Unlocking Business Potential: Navigating the Challenges of Transformational Projects

Transformation projects are aimed to unlock the potential of an organisation through the delivery of improved revenue or reduced costs often founded on delivering better outcomes for customers through service enhancements. They are usually complex and expensive, so it’s crucial that businesses make the most of them, but often they don’t. This blog talks through some of the challenges and the importance of addressing them to ensure benefits are successfully delivered. 

I’ve led and been involved in many of these types of projects over my career and seen as many succeed as fail…that might not be what you expect to read from someone who’s in the process of establishing a business based on this line of work! But there’s lots of research out there that suggests 70% of business transformation projects fail to deliver against their objectives. So why is the failure rate so high?The truth is that there are many reasons why projects fail to deliver:

1. Unrealistic expectations - frequently businesses use simplistic business cases based on current performance levels for metrics like conversion rates remaining unaffected as volumes increase as efficiencies are delivered - this optimistic extrapolation brings risk, as transformation projects inevitably make a number of changes and its often hard to determine true cause and effect.

2. Scope creep - once a transformation project is underway we see projects veer away from their original scope as new problems are uncovered, regulatory and other changes happen mid-flight or senior leaders look to use the project’s resources to solve other problems…whilst the bonnet is open, lets fix that water leak we’ve lived with for years. All of these can diminish the returns of the programme and lead to increased spend or delayed benefits. 

3. Lack of future proofing - complex programmes can take time to deliver; in larger organisations this can be years, by which time the world has moved on and the problems being solved have been replaced by new ones. The move by most to an agile delivery method has helped to mitigate this risk, but IT re-platforming projects for example are hard to change once the contracts have been signed…backlogs are created during delivery which keep IT developers busy for years to come.

These are all obvious obstacles preventing the smooth delivery of change, and they are easy to identify and either accept or correct.

In my experience the most common reasons for failed or sub-optimal delivery are linked to two main areas which require as much focus and attention as the actual delivery of IT, process or product changes. These areas are too often overlooked or not given the attention they require:

Employee Engagement - do the users of the change, those that deliver for customers day-to-day understand and crucially, recognise the need for the change? The most successful projects I’ve worked on have been led from the bottom up, with users involved from inception - helping to show and explain what the real issues are and where the opportunities for improvement lie, in my experience frontline colleagues always have the answers.

Even when I’ve led projects that result in the reduction of front-line teams, I’ve always been amazed to see how much passion and enthusiasm there has been to make performance better; despite that when those contributing often knew the changes would lead to the loss of their role. In addition, frontline change agents act as a great tool to have in the communication kitbag…the coffee machine chats and informal Teams calls are a great way to dispel the myths that emerge from projects…they also bring immediate feedback to the project team which is extremely valuable.

Where teams aren’t sufficiently engaged in the change, don’t understand the context, benefits are immediately at risk during the roll-out phase. Days and weeks can be wasted re-visiting the need for the change and those who hold strong opinions can easily influence the rest of the team, and before you know it you’re unwinding some of the changes to pacify them….you don’t want to risk poor employee engagement after all the hard work….and then the benefit dilution begins. Picking your project team wisely and involving frontline colleagues is key…and my advice is don’t always use the people who want the change - those that initially push against it can become the biggest advocates and I’d definitely want them on my team!

Changing processes but not the management systems - this is the biggest challenge facing transformation projects in my experience. Senior stakeholders, budget holders and business leaders are easily convinced to invest in transformational change - why wouldn’t they? These projects are going to deliver benefits for the business…more sales, lower costs, happier customers; more profit.

But…those senior stakeholders don’t realise they need to change to enable these projects to really deliver against their business cases. Existing services, products and processes exist for a reason and they haven’t always been sub-optimal; and they were created by the current management systems that exist in the business - risk appetite and management, KPI frameworks, reward and remuneration systems; often these system have been designed by senior stakeholders and decision makers - they form the basis of the culture that exists.

It’s these management systems that need to be understood, challenged and changed if transformation projects are to be successful and that usually requires a change of culture and mindset around the senior decision makers. 

It’s the leaders of transformational change that have to bring the senior stakeholders in to show them the impact that these systems have on their business and how influential they can be. For example, if a business unit measures its success by achieving x% of customers being serviced within 24 hours (this is a poor metric, but that’s for another blog!) and that metric appears in reward schemes, you can guarantee that metric will trump all others in the minds of anyone who has it in their bonus scheme. A new transformation initiative may be targeting increased sales, but if it isn’t paying attention to that metric then any sales benefits could be immediately diluted due to a lack of alignment - organisational tension will be created and that’s never good.

Too often senior stakeholders focus on the management of the transformation programme, the delivery timeline and budgets - assuming that the benefits will look after themselves. I’d encourage business leaders to ask themselves: How do the management systems need to change? Am I focussed on the right metrics? Am I rewarding the right measures and behaviours? In effect, does the culture need to change and am I leading the way?

Summary

Managing transformation projects well; keeping the scope tight, tracking results and sticking to the budget are all essential; but if you want to make the most of the opportunity, communication and engagement of those servicing customers and ensuring the management systems of the business are aligned with the new world are fundamental to moving the dial when it comes to delivering successful results.

It takes brave transformation leaders to call out these management systems and beliefs, but without doing so, transformation projects will continue to deliver sub-optimal results and businesses will fail to unlock their potential.