Job Skills—Keeping Digital Transformations on Track
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STEPHEN W. MAYE
Hello. I’m Stephen Maye, and this is Projectified® with PMI. I’m here with my co-host, Tegan Jones, and today we’re talking about what it takes to keep digital transformations on track.
As we’ve discussed with many guests in the past, digital technologies are revolutionizing nearly every sector.
In fact, a 2018 McKinsey global survey found that more than 8 in 10 organizations have attempted digital transformations in the past five years.
To be clear, those are attempts. The success rate for transformation initiatives remains shockingly low. McKinsey found that fewer than 1 in 4 organizations say their transformations have successfully improved performance.
So that kind of begs the question, what does it really mean for an organization to transform?
When you’re rethinking and reshaping how an organization operates, how do you define—and then manage—the work that needs to be done?
Because you can’t approach it like a traditional project. You can’t just plan the work and work the plan. You have to be open to shifting scope and redefining deliverables along the way.
But, on the flip side, if an organization is too flexible—so if it never really commits to a solid transformation plan—it runs the risk of failing to deliver the intended value.
STEPHEN W. MAYE
So, what are some of the things holding organizations back?
Some of it stems from insufficient or unclear goals, like you’ve mentioned, but there’s a cultural element, as well—the degree to which behaviors and mindsets are aligned or can be aligned to the changing needs of the business.
If you’re shaking up the way an entire organization works, there will be people who lack the willingness or the ability—or perhaps both—to make the necessary changes.
It’s true. People don’t like change. So, you have to make a pretty compelling case to get them to try something new. But when you’re talking about transformation, you can’t always come to the table with hard numbers.
In fact, a recent survey from Altimeter found that the number one challenge tripping up transformation initiatives was a lack of data or ROI to justify the value of digitization.
STEPHEN W. MAYE
That makes sense. Behind what we describe as ROI is really the question of “why?” Why must we make these changes, and really why can’t we just stay here and not make them? Author and change advisor Daryl Conner says you must answer this question: “Why is not changing not an option?”
If you can’t communicate that, it’s a lot harder to keep people motivated—especially if it means making life tougher for them at some point through the transformation process.
And then you’ve got the people on the other end of the spectrum. These are the ones that are all fired up about making really big changes—and have very specific ideas about what those changes should look like.
These people are really enthusiastic, and that’s great, but you have to harness that energy early and make sure you keep everyone on the same page.
Because if there are competing visions of what the new organization should look like—perhaps even different factions pushing for different outcomes—it’s going to be a lot harder to deliver results.
STEPHEN W. MAYE
That’s something I recently heard from Rob Loader, the executive in charge of capital management at Telstra in Melbourne, Australia.
He talked about why you need to get leaders across the organization clear and aligned on the purpose and desired outcomes at the start of a transformation—even if it’s not 100 percent clear how you’ll get there.
He offered up some things he’s learned from the digital transformation happening at Telstra, and I think his insights are applicable across cultures and industries.
We’ll hear from him later in the episode.
We’re also going to hear from Seema Sadhu, a senior project manager for the clothing company PVH in the U.S. state of New Jersey.
She says that while transformations are often these big picture visions that are passed down from business leaders, project and program managers can make these initiatives more tangible by breaking them into smaller projects.
She says this approach makes it easier to navigate change and uncertainty in one area without pushing the whole transformation off track.
STEPHEN W. MAYE
But first we’re going to hear from Jan Olesen, head of agile transformation for the financial services firm Manulife in Hong Kong.
He outlined how agile principles and approaches can help teams navigate changes efficiently—and gain clarity on how to move forward despite resistance to change.
Let’s go to him now.
So in general I believe that scope management is important on both transformation and nontransformation projects.
But I guess in my experience I see that on transformation projects, there tends to be a high degree of resistance to many of the changes that the transformation will implement, and therefore definitely on a transformation project, managing scope and managing clarity of what needs to be achieved is extremely important.
So the way that agile really works and the way an agile transformation handles this, is, well basically, the agile principle of transparency. So it is to have full visibility. That’s a key tool to ensure that we very early on see if something is now starting to go in a direction which is not what we initially intended it to be.
When we’re working in agile, we have very distinct roles. So anything to do with prioritization, what it is that is going to be built—that is the product owner. That is the person that has the ultimate authority to decide what is built and what is the right priority of that part of the solution to be built, meaning what is built first.
