How Do You Drive Transformation in Your Organization?

How Do You Drive Transformation in Your Organization?
November 4, 2013 Anne Ponton

Successful TransformationsAre you a Program Manager or a Project Manager? Probably a little bit of both… Program sounds bigger, and people with more experience even call themselves Program Directors as a way of showing how many more years of practice they have in the field. But, what is the difference, and does it matter?

Yes, it matters. And the difference results in the tangible impact one is able to make when driving transformation in an organization. Being a true change agent requires both program and project management skills. Why? Simply because making an impact – measurable, tangible, real – requires being able to organize programs of change, programs that are then decomposed in lists of projects.

So, what is a difference between program management and project management then?

In my opinion, the difference lies in their drivers. Programs are driven by the transformation of an activity, while projects are driven by specific objectives that will eventually contribute to the overall transformation. Once you start structuring your programs and projects this way, i.e. by their drivers, you start becoming a manager – managing programs and projects for their outcomes rather than for the list of tasks to be completed. I am always amazed by these people who define a project as “a list of tasks” and who then just concentrate on getting the tasks done on time and budget… why bother with the tasks? All that eventually matters is the outcome; i.e. the transformation achieved thanks to completing the list of tasks. It’s true that achieving the outcome requires decomposing the work in a list of tasks, organizing, planning, allocating resources, budgeting… agreed. But, in my opinion, the focus must be kept on the drivers, i.e. the reasons why all these tasks are being done. Keeping the focus on the tasks themselves will make you drift away from the ultimate objective to drive transformation, hence achieving incremental successes, but always small and disconnected from the bigger goals.

Now, how can this approach be concretely put into practice in an organization?

Take any activity such as services a company offers or the manufacturing of a product for their customers –  for example, the activity of granting mortgages in a bank; ensuring the safety of the patients in a hospital; transforming wind power into energy; manufacturing smart phones, etc. A transformations program would aim at transforming such activities by changing the process of building the product, or the way to provide the service to the customers. And how would such transformation work? Well, by decomposing the transformation program into a list of projects with specific objectives. None of these individual projects will achieve a fundamental transformation alone. But the combination of the deliverables of each of them will eventually result in real, tangible, measurable transformation.

Driving TransformationTherefore, the difficulty in achieving real, tangible transformation lies in two critical factors: on one hand, identifying a breakdown of meaningful projects at the start; on the other hand, successfully executing every single one of these projects. The first factor – the identification of the right projects – consists in decomposing the problem (the business challenge driving the need for transformation) into a combination of six categories of projects. A 5 Why’s Analysis can help to define a good breakdown by listing the causes of the pain and then defining projects objectives to address these causes. One or several projects might be required in each of the six categories or not, depending on the transformation needs. Then, the second factor – successfully executing each project – consists in following a process adapted to each project. The process steps to execute each project depend on the specific project drivers.

Let’s now walk through the six categories of projects drivers, and the process of executing each of them.

#1 – Regulatory Requirements and Environmental Constraints (UADI)

Probably the less exciting of the six: a business exists in a specific environment surrounded by a given list of constraints and regulatory requirements. As the environment is constantly evolving, the business must evolve and be continuously transformed to constantly meet such requirements. So, in your transformation programs, you are likely to have some projects driven by regulatory requirements, or any other constraint imposed by the environment.

The process of executing such projects is made of four steps, or phases in the context of a project: Understand Analyse, Develop, Implement.

The first phase – Understand – results in a translation of the regulatory requirements, or environment constraints into functional and technical requirements, in the language of the business. The second phase – Analyse – delivers an analysis of the gaps between the target functional and technical setup and the current situation. Once these gaps are clearly expressed in your own language, the third phase starts – Develop – which consists of developing a workable, practical solution to close the gaps.  Finally, the last phase – Implement – ends once the above solution is implemented, and owned by a process, system or business owner in charge of making the solution sustainable and in control, continuously, for ever.

Such projects are driven by the absolute necessity for an organization to comply with regulatory and other compulsory requirements. Their ROI (return on Investment) is seldom positive, but they must be done. On a Kano model, they would be placed on the “Dissatisfier” quadrant: either you comply, or your business dies, but you are not going to create any significant impact on your customers with these projects.

#2 – Process Improvement (DMAIC)

My favourite! This category of projects is usually where you get the highest ROI: with a bit of creativity, teamwork and a lot of enthusiasm, one can achieve miracles with simple and inexpensive solutions.

The process of executing such projects is the well-known DMAIC: Define, Measure, Analyse, Improve, Control.

The first phase – Define – brings you to a business case and a list of CTQs (Critical-To-Quality), picturing a successful end state. The second phase – Measure – consists of taking a snapshot of the current process, in a factual and non-challengeable way. Equipped with the CTQs from Define and the factual photo of the current situation from Measure, the third phase – Analyse – guides you towards the analysis of the root causes of the gap between current and target. The fourth phase – Improve – reveals the new process, designed to address the root causes of the problem as listed in Analyse, rather than its symptoms. The last phase, but not the least – Control – ensures the new process has an owner and some metrics sustaining and monitoring the new process, continuously, for ever.

Such projects are driven by the need to improve the competitiveness of your organization: by making your organization better, faster, constantly able to do more with less, constantly able to reinvent itself and beat the competitors. On a Kano model, these projects would populate the top part of the chart: Performance and Excitement needs.

#3 – Problem Resolution (DUR)

These projects are driven by the need to resolve specific problems, or pain points, existing in an organization. They are a simplified and accelerated version of DMAIC, and are more focused on mitigating risks than truly improving a process.

Their execution process is articulated around three phases: Define, Understand, Resolve.

