial often used solution set
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16. 4. The Key Ingredients - 5 P's Governance needs to be put in place so as to ensure successful transformation Beyond BRTOPP… The 5 P’s governance should provide a sturdy framework for conformance so as to ensure resulting return of stakeholder benefits during the full lifecycle implementation of the new business capabilities commercial in confidence BSR www.bsr.com.au
17. 5P1. Policies commercial in confidence BSR www.bsr.com.au Policies should be the centre-piece of your communication strategy… the vital link in your alignment chain
18. Performance manage commercial in confidence BSR www.bsr.com.au Why reinvent the wheel? Conformance is dramatically enhanced by standards!!!
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21. A wall of words can be a barrier to strategic achievement…once written,…seldom read commercial in confidence BSR www.bsr.com.au
22. Beginning with: understanding stakeholder objectives : The business must develop agreed target outcomes to meet expected value return Value mapping is the basis of how this is done! We call it Business Outcome Mapping commercial in confidence BSR www.bsr.com.au
23. Example of a simple B usiness roadmap commercial in confidence BSR www.bsr.com.au Prepared for CC Training New markets accessed Cash flow created Reduce costs Increased efficiency of business Improved financial management Establish financial reporting systems Increased sales at improved margins Increased competency of all staff Implement staff training Recruit staff Implement formal management process Business management improved Exemplary safety record Establish OH&S program Corporate exposure reduced Establish corporate governance processes Increase orders to suppliers Increased demand Reduced cost of materials Business establishment Staffing Initiative Outcome Contribution Risk Assume test market figures can be accurately interpreted Assume raw material arrives on time Sales and marketing Business strategy Operations Staffing Have a dream Establish terms of agreement for sales channel Begin mass production of units for Australia Launch second product line Rent and fit out premises Create test market product sample Administer test market Patent product Sales and Marketing - Australia New product development process created Marketing mix aligned with company direction Pricing requirements understood Establish brand strategy Establish Marcomms plan Market awareness is created Develop capacity model Marketing strategy developed Production environment established Refine financial model Open doors for business Patent protection established Potential demand understood Units available for test market Import filter from Japan Source local BOM Partnership assumptions documented and agreed Common understanding of sales and volume demand Refine details for Australian launch Sales to Australian mass market Defendable business opportunity is established Source business partners Company direction is established Value company Working capital created Sell equity to raise funds
24. BOM (roadmap) foundation commercial in confidence BSR www.bsr.com.au EG: issue may be ‘ineffective sales people’ Transformation will prompt many obvious strategies based on vision they also need to address current issues as well as CSF’S A cause and consequence chain
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26. Understanding execution of strategy commercial in confidence BSR www.bsr.com.au Future environment ? Current environment ? Investment Benefits Realised A leap of faith…. The ‘Black Box’ Even when the future state is clearly articulated, the road to the future is not always understood … and a miracle occurs
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31. commercial in confidence BSR www.bsr.com.au Human nature plays a bigger role in business benefits realisation than any other factor - John Thorp (Chair ITGI) Best ask this guy what he thinks…beforehand eh? Honesty is the best policy… a bigger pie for all is a commonly well understood theme I wonder what’s really going on?
32. commercial in confidence BSR www.bsr.com.au Very few organisations get major organisational change right at the first attempt! WHO’s Perfect? Another revelation!!! Why are we prepared to risk failure in such important issues as Organisational Change? If employees are our most important asset let’s recognise it!
33. commercial in confidence BSR www.bsr.com.au “ The operation was a complete success! The vital signs are very good…in fact excellent!!! but I don’t know much about long term health… we don’t comment on such things” Was that a doctor… or a marketing manager?
34. commercial in confidence BSR www.bsr.com.au “ The operation was a complete success! The vital signs are very good… but I’m afraid I have no way of ensuring long term health…we don’t do that sort of thing” YOU WHAT???? The Initial Implementation (transformation project) was a success (by mutual decree)…no surprises there!!! but the patient died (several talented staff members usually)
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36. commercial in confidence BSR www.bsr.com.au one can lose focus when faced with ‘too much of the same’ Projects are necessary but are manifest and detailed… They can mask the obvious Programme management delivers organisational change PROJECT MYOPIA 5P4. Programme Management
37. Understanding Business Benefits commercial in confidence BSR www.bsr.com.au Expected Business Outcomes Clear understanding of measurable business outcomes based on a programme delivery Scope Clearly defined project scope & deliverables Clear Actions All initiatives are required to deliver on the skills, assets or capabilities required Early Benefits Some projects do deliver quick wins which are handy for validation Business Ownership Established business ownership for value outcomes in full lifecycle Programme approach maximising the likelihood of success
38. Value cases are to be full lifecycle justified – programme management is essential so as to drive home the desired organisational capability and business benefits! The sponsor is accountable for the value case commercial in confidence BSR www.bsr.com.au B R T O P P Programmes are structured groupings of business initiatives designed to produce value for the stakeholders Quick wins are vital Implementation of assets, services, capabilities via projects ! initiatives benefit return Programme management delivers planned change Regular Programme management review for business outcome priorities TRANSFORMATION & GOVERNANCE Delivery via programmes Value meets business case ROI based on lifecycle Utilization beyond deployment B R T O P P
39. Paradigm shift to value management commercial in confidence BSR www.bsr.com.au IT project focus Projects deliver ‘automatic’ benefits ROI is king at project level Project business case Passive benefits realisation “ It will be alright in the long run” From a project mindset To a programme way of doing things Business outcome focus (programme manager) Value return from sponsor ex full investment lifecycle (concept to cash) Benefits are a business responsibility Broader view of a benefit (value) Active benefits realisation Proactive risk management Balanced investment management Ex John Thorp: ‘ The Information Paradox - Realizing the business benefits of information technology’
40. commercial in confidence BSR www.bsr.com.au Once the business benefits start to flow…Hallelujah! Time to celebrate? Sorry, the work is just beginning really… They must have gone back…? “ When the benefits are becoming apparent to all…it will be too dangerous for the opponents to launch outright attacks. You are now the establishment… they move to guerrilla warfare instead. But be aware, not outraged”. - Stephen Denning HAIL THE RETURNING WARRIORS!!!!!
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43. A project governance model for SME commercial in confidence BSR www.bsr.com.au Corporate Governance Project Management GoPM Organisation APM’s GoPM - ‘ Governance for Project Management’ Excellent partner for MS project tool with simplified programme mgt
44. Understand the status quo... BSR assessment of aims, strategy & key processes (CMM: BRTOPP before & after) commercial in confidence BSR www.bsr.com.au
45. Understanding the current state…and where we need to go commercial in confidence BSR www.bsr.com.au Current State transformation governance Future State strategy Capabilities Enablers Objectives Capabilities Enablers Objectives
46. 6. Take away messages commercial in confidence BSR www.bsr.com.au
47. REVIEW : Why transformation & governance? commercial in confidence BSR www.bsr.com.au Source: Balanced scorecard cooperative Many firms plan for strategic growth in some way but: The people barrier Only 25% of managers have incentives linked to strategy The management barrier 85% of executive teams spend less than one hour/month discussing strategy The resource barrier 60% of organisations don’t link budgets to strategy The vision barrier Only 5% of the work force understand the strategy But 9 out of 10 companies fail to execute strategy
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49. 7. Questions commercial in confidence BSR www.bsr.com.au