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Building a New Organisational Capability Vital to Future Sustained Market Competitiveness
According to a Harvard Business Review study of 128 organizations going through a transformation, only one in four is successful. These are not very encouraging odds at a time when transformation is imperative to create and sustain a competitive advantage.
Organizations must find more effective methods to change. Being a new, yet distinct team, the Transformation Management Office (TMO) is uniquely positioned to increase the odds of success. Led by a Chief Transformation Management Officer who is part of the executive team, the TMO brings together a unique set of capabilities to catalyze transformation throughout the organization. This article will dive deeper into a TMO, how it is different from more traditional organizational functions like a Project Management Office or Strategy Delivery Office, how to implement a TMO, and examples of our success stories in transformations via a TMO. By arming leadership with a new approach, a TMO can deliver on the aspiration to transform.
A TMO is tasked over a finite period of time with aggressively acting to initiate, define and implement, a radical transformation of processes, facilities, equipment, people, technology, and culture across the breadth of the business.
Transformation requires large amounts of change management, coordination of multiple stakeholders, and, more importantly, people committed to making it happen who have the right skills. Organizations cannot expect to design a list of transformation projects managed by a PMO (Project Management Office) or expect an SDO (Strategy Delivery Office) to do this while executing its key processes.
Relationship to the System
TMOs are equipped to challenge and revolutionize the system. They are mandated with an overarching mission to identify opportunities for transformation and are better equipped to avoid the trap of conducting “business as usual.”
Definition of Success
A TMO’s definition of success is the adjustment of a firm to realign the structure, its people, products, services, and delivery to new business value with new or enhanced business capabilities as defined by the CEO and/or Board of Directors.
Skills and Knowledge
TMOs require deep business acumen in all aspects of how the organization functions, as well as an understanding of vision, business strategy, human systems, process improvement, organizational culture, complex systems thinking, and change management.
Ways of Working
A TMO’s native approach is an agile mindset, far more adaptable to rapid change and innovation. A TMO may use short “inspect and adapt” working cycles to design and implement changes as well as prototypes and pilots.
The leader of the TMO, a Chief Transformation Management Officer (CTMO), is a member of the executive team. This ensures the CTMO has direct access to the leadership of the organization and the authority to challenge the status quo.
|Transformation Management Office||Project Management Office||Strategy Delivery Office|
|Focus||Focus is on steering profound change. “We are quickly changing and adopting to achieve a new normal.”||The focus is on achieving project efficiency. “Our projects are on-time and on budget.”||The focus is on delivering value and managing strategy implementation. “We are gradually realizing our outcomes.”|
|Timespan||Medium-term, focusing on complex initiatives that profoundly impact operations and strategy.||Typically short-term, focusing on operational change, but has a role in ensuring the efficiency of longer-term initiatives.||Long-term, focusing on delivering the ultimate strategic vision.|
|Planning Approach||Using an agile approach to tackle complex problems with real-time planning.||Planning and execution of work on initiatives and deliverables.||Big-picture planning: ensuring that projects, processes, and actions are always aligned with the strategy.|
|Performance Management Approach||Performance managed by KPI and goal achievement.||Performance managed by project/program milestones achieved.||Performance is managed by overall results achieved and outcomes delivered (strategic KPIs).|
|Stakeholder & Communication||Actively engage stakeholders through constant feedback loops.||Communicate and engage stakeholders for operational reasons: run projects without disruption.||Communicate and engage stakeholders for strategic reasons: align everyone to successfully execute the strategy.|
|Key Skills Required||Deep understanding of all aspects of the business, agile methods, coaching, change management, process improvement, project management and transformation.||Deep understanding of the project management world.||Deep understanding of strategy execution, performance management, and associated skills.|
Articulate the vision:
Determine the commitment level for the desired change:
Align with the vision
Leadership articulates the needs and objectives motivating the envisioned change. This establishes their alignment and commitment to transformation.
Select a CTMO
The Chief Transformation Management Officer is anointed by the CEO and/or Board of Directors and becomes the driver and custodian of transformation. Acting as an executive team member, the CTMO provides the PMO with direct access to leadership.
Build the core team
Identify key individuals who understand the current business and have the right capabilities to drive change with the potential support of an external advisory.
Determine approach and plan
Clarify the current state as compared to the desired future state by reviewing the business structure, processes, roles, strategy, culture, and assets. Then the team will need to consider the vision and what that will tactically look like in a future state, based on a gap analysis, the team can determine the best approach to start the work of transformation.
Engage enablers and remove roadblocks
Put into place the required enablers while uncovering and removing roadblocks. This might include restructuring employee rewards or appraisals, changing how raw materials are delivered, removing past analog systems, or updating production spaces.
Initiate the transformation
Once there is a plan, the work of transformation should begin. Using an agile approach with a focus on small, achievable objectives allows the team to pilot and learn. Especially early in the transformation, the team will need to adjust and correct even restart, as required.
Learn and share in the success
Frequent retrospectives allow the team to identify and apply the critical lesson learned as they continue the transformation.
Leverage success by sharing with other teams and focusing on the expansion of the methods that work.
A TMO should be time-limited, as it is not ideal to run in a high state of change for more than 3 years.
Remove only the barriers
Remove only the barriers to transformation. It is not necessary to dismantle what is working in the organization such as a PMO or SDO (unless it is a barrier).
The TMO & CTMO can't be “outsourced.”
The TMO and CTMO cannot be “outsourced.” Consultants assist by coaching, training, facilitating, and/or providing short-term staff augmentation. Consultants should not be the voice and face of transformation or “own” any aspect of it.
Transformation should be embedded
Transformation should be embedded into how the company does business. Practices, structures, systems, and processes should be following new ways of working.
Leaders must engage at all levels
Leaders must engage at all levels of the organization, acting as the face and voice of change.
Employee engagement and empowerment
Support employee engagement and empowerment – a key driver to a successful transformation.
Encourage open & honest communication
Encourage open and honest communication by soliciting ideas and welcoming feedback at all levels.
Keep an agile mindset
Visibly reward behaviors that support transformation and keep an agile mindset. Don’t be afraid to try, learn from mistakes, and then course-correct.