Project Management Institute

Transformation program management

Abstract

Transformation programs change how organizations use people, processes, technology, and physical infrastructure to develop capabilities to meet their mission. These programs are driven by a sense of urgency, are broad in scope and impact, and are typically done in parallel with ongoing operations. Transformations require tailored applications of standard project and program management approaches to meet the special challenges associated with managing the human side of change as well as building ownership among key program stakeholders. This paper identifies critical success factors for establishing transformation programs that produce enduring results, particularly government transformation programs. This paper shows how the management processes and structures and the overall transformation approach can support these critical success factors.

Introduction

This paper focuses on the management of transformation of government organizations. While transformation principles do not vary between government and commercial entities, the critical success factors for effective transformation program management presented in this paper are largely derived from experience in United States government transformations.

Transformation is a common theme in government today. In the report, 21st Century Transformation Challenges, the Government Accountability Offices states that “the status quo for doing business is unacceptable for a variety of reasons, including:

  • Numerous government performance/accountability and high risk challenges
  • Past fiscal trends and significant long-range challenges
  • Selected trends and challenges having no boundaries
  • Rising public expectations for demonstrable results and enhanced responsiveness
  • Additional resource demands due to Iraq, Afghanistan, incremental homeland security needs, and recent natural disasters in the United States
  • Outdated federal organizational structures, policies and practices” (Walker, 2007, p 3)

In other words, the status quo needs to change, and a new way of doing things needs to be developed.

Recognizing these challenges, many United States Government agencies have established transformation programs and organizations to support improved business practices. Examples include the Office of Business Transformation within the Department of Defense and the Transformation Office in the Department of Homeland Security Citizenship and Immigration Service.

What is Transformation?

Transformation programs are typically established to produce a step function increase in organizational performance and to develop new capabilities that previously did not exist in the organization. These programs are usually driven by a sense of urgency and have a compelling case for action. They typically span a major portion of the organization and have a significant impact. Examples of transformational efforts include major organizational restructuring, significant changes in business processes, major technology or application deployments, and consolidation or streamlining of facility infrastructure. Transformation programs may address all of these efforts.

Most transformation efforts are classified as programs, in that they require centralized coordinated management to achieve the strategic benefits and objectives. Transformation programs typically involve multiple initiatives that require prioritization, sequencing and coordination to deliver the desired benefits.

Special Challenges

The nature of transformation programs presents special challenges to effective program management. The first challenge is often characterized as “rebuilding the air plane while you are flying it.” Transformation programs are conducted in parallel with ongoing operations, which inevitably have priority in staff selection and resource allocation. A second challenge is understanding and managing the impact the transformation will have on the organization’s people, many of whom will be participants in the transformation effort. Transformations may result in changes to the organization’s structure, human capital system, workforce, business processes, technology used, or workplace location or approach. There is a natural human tendency to resist change, especially if the change is perceived as threatening. Addressing this human side of change is a key factor in ensuring that the transformation results will endure. A third challenge is related to the scale and magnitude of transformation programs. They inevitably have diverse stakeholders, both internal and external to the organization, with varied and sometimes competing interests.

These challenges can be addressed through the structures and processes used to manage the transformation program as well as the approach used to conduct the transformation. The themes of program management recognized by the Project Management Institute (PMI®) Standard for Program Management, namely benefits management, program stakeholder management, and program governance, are used as a framework for presenting and understanding the critical success factors for successful transformations.

Benefits Management

Benefits management is defined as “activities and techniques for defining, creating, maximizing, and sustaining the benefits provided by programs.” (PMI, 2006, p10) Critical success factors to promote effective benefits management for transformation programs include establishing a burning platform for change, setting a clear end-state vision, addressing all factors that build an organization’s capabilities, and developing a roadmap for change using a life cycle approach.

Establish the Burning Platform

The foundation for benefits management must be established in the earliest phases of the transformation program by understanding, validating, and communicating the “burning platform” for change. The term “burning platform” (Conner, 1995, p92) evokes the sense of urgency associated with most transformation programs; the same way an individual trapped on a burning oil platform at sea needs to decide whether to risk jumping into the water. The nature of the burning platform will vary from organization to organization and may include both external factors (changing world conditions, legislation, customer satisfaction, market share) and internal factors (needing to reduce costs, technology obsolescence, and employee satisfaction). As an example, the events of 9/11 and the subsequent anthrax attacks provided a burning platform to develop new national capabilities (i.e. the forming of the Department of Homeland Security). The existence of a compelling burning platform should be viewed as a threshold condition for initiation of a transformation program. If there is not a significant case for action, then a transformation program is likely not warranted, and either no action may be needed, or a series of less intrusive (and less expensive) improvement projects may be appropriate course. Once the burning platform is established and validated, it should be embedded in the program charter and used as a consistent theme in communication with stakeholders.

