How to really reinvent your business
(As originally published in Business in Vancouver, 22 May 2012)
By Vincent Bryant, Leader, Performance Improvement Advisory Services, EY
Business transformation is an often quoted phrase, but the meaning isn’t always clear. Transforming your business is about achieving a fundamental and sustainable shift in the way your company operates to deliver distinctive value to your customers and shareholders.
There is a big difference between making changes to specific areas of a business such as improving a retail bank’s customer account opening process by removing duplication and bottlenecks, compared to, for example, executing an integrated multi-channel customer onboarding strategy to meet the instantaneous banking needs of today’s customers.
Business transformation requires an alignment and often a reinvention of vital components of the business model with the strategic direction and customer value propositions. These components include business structures, partnerships, people, processes and technology, and the day-to-day activities associated with each of these.
Transformation programs are medium to long term in nature. Fundamental to success is a strong focus on benefits delivery. How often do we see IT projects taking on a life of their own and becoming disconnected from the original business case to invest?
The vision behind a transformation program should be aspirational, but the objectives and benefits must be achievable. A transformation program will typically be driven by the need to deliver a distinctive customer experience, lift the business off a performance plateau, share risk or respond to competitive threats. Whatever your motive, there will be many moving parts to manage, including maintaining results during the transformation process.
If you’re operating a global business, leading change across national cultures and time zones will be an important factor in the success of your program. Governance models, program management office (PMO) role and resourcing, team collaboration and communication activities must reflect these variations.
For instance, imagine you’re the CEO of a bank confronted with the need to protect and grow revenues, reduce operating costs, create a distinctive customer experience, establish seamless any-time-any-place customer service, refocus on key customer segments, comply fully with a rapidly changing regulatory environment and financial reporting standards, and ensure risk management is owned by everyone in the business. The solution to this bank’s challenges will involve: radical changes to the business model and processes; technology platforms; performance reporting; marketing programs; corporate culture; and, skills development.
A large-scale transformation program such as this should deliver a systematic reinvention of the business. This example illustrates the range of disciplines companies may need to assemble to ensure that the right level of business resources and subject-matter expertise are available to the program. Team members may be dispersed, and many will have their day-to-day business roles to fulfil in addition to the demands placed on them by the program.
There are a number of key focus areas for large-scale multi-disciplined programs with multiple deliverables. These include ensuring that each project within the program has clearly defined benefits and that the project team understands what needs to be done to deliver these. Active leadership, effective program governance, strong program management disciplines and accurate status reporting are essential. The role of the PMO needs to be clear and should be resourced at a level that matches the scale and dispersion of the program team.
Leadership development and cultural change may seem less important but will often become critical to the success of the program. It’s important to be thorough and objective about the real drivers of performance and the root causes of issues so that the program is set up for success from the start.
Running a large-scale program is very similar to running a business. The leadership team needs to bring the purpose and aims of the program to life, be engaged and well informed, and work to build a collaborative and problem-solving ethos across the program.
A transformation program is a vehicle for driving change; you need to keep your foot firmly on the gas until you reach your destination.
Vincent Bryant leads EY’s Vancouver Performance Improvement Advisory Services team and teaches on the subjects of strategy execution and business transformation on the Executive Education Program at the UBC Sauder School of Business in Vancouver.