Jay Goldman, co-founder and CEO of Sensei Laboratoriesco-author of the New York Times bestseller The Decoded Company, and a world-renowned speaker.
The transformation is a failed state. It is not a reward or an exciting new opportunity. It’s the recognition that the world has changed and you haven’t been able to change with it. The leading companies that win their customers and market share exist in a constant state of evolution that recognizes and celebrates our new reality of “survival of the fastest”.
Unfortunately, the transformation is a very successful failure state that fails at an extremely high rate. BCG says that 70% of corporate transformations fail. It’s not just transformations—companies suck at executing every big project. The Standish Group notes that 28% of non-agile projects fail completely and nearly 60% more fail to meet their goals.
HBR estimates that there was $900 billion in wasted transformation spending in 2018. Failure is not a drop in revenue or market share, but obsolescence and death. Innosight shows that the average S&P 500 tenure in the 1970s was 35 years, dropping to 15 by 2025.
What does this mean for you? Your transformation will likely fail, but not because your transformation itself is the problem. The idea that delivering a fixed-term project called “transformation” will solve your challenges is the real problem.
Einstein famously said, “We cannot solve our problems with the same thinking we used when we created them.” Most so-called transformation projects still look like previous generations of large PMO-led programs: painstaking Microsoft Project Gantt charts spanning multi-year timelines and complex Excel models for tracking benefits, all meticulously rendered in project status reports. Power point.
None of this works in a world that is changing at an ever-increasing pace. Between the effects of the pandemic, climate change and supply chain fees, it seems we are living in unprecedented chaos born of a shift in many of the things we hold to be fundamental truths.
As a direct result, a 2021 Gartner survey showed that 65% of decisions made are more complex than they were two years ago. Non-digital native companies need to enter the third wave of CEO-led agility, combining culture, technology and data to create new approaches to new tools. The past two years have compressed a decade of digital disruption and created an appetite for asynchronous collaboration that enables hybrid work. Now is the perfect time to invest in technology-enabled transformation.
The power of enterprise orchestration
My company has had the chance to be a part of many global transformations and great companies in a wide variety of industries. Our insider’s view has given us a unique perspective on the value of technology enablement that can help you reduce the risk of your transformation, move from the 70% that fail to the 30% that succeed, and establish a construct for continuous evolution. . A consistent maturity model emerged in these programs that is highly correlated with transformation success. Progressing from reactive to predictive has become a hallmark of companies that effectively, efficiently and continuously evolve towards sustained transformation.
Level 1: Reactive
The reactive level consists of little technological capability with highly manual processes and limited cross-functional visibility. Isolated teams are reactive to specific department priorities. Departmental and corporate-level governance is rare. KPIs are limited to project progress and offline benefit tracking is done on disparate spreadsheets with highly manual and inefficient status updates. Tracking and updating status consumes about 25% of work effort (a weekly executive committee meeting at a large company consumes 300,000 hours per year of effort). The company’s stance is highly reactive to market changes and lags behind competitors with detrimental results.
Level 2: Informed
This level contains some tech skills in team level tools. Cross-functional teams emerge through the self-organization of department and team leaders. Departmental governance also emerges, but there is no cross-departmental or enterprise-level governance. Only leaders have instant visibility into progress KPIs which now include some integration between team-level tools, but tracking and reporting remains highly manual and still consumes significant work effort. Methodologies are inconsistent across teams and there are no standardized approaches or processes.
Level 3: Proactive
Larger companies can have Tier 1, 2, and 3 elements in parallel. Portfolio/Enterprise Project Management (PPM) arises through centralized PMOs, often using traditional PPM platforms built for a slower, cascading era. Leaders now have self-service, point-in-time, project-specific visualizations and KPIs, including project costs, savings, and net benefits tracked with historical and predictive perspectives.
Advance planning comes along, typically once or twice a year, with long and inefficient approval times. The PMO is valuable, but perceived as a backward-looking control function. IT projects typically show more mature processes and governance, but processes and workflows across other departments and teams remain inconsistent and manual. Tracking and status update now consumes about 15% of work effort.
Level 4: Predictive
Corporate orchestration can unlock a symphony of your best musicians, all playing in time and on a shared key from the same playbook. At this level, everyone has self-service views of projects and KPIs across the organization and can orchestrate projects through integrated project lifecycles, resource demand, and capacity planning.
Automated workflows emerge, managed through an active, real-time governance model and fast approvals for faster planning cycles. The PMO often evolves into a transformation management office (TMO) comprised of cross-silo leadership, perceived as a strategic enablement function in collaboration with finance. KPIs include the ability to track project impact from idea to P&L through automated, low-impact efforts. Status tracking and reporting consumes only 5% of work effort, and predictive intelligence significantly increases benefit acceleration and risk execution. Business posture shifts to constant transformation as a strategic advantage.
Start evolving today
Progressing from reactive to predictive can be daunting, but it really is a thousand-step journey that you can easily start. Partner with your peers to base the model on an honest assessment of its current state. Identify silos and break them down through collaboration and shared KPIs. Look for ways to automate tracking and reporting through technology enablement to ensure a single source of truth.
Track the effort of status reports and meetings and adopt modern platforms that provide a single source of truth and real-time self-service to significantly reduce this effort. Make Einstein proud by moving away from the traditional tools and ways of working that created the need for its transformation and into the era of enterprise orchestration.
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