Set a Clear End-State Vision

A clear end-state vision for the overall transformation effort should also be established early in the program. This end-state vision should address the overall benefits that are expected of the transformation effort as well as provide a high-level description of the end-state organization’s capabilities. This end-state vision will serve as a common standard for informing program governance and decision-making (e.g. which of the various design alternative will best achieve the end-state vision?), as well as providing a consistent basis for communicating program benefits to stakeholders. The end-state vision, once established, should be embedded in the overall program charter and may form the basis for a program work breakdown structure.

Address People, Processes, Technology, and Physical Infrastructure Concurrently

The benefits, vision, and overall scope of the transformation program should be defined to address all key factors that enable the capabilities of the organization. The desired benefits from transformation programs are often not realized because the scope of the transformation program was established too narrowly to focus on a single dimension of change, such as technology upgrades or process changes. Too often, the people side of change is either not addressed or not addressed adequately. The scope of the transformation program should address the set of changes that need to be made to the people, process, technology, and physical infrastructure dimensions of the organization, and the relationships among these dimensions. Ideally, changes to people, process, technology and infrastructure are evaluated and matured concurrently, so that trade-off decisions can be made as the transformation program progresses, thus preventing costly rework (for example, if a technology solution is implemented without adequate consideration of changes to staff roles and responsibilities). The need for multi-dimensional thinking in transformation programs should be addressed in the overall program charter, as well as the work breakdown structure, and definition and scoping of individual projects.

Use a Life Cycle Approach to Develop a Roadmap

Once the clear end-state vision is established and the scope of the transformation program is defined, a roadmap should be developed to show how the organization will get from their “as is” state to the desired end-state vision. This roadmap should include the broad life cycle phases that will be used to organize the overall transformation effort (e.g. envision, define, design, develop, deploy) as well as the sequencing of the individual initiatives or projects that comprise the program. The life cycle approach is required to time-phase benefits realization because individual roadmap activities will likely impact one another, and each has its own requirements and timing as well. In developing the roadmap, special consideration should be given to early creation of benefits to build support and ownership for continued program implementation. The roadmap should be developed in a way to clearly communicate the overall program approach to program stakeholders. It should inform and drive the creation of the overall Integrated Master Schedule for the program as well as detailed work package schedules as the program moves from phase to phase.

Program Stakeholder Management

Program stakeholders are “individuals and organizations whose interests may be affected by the program outcomes, either positively or negatively.” (PMI, 2006, p11) Critical success factors to promote effective stakeholder management for transformation programs include creating ownership, communication, and involvement of support organizations.

Create Ownership

As noted earlier, addressing the human side of change is a special challenge for transformation programs. Successful transformation programs create ownership by ensuring awareness and understanding of the burning platform for change, the end-state vision, and the roadmap for moving from the current state to the future state. Typical work streams to create ownership including change management, communications, and training. However, the design of program management structures and processes also plays a key role in promoting ownership. Including key program stakeholders as members of governance/decision-making bodies will give the individuals and organizations a natural sense of ownership for the program approach and outcome. Another way of building ownership is by involving front line employees and managers in the design and implementation of the transformation. Many successful transformation programs leverage the combined efforts of a dedicated transformation program office, participation of staff from the business owner organizations, and the contributions of external transformation consultants. While the need to “keep the airplane flying while rebuilding it” will limit the availability of staff to participate in the transformation, active participation should be considered essential and may be a limiting factor on the capacity of an organization to transform.

Communicate with Stakeholders

The need for effective communication in transformation programs can not be overstated. Effective, two-way communication with each key stakeholder group is required throughout the transformation. Early in the program, key program stakeholders need to be identified, along with their interests and concerns around the transformation end state vision and roadmap. Two-way communications should be established to include not only outward communications from the program to its stakeholders, but also inbound communications from the program stakeholders to the program. A communication plan and stakeholder engagement strategy should be developed in the early phases of the program, and communication efforts should initiate as soon as the end-state vision is established.