The first phase – Define – looks very much like the start of a Process Improvement project: it results in a problem statement, and a list of key success indicators – key success factors, or indicators showing the problem has been resolved. The second phase – Understand – consists of identifying the root causes of the problem, and measuring the impact of each root cause on the overall problem. The last phase – Resolve – brings the solutions to the root causes. It results in a sustainable solution to the problem, with an owner of this solution and metrics allowing the owner to detect if the problem re-appears, continuously, for ever.

Such projects are driven by the need to get rid of some pain points, or bleeding areas in an organization. On a Kano model, they would be placed on the bottom right quadrant: basic needs, as resolving the problems will not result in any greater customer satisfaction, but is an absolute necessity for the organization not to have un-satisfied customers and, sooner or later, a bad reputation on the market. Such projects, if successful, are likely to be continued with process improvement projects as the appetite of the stakeholders to move to Performance needs will grow.

#4 – New Activity, Market, Product (DMEDI)

These projects are driven by the development of new activities: new markets, new products, new services… so that the organization can grow.

The process to execute such projects is the design version of Lean Six Sigma: Define, Measure, Explore, Develop, Implement.

The first phase – Define – is more or less the same as a process improvement project, and results in a business case and a list of CTQs (Critical-To-Quality). The Measure phase consists of identifying and measuring the processes which, in the current organization, could contribute to support the setup of the new activity.  The third phase – Explore – is about exploring various solutions to provide a full support to the new activity. The next phase – Develop – consists of designing the one solution in detail. Finally, the last phase – Implement – results in the implementation of the solution coming out of the previous phase, as well as this solution being owned by a process, system or business owner in charge of making the solution sustainable and in control, continuously, for ever.

Such projects are driven by the strategic transformation of the organization; they define where the business will grow and evolve. On a Kano model, they are typically on the top left quadrant: Excitement needs, as they result in the setup of new services and products for the customers.

#5 – Technology Enhancement (DADIS)

Such projects are driven by the need to make an organization more competitive: able to do more with less – better, cheaper, faster.

Their execution process is a typical system implementation or upgrade project: Define, Analyse, Design, Implement, Stabilize.

The first phase – Define – results, as usual, in a business case and list of key success factors. The second phase – Analyse – consists of a gaps analysis between the current needs and what the new technology is expected to bring. From there, starts the Design phase, which brings to a functional and technical design and configuration of the target tool. Then, the next phase – Implement – consists of the implementation of the new or enhanced system, which includes non-regression and new functionalities testing, and user acceptance tests. Finally, the last phase – Stabilize – comes once the new system is in production, and consists in the stabilization of the new platform, including the definition of some control indicators allowing the system owner to keep the new platform in control, continuously, for ever.

Such projects are driven by the need to continuously be more and more competitive in our mobile environment, in constant evolution of what is going to come next. On a Kano model, they would be placed on the top quadrants: performance for system enhancements allowing an organization to become better, faster and cheaper; excitement needs for new systems enabling new services or products to the customers.

#6 – Organization Review (DPTT)

Such projects are driven by the need to transform the people together with the processes and systems.

Their execution process is made of four phases: Define, Prepare, Transition, Transfer.

The first phase – Define – is the same again, resulting in a business case and a list of key success factors. The second phase – Prepare – consists of the design or re-design of the organization structure, in line with the processes and customer needs; this phase commonly results in new organization charts and RACI matrix (Responsible, Accountable, Consulted, Informed). The third phase – Transition – consists of bringing the people towards the new organization: communication, knowledge transfer, human resources management, etc. Lastly, the Transfer phase consists of effectively rolling out the processes in the new organization, ensuring the new setup is in place, in control, continuously…. until the next transformation program!

Such projects are driven by the obvious fact that any business runs through its people. You can have the best processes and best systems of the world: nothing will happen until the people do the job. Organization changes do not have to be major: the smaller the better. Continuously developing and transforming the people and the organizational structure ultimately avoids major re-organization, and tremendously reduces the risk of undesired effects on the customers. On a Kano model, they would fit in the top quadrants (performance or excitement) and they would result in making the organization more adapted and fit to improve customer satisfaction.

All in all, any transformation program can be made of a list of as many projects as you need, each project belonging to one of these six categories. By identifying the right project drivers, you ensure all projects are aligned towards a common goal – transforming an activity in a specific direction, and you ensure systematic success of every single project by choosing a roadmap adapted to the project objectives. Ultimately, this approach is a way to reduce the wastes in your transformation programs by reducing the number of unsuccessful projects, and by streamlining your projects list to achieve bigger goals as you will only retain the projects that matter to the overall transformation objectives. Of course, structuring and delivering such programs eventually relies on the change agents executing their projects with passion.

Are you a passionate Program Director, Program or Project Manager, ready to structure the right programs, and apply a systematic methodology to deliver the programs with success? If yes, try the approach explained here, and you are on the right track. Be patient and perseverant, real transformation takes time…Good luck!

By Anne Ponton

Anne PontonAuthor of “Lean Six Sigma: Coach me if you can“, Anne Ponton is a Lean Six Sigma Master Black Belt with broad experience in both the execution of large transformation programs, and Lean Six Sigma training and coaching. Beginning her career as a consultant in credit, market and trading risks management systems implementation in various banks across the world, Anne has then evolved towards the field of process improvement, leading numerous projects in the financial services, on a worldwide scale. Anne is now the Global Head of the Business Process Management function at Newedge, a world’s leading global agency broker and clearing firm, joint venture by Societe Generale and Credit Agricole CIB.

Read more from Anne at her blog, The Process Excellence String of Ariadne

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