Transformation Trouble

As Clay Christensen once said, the reason why it is so difficult for existing firms to capitalize on disruptive innovations is that their processes and their business model that make them good at the existing business actually make them bad at competing for the disruption. The trouble with transformation is often the act of transformation itself and the organization's ability to effectively tackle and manage the challenges, risks and opportunities which transformation presents.

My name is Rob Lee Wellin and as you know, companies need people with the right capabilities to manage and lead transformation. As you know, orchestrating successful transformation isn't that easy and I mean innovative transformation which creates a new future without the constraints of the past. Which is why I hope that what I share in this episode will help you get better equipped to perform at your best and as a manager, leader or consultant. If you want to learn more, go.

To studythrive.com Digital Business Transformation presents organizations with enormous potential in terms of growth and development, but that doesn't come without significant challenges and risk. And as Clayton Christensen once said, the reason why it's so difficult for existing firms to capitalize on disruptive innovations is that their processes and their business model that make them good and at their existing business actually make them bad at competing for disruption. The trouble with transformation is often the act of transformation itself and the organization's ability to effectively tackle and manage these challenges and risks. While there are dozens of case studies to look at, I selected one which is backed up by some very detailed documentation that was put into the public domain by PwC. In 2013, the British Broadcasting Corporation, or the BBC, cancelled its digital media initiative, DMI for short, and that was meant to fully prepare the BBC for the on demand digital world. It was a complex business transformation aimed at transforming the way in which the BBC makes content for its audiences and it was cancelled with an asset write down of £100,000,000. PwC was engaged to audit the failed transformation. The shortcomings of the DMI transformation were far from technical and it's important that leaders learn from these lessons and others that didn't go as planned. Many of the pitfalls that companies fall of are well known, but uninitiated transformation leaders and managers still fall victim to them. I'll run through some of the audit findings of the BBC transformation. The program governance structure implemented for DMI wasn't effective in dealing with the complexity of the initiative. The structure lacked an executive steering board which could effectively challenge the progress of DMI against the agreed quality, time and cost metrics. Corporate governance bodies weren't provided with a clear view of the status of DMI through the formal reporting of progress and management of risk. DMI failed to provide transparent and clear reporting on progress against plan cost to complete or delivery of benefits to enable effective decision making within the corporate governance structure. While the overall status of DMI was known via the quarterly reporting provided by the BBC, PMO confidence among BBC executives that DMI would eventually deliver wasn't supported by evidence of detailed recovery plans. The focus and priorities of DMI were on technology build and not sufficiently on enabling BBC wide change. DMI sought to change and standardize working practices across the BBC based on implementing leading edge technology that the BBC needed to research and develop with third parties. Delivery of a single set of processes and the required change in business operations were a prerequisite of successful delivery of the benefits that were recognized in the business case. But DMI reporting focused on technology risks and technology issues rather than the ability of DMI to drive operational change to the business practices across the BBC. The DMI business case wasn't subject to periodic review. This meant that the DMI would have had to monitor for changes in the benefits and the cost against the business case. Reviewing cost and benefits together would determine whether trigger points in the BBC investment policy and guidelines were met which would have required a resubmission of the business case at the time. The guidelines in place required the business case to be resubmitted should there be variation in costs or benefits over the whole life of a project by 10%. In June 2011 the DMI steering board reported that almost 11 and a half million pounds of benefits forecast were at risk and that this represented an 11.6% drop in benefits. A benefits review was undertaken the following month. However, the BBC believed at the time that full functionality outlined in the business case and the benefits would be delivered over the full life cycle of the transformation which at that time was going to be March 2017. Unfortunately, no review was undertaken into the cost of delivering dmi. Had DMI provided an accurate forecast against plan, it would have been clear from the delays in delivery and changes to the risk profile that the conditions requiring reapproval of the business case had been reached. There was also a lack of integrated assurance planning which reduced the effectiveness of governance in managing risk. The key lessons to be learned from the failed transformation were broken down into six areas of transformation management. There was programme and corporate governance. This included programme governance structure, the role of the design authority, the role of the corporate governance and programme reporting. There was a programme lifecycle management which included agreeing on a common approach programme planning and plan management. There was risk and issue management, program assurance management, financial management, addressing the business case definition and approval, and project financial management, and last, but by no means least, benefits management and tracking. What I've just described are the results of an official audit, and I've seen many of these shortcomings inside a number of organizations that I've stepped inside over the last 20 years. This is one of the many examples that serve as valuable lessons learned for transformation transformation leaders who prefer to sidestep the pitfalls that many others have fallen into before them. You probably noticed that the reasons for the BBC's transformation failure were far from technical.

If you want to take your transformation capabilities and credentials to the next level, go to studythrive.com.