Transformation Governance - Overlooked or Undermined

Rob Llewellyn By Rob Llewellyn

Transformation Governance – Overlooked or Undermined

When transformation governance is overlooked or undermined, particularly in organisations where more than 1,000 people are employed across multiple countries, teams will eventually come face to face with a series of unwelcome issues.  While things might seem cosy, collaborative and comfortable in the early days, the effects of inadequate transformation governance are guaranteed to surface over time and give rise  to chaos, confusion, and political collusion. Senior stakeholders such as the CEO will eventually be forced to step in because inadequate governance has let the side down.

Newly appointed transformation leaders often set out to satisfy what they're led to believe are the critical success factors of transformation:

  • Innovation
  • People
  • Process
  • Technology
  • Project Management

While meeting these typical needs is good and very necessary, none of this will achieve the right business outcomes without the right transformation governance model in place. And it's only a matter of time until inadequate governance becomes the root cause of unwelcome issues. In many cases, while teams fire-fight the issues, an experienced eye will spot the fact that transformation governance has been overlooked or undermined, and is the underlying reason for the fires that are breaking out left, right and centre.

Until such compromise is rectified, an accumulating snowball of unwelcome trouble will build its momentum and continue to wreak havoc where it chooses to. Remember – we're talking about complex initiatives in large organisations often spread across multiple countries. Not small local projects where teams typically enjoy basic luxuries such as co-location and straightforward decision making at management level.

Four Types of Transformation Governance

If you are leading a transformation initiative inside an organisation with upward of 1,000 employees, which might span multiple countries or continents, you need to be working with someone who has been involved in the establishment of robust governance models that address four main types of governance – preferably on the scale that is equal to or greater than that of the organisation in question.

By properly addressing the governance model “upfront” you will dramatically reduce misunderstandings later in the process and minimise mismatches in expectations among the various business units or companies. Think about it for a moment – if your finance, procurement or HR policies and procedures are compromised, you know that's an open invitation to trouble right? So it shouldn't come as any surprise that when transformation governance is compromised, that too opens the door to trouble.

So let's consider four main types of governance that should contribute to your overarching transformation governance model, and some (not all) of the factors to be considered for each.

Programme Governance
Programme governance provides a connecting mechanism, oversight and control that ensures alignment between multiple projects, business strategy and direction, and the route to achieving the outcomes expected by the business.
Five factors to consider when developing programme governance:

  1. Quality control and assurance
  2. Structures, including steerco, programme office, project and programme organisations
  3. Mechanisms to provide guidance on matters such as escalation, decision specifications and policies
  4. Scope and change control
  5. Resource management

Global Solution Governance
Global solution governance oversees the design and sign-off of technical deliverables, as well as the actual building of the solution. Global solution governance defines who will own and control the solution as well as how the ownership evolves through deployments in different physical locations and business departments.
Five factors to consider when developing global solution governance:

  1. The company's current control culture
  2. Future operating model (centralised or distributed systems and decisions)
  3. Resource availability
  4. Current business model and IT systems landscape
  5. Overall technical environment strategy

Organisational Change Management (OCM) Governance
OCM governance focuses on what has to be done by whom, with who, to ensure that workforces and business units are properly prepared for the changes within the business.
Five factors to consider when developing organisational change management governance:

  1. RACI of roles and responsibilities
  2. OCM strategy and plan
  3. Business readiness assessment and decision making
  4. Change impact assessment of people and business functions
  5. Communication with and engagement of, stakeholders and wider workforce

Post Go-Live Governance
Post go-live governance focuses on production support as well as roles and responsibilities of your technical centres of excellence and business units.
Five factors to consider when developing post go-live governance:

  1. Production support
  2. RACI of roles and responsibilities
  3. Cybersecurity detection and prevention
  4. Ownership
  5. Integration with overarching governance

The five factors suggested in each of the four types of governance are by no means exhaustive and your transformation management advisor will help you ensure that your governance model is both robust and flexible enough to meet the needs of your unique environment.

Close The Gaps

If you're unable to set eyes on the intranet, posters or documents that clearly articulate the governance that helps steer your transformation towards successful outcomes, then you can rest assured that if you're not already experiencing it, there will trouble ahead. The more senior you are in your organisation, the greater your responsibility is to identify any governance shortcomings before your initiative starts bleeding time, money, and stakeholder confidence …not to mention some of your best people and the vital collaboration of people from other parts of your organisation.

Closing the gaps is not difficult, but don't expect anyone with little if any transformation management experience to become an overnight expert at creating something which is so fundamental to the success of your initiative. That's a bit like asking your local trusted family butcher to perform a surgical operation on someone you care about. It's something that no one in their right mind would do.

No leader should treat their organisation with contempt, by undermining the transformation governance model that will help navigate the road to success.

The Agile Argument

Well intentioned tech leads might argue that governance stifles agile ways of working, but their experience is often limited to small projects in small organisations. So they are often yet to experience the consequences of weak transformation governance in large multi-national environments.

The fact is that governance is simply the alignment of projects with overarching strategies and goals to create value. It's vital in large agile transformation and change programmes, and without it efforts will flounder, as many discover very late in the day, and sometimes too late.

Five factors to consider when developing governance that enhances agile delivery:

  1. Define clearly how the programme of projects is set up, managed, communicated and controlled
  2. Reflect the philosophy of agile practices and keep it light but effective
  3. Senior management, partners, business and IT teams should be partners in quality
  4. Delivery teams agree on performance metrics to self-monitor and be accountable
  5. Reviews of delivery will focus on behaviours – not just processes and documentation

None of this is new or rocket science, but it only comes with experience. So when a transformation programme lacks transformation management capability, despite senior operational management involvement, and terrific agile delivery teams, the shortcomings are not surprising to the trained eye.

The Lessons are there to be Learned

Let’s consider two transformation disasters that could so easily have been avoided. Both were oozing with senior operational managers and leaders, along with large teams of technical resources, but both lacked strong transformation management capability.

1. The BBC saw digital transformation as a technical problem, not a cultural transformation. After the BBC canned a £100 million digital transformation in May 2013, PwC revealed that the failure was the result of a serious weakness in governance, programme management, and business change.

2. The Co-op Bank cancelled a major transformation programme, resulting in £300 million being written off. An independent report cited “destabilising changes to leadership, a lack of appropriate capability, poor co-ordination, over-complexity, under-developed plans in continual flux and poor budgeting” as the cause of failure.

Both transformations were well-funded, but despite the involvement of strong technical teams, project managers, and operational leaders, they resulted in significant financial loss, multiple firings, the embarrassment of senior executives and monumental failure.

As the BBC demonstrated to its viewers, when leaders focus on technology but overlook or undermine governance, it's inevitable and only a matter of time before the proverbial will eventually hit the fan. That's when senior stakeholders have no alternative but to step in, when heads begin to roll and when external help is sought to facilitate recovery.

Read more about the BBC and Co-op case studies

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