Involve Support Organizations

All elements of the enterprise should contribute and should have defined roles in transformation implementation. Too often, transformation efforts directly engage only the business owner organizations and/or the Chief Information Officer organization. Treating internal support organizations such as Policy, Human Resources/Personnel, the Chief Financial Officer, Facilities Management, and Security/Assurance as key stakeholders and directly involving them in transformation planning and implementation will create broad ownership for the transformation vision, align the transformation with ongoing operations and other initiatives, and may reduce the need to duplicate support capabilities within the transformation office. Support organizations can be given membership in governance bodies, and staff from support organizations can participate as members or leaders of design/implementation teams or issue/risk management teams.

Program Governance

Program governance provides a “framework for efficient and effective decision-making and delivery management focused on achieving program goals in a consistent manner, addressing appropriate risks and stakeholder requirements.” (PMI, 2006, p12) Critical success factors to promote effective governance for transformation programs include the engagement of senior leadership, the role of leadership (as differentiated from management), and taking a data-driven approach.

Engage Senior Leadership

Senior leadership sponsorship and involvement is essential for successful transformation. Senior leadership input is needed to ensure the end vision supports the organization’s mission and will address the “burning platform for change” that is driving the transformation. Leadership sponsorship is needed to ensure the program receives the appropriate resources needed to realize the benefits and to ensure the program is in alignment with other organizational strategies. Leadership involvement is needed to ensure the program is moving in the right direction and to manage relationships with key stakeholder groups. In large organizations with distributed budget responsibilities, a key role of senior leadership is to “discipline the organization” by eliminating initiatives or activities that are not consistent with the transformation end vision or roadmap. There are a number of ways of building senior leadership involvement into the transformation program management approach. Senior leadership should prepare and approve the overall program charter as well as project team charters, they should establish and have ownership of the program vision and roadmap, and they should participate as members of a program governance board/executive steering committee.

Lead and Manage

A competent and dedicated program management office and/or program office is required to manage the transformation and to ensure integration and coordination of the various projects and initiatives that comprise the program. There are no short-cuts from following the framework and processes established in the PMI Standard for Program Management. Effective program management is necessary for successful transformation, but it alone is not sufficient. Successful transformation management requires leadership to make the tough decisions; especially when there are competing stakeholder interests, resource conflicts, or performance issues. The transformation program office must drive the transformation to stay true to the end-state vision and they must actively manage risks and issues to ensure delivery of the desired benefits. This leadership role is exercised through many program management processes, including formal governance decision making, identifying staff and resources to participate in the transformation, and monitoring and control of transformation program progress.

Use a Data-Driven Approach

One of the challenges in effective transformation governance is ensuring that the best decisions are made, especially when stakeholder groups may be advocating differing options. The large volume of decisions needed can put strain on the governance process. Requiring that the basis for major decisions be documented and data-driven will promote good decision-making, and the resulting transparency in the governance process will promote overall ownership among the program stakeholders. Diverse stakeholder groups may not always agree with the decisions, but if they have access to the decision basis and documentation, they will at least understand why the decision was made. In addition, documenting the decision will promote implementation of the decision in later phase transformation efforts, and documenting the decision basis will enable changes in position if conditions change or new information becomes available.

Summary

Transformation is a common theme and need for government organizations today. Transformation programs face special challenges to effective management; however, these challenges can be addressed though the processes and structures used to manage the program, as well as the approach to conduct the program itself. This paper highlighted ten factors that have been used in successful transformation efforts. While addressing these factors will not guarantee success in future efforts, they should be considered where applicable.

References

Booz Allen Hamilton (2007). Transformation Life Cycle, Retrieved on June 1, 2007, from www.boozallen.com/capabilities/services/tlc

Conner, D. R. (1995) Managing at the Speed of Change, New York: Random House

Humenansky, D. (June 2007) Viewpoint the Maze of Change, Retrieved on June 20, 2007, from http://govexec.com/features/06070-01/0607-01advp3.htm

Project Management Institute (2006) The Standard for Program Management. Newton Square, PA: Project Management Institute.

Ripsom, T. (2004) Achieving the Full Value of Large Scale Programs, Retrieved on June, 1 2007, www.boozallen.com/media/file/138037.pdf

Walker, D. M. (April 2007) 21st Century Transformation Challenges, Excellence in Government Conference, Government Accountability Office, GAO-740CG

© 2007, Joseph Saliunas
Originally published as a part of the 2007 PMI Global Congress Proceedings – Atlanta GA

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