The goal for most organisations is to maximise profit and keep shareholders happy.
That’s why significant sums are invested in business growth. Not just to kick of new acquisitions, mergers, supplier agreements, department rewiring, larger premises, process changes, refreshed strategies and bigger product mixes…but also to buy-in external consultants, project teams, capability backfill and more, as design moves to implementation.
Little wonder that all hell breaks loose when expansion fails and leaves organisations fighting to survive.
For example,when Alpha* decided to expand into a promising new area, it purchased an ex-government operation and immediately drove through over 20 high change impact initiatives, with the intent to quickly maximise synergies and profits.
Unfortunately, after 15 months, Alpha was in chaos: functions had crumbled under the weight of changes they could never possibly support; end-user illness and fatigue had become commonplace; employee turnover was at a record high and clients were becoming increasingly dissatisfied. Not only did the 20 initiatives fail to embed, but far higher integration costs than originally forecast had a significant impact organisational profitability.
According to latest statistics, Alpha is not alone, with the vast majority of corporate transformations failing to achieve their goals.
Why is expansion proving so difficult? Here are some useful tips to eliminate your growing pains:
- Establish a robust enterprise governance process: In order to grow rapidly, the temptation is to approve and kick off as many initiatives as possible. This approach, however usually places too much pressure on enterprise cash and business as usual capacity. By creating an enterprise-wide governance process, led by the Group Executive Team, regular review and approval of all projects within the context of the whole organisation an be achieved. This should help sequence the execution of multiple large scale projects in order to spread the load of sponsorship, people, funding and other capability constraints. For governance meetings, consider investing in a portfolio war-room that displays both project Kanban and stakeholder impacts in any one time period.
2. Get more executive alignment. Executives must be aligned, otherwise internal politics will inevitably hamper the progress of change. Unplanned competition for scarce funding, people and other resources just fuels complexity and can even lead to project stand-still.
3. Assign fewer projects to each sponsor and SME: Visible and participatory executive sponsorship is critical for successful execution of any project. However it’s impossible to expect a sponsor or key subject matter expert to actively participate in multiple projects at any one time, on top of their BAU activities. So, where possible, spread the ownership load.
4. Slow Down to Speed Up: It doesn’t matter how many tennis balls are thrown at once, a person only has two hands and therefore can only catch two balls…thus making the cost of throwing all the other balls a complete waste. This is a great analogy for employee adoption of transformation. Without due consideration of the pace of change, SME’s and end-users will experience high levels of stress, burnout, fatigue, illness, turnover and work cover claims. More importantly, projects will not only fail to achieve stated business benefits, they may end up costing more than originally anticipated. Change collision maps, that get reviewed within the portfolio governance process, are a great tool to help with project sequencing. A nice rule of thumb for success is to ensure that only 2 high change impact initiatives are sequenced on a user group in any one month- two balls for two hands!
5. Fund for change impact risk in every business case. The numbers of users, spread of sites/ regions/ cultures, and level of technical complexity will all impact the complexity of project adoption. For high risk change impact investments, an anticipated 70% of benefits are dependant on user adoption. Its vital for this risk to be recognised and funded in business cases.
Next time you decide to acquire for growth, invite a change expert to review and advise on how much might be needed to successfully embed and realise benefits.
For more transformation tips, please visit www.changeconsidated.com
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