Current Situation

Business Transformation projects, programmes and initiative are in trouble. We live in a data driven society now, so let’s talk to the numbers.  70% of Business Transformations fail[1]. That is the Business Transformation programmes that implement the Business Transformations fail. That means only 30% are successful, which means something is wrong. In this post, we will break it down what the current situation is, where is the problem(s), and how to solve it (solution). But, before we do that – one of the first things I do on a programme I’m leading or involved on is get our language right and agree on the definition of common terms so everyone on the programme (and those in the Business who are impacted by the changes being delivered) where they are using the same terms, they mean the same thing, to everyone. So, there are two (2) common terms here – Business Transformation – what is it? And Failure, what determines it? Firstly – What is Business Transformation? This is really a two-part answer. The first part is ‘what is Business Transformation?' and then ‘when is the change the organisation goes deemed a ‘transformation’? Firstly, the definition. Business Transformation is where a Business changes the way it does business. That is, the changes ‘how’ it creates and delivers its product and services (it CVP – Customer Value Proposition) to its customers. It doesn't necessary change ‘what’ it does, but it changes ‘how’ it does it. For example, a major part of the Home Office UK recently underwent a Business Transformation and took its Visa application business from a paper-based business model, to an online/digital business model. Now, the Home Office UK is a massive organisation, consisting of many parts, but specifically for this part of the business (Visa Applications), it is still ‘in the business of processing Visa applications’. ‘What’ the business does (i.e. processing Visa applications’) hasn't changed, but ‘How’ it provides that service to customers has (there was a lot more going on than just digitalising paper application forms, which also included a scanning solution, digitalising documentation arriving into the building (further removing paper from the process), streamlining business processes were a few changed delivered under that programme (keep an eye out for the case study paper on this soon). The second part of the question – ‘at which point does the change the organisation goes through be deemed a ‘transformation’? Well, that that's the subjective part – the quick answer is ‘it depends’. Let me explain. If the change the organisation does through is a fundamental change to its business model, then it probably is transformative, which raises the additional question - but what do we mean by ‘business model’. An organisations business model can be simplified down into three (3) parts - the ‘Who, What and How’:

• Who - is the Customer?
• What – is the product or service (they are providing the Customer)?
• How – do they create and/or deliver the product and services (the ‘Customer Value Proposition’ (CVP))?

If you are still undecided or it is not clear whether the change the Organisation is going through is transformative, then (the long) answer is there are other factors that come into play, such as:

• Has the Business been through this change before? I.e. Culturally is the Business used to change, and does the Business (and all its stakeholders) like change?
• Is the whole organisation affected or involved in the change (i.e. the size and scale of the change is enterprise wide and is not isolated to one part or silo within the organisation), and
• Is the ‘transformation’ being implemented via a Portfolio or Programme of work, which consists of smaller related and dependent projects of work (and not one or two small or isolated projects)?

Then, if the answer to these questions are ‘No, No and No, then it’s pretty safe to say it’s a transformation. Now, Failure – what do we mean by ‘failure’. Well, according to The Standard Group (2014) Chaos Report, in Business Transformation, failure is defined in terms of two types of problem programmes:

• Challenged Programmes - completed but over budget, time and fewer features, and functions than originally specified, and
• Impaired Programmes - cancelled at some point during the development phase.,

That means, these Business Transformation programmes (‘business transformation’ we defined above) either completed and missed their mark (on time, quality and cost) at best, or at worst – they were cancelled, and missed their mark, completely. Now, despite existing frameworks and leading experts (and even management consultancies) specialising in strategy/strategic planning and implementation, there are unfortunately high failure rates (as high as 70%[1]) in the transformation programmes that implement these strategic Business Transformations.

The Problem

According to the Chaos Report, the factors contributing to challenged projects ranked - lack of user input, incomplete requirements or specifications and changing statement of requirements at the top of the list:

Project Challenged Factors % of Responses Lack of User Input 13% Incomplete Requirements & Specifications 12% Changing Requirements & Specifications 12% Lack of Executive Support 8%

Table 1.1 - Project Challenged Factors (top 4)[3] Factors that were present in impaired projects ranked incomplete requirements, lack of user involvement and lack of resources as the top 4:

Project Impaired Factors % of Responses Incomplete Requirements  13% Lack of User Involvement  12% Lack of Resources  11% Unrealistic Expectations  10%

Table 1.2 - Project Impaired Factors (top 4)[4]

The Solution

So, what does that tell us? It tells us if you want to increase the ‘chance’ of success for your transformation programme, the common following success factors are almost certainly mandatory:

• Get users involved,
• Get support from the top, and
• Be clear about the Why (objective), How (strategy) and When (implementation).

The Chaos report surveyed those success criteria, and ranked the factors contributing to project success (completed on time and on budget, with all features and functions as initially specified) as follows:

Project Success Factors % of Responses User Involvement  16% Executive Management Support  14% Clear Statement of Requirements  13% Proper Planning  10%

Increase chance of Transformation Success

​So, if you are on a Business Transformation programme, or about to embark on one, or even thinking about one, in terms of making a success of your transformation and that means developing and implementing your Business Strategy and Target Operating Model (TOM), you must ensure you have in place and do the following:

• Involve the Users (and stakeholders, including executive management) in the development of the design and implementation of the Business Strategy and TOM from the start (to finish),
• Establish the Governance Model that ensures the right level and coverage of executive support and decision making is in place,
• Provide a robust requirements framework and process where requirements are captured, validated and released (published) when agreed in an approved and suitable state for others to continue working from, and
• checkProvide a clear plan of the activities, deliverables to be produced, and roles and responsibilities outlining who is (R)esponsible, (A)ccountable, (C)onsulted, and  (I)nformed (RACI) to complete each activity.

Note – the above post contains extracts from the forth coming The Business Transformation Playbook®, due out 31St October 2018. To download the free preview of the book before the release date visit here. To find out more about the 6-Step Agile Framework that is used in some of the UK largest Business Transformation programmes, that specifically addresses the success factors above, you can download the preview to The Business Transformation Playbook here. [1] McKinsey, Quarterly Transformation Executive Survey (2008)[2] Anglia Ruskin University: Why 3 out of 4 crowdfunding projects fail (Sep 2016) [3] The Standish Group (2014), Chaos Report[4] The Standish Group (2014), Chaos Report[5] The Standish Group (2014), Chaos Report

For more information, refer to Book