In reality, the product owner will rely on other team members with expertise. So it’s not just about what is important and needs to be prioritized first in terms of value but also in terms of sequencing and logically what needs to be built first for it to be built at all.
A risk I often see is that we build something, and we get some feedback after the first iteration. It can be suggestions, ideas, and we get so excited about those ideas that we kind of spend our time improving what we already built rather than building the next thing.
And that is the risk that we need to make sure that the product owner also understand that yes, we need to build a great outcome. We need to iterate on it. We need to listen to feedback. But we also need to move forward and get to the end of what our vision and roadmap has set out to be.
Strategic initiatives, that is where the reward is high, and it’s also where the risk is high.
But strategic initiative, that is where I see it will bring you forward in your career because it’s strategic, it’s likely that this is something that you can use elsewhere.
STEPHEN W. MAYE
I really like the point Jan made about clearly defining roles and identifying key decision makers.
You need to bring people from across the organization into the decision-making process to build a solid base of commitment, but you also need to know who’s ultimately in control. Otherwise you end up trying to manage a kind of runaway train.
Right, because, like we said before, transformation projects do need clarity and transparency to succeed, even if the scope is flexible.
And that’s something we heard from Seema Sadhu, a senior project manager at PVH Corp. in the U.S. state of New Jersey. PVH is a fashion and lifestyle company that owns clothing brands including Calvin Klein, Tommy Hilfiger and IZOD.
STEPHEN W. MAYE
Seema also discussed why it’s important to think about how real people will have to change throughout digital transformation—and not just the technology.
Our contributing editor Hannah Schmidt has the full story. Let’s go to her now.
A digital transformation isn’t just a project. It’s a vision of the future. And project and program managers have to get creative to make that vision a reality.
Seema Sadhu has led the charge on several digital transformations, helping organizations do the hard work of becoming something new. And she says the key to success is breaking down massive transformation initiatives into bite-sized chunks of work that are easier to keep on track.
A transformation is always some strategic vision. It really boils down to breaking that vision into small, measurable pieces called projects. And that’s how I would typically go about managing the scope of these huge transformations.
What is important for transformation type of activities or initiatives is to be able to understand that strategic vision that defines a transformation first. Once you have boiled that strategic vision to tactical smaller projects with somewhat well-defined scope, you are able to then manage that scope effectively.
But putting new technology in place is just one part of a digital transformation. These initiatives also involve big changes to an organization’s culture. And getting people to adopt a new way of working is often a bigger job than updating the tech.
While you’re focusing on getting your entire transformation done, you have to remember that for a successful transformation to occur you really have to bring all your business partners, your key stakeholders, your teams together so that they are going along this journey with you in terms of that transformation.
So, for example, moving a platform from, let’s say, a legacy system to a cloud-based system. Well, yes, it is definitely something that is driven and enabled by technology. However, for you to reach that success of that entire transformation, you’re actually dealing with people, you’re dealing with culture, you’re dealing with behaviors, you’re dealing with business processes.
Transparency and open communication can help keep everyone focused on the same strategic vision—and build consensus around specific changes.
Whether it is a small transformation or any kind of project or program that you are delivering, you will always find that there are differences between your stakeholders at times. And an effective program manager or project manager—one of the tasks is really to build those bridges in between and be able to boil it down to what is the basic objective of why you’re asking for a certain thing to be done in a certain way.
Seema says project and program managers need to be flexible and collaborative to manage a successful transformation. Even if it means making last-minute changes, bringing people together is the best way to make the new organization something better than it was before.
If somebody was to step into a enterprise-wide transformation, they probably have to do a little bit more of that outside of that budget and that schedule kind of a management. They have to be ready for those surprises to spring up, for those changes to happen and be able to adjust to that change of direction—quickly, though. But understanding and appreciating that transformations can be little sort of, you know, ripple-y, with those ripple effects in water, where things will shift and change. And you’ve got to be flexible; you’ve got to be open, and you’ve got to get not just the technology portion of the transformation completed, but you are really looking at the entire end-to-end process of which technology is just that component. And so if you keep that overview in mind, I think you’ll do a great job in being a collaborator in making that transformation successful.
I liked how Seema explained that you can’t just roll out a new technology and hope it will be adopted across the organization. Transformations are people projects as much as they’re technology projects. And they take a lot of legwork.
STEPHEN W. MAYE
How leaders can bring people into the fold early is something I discussed with Rob Loader, executive in charge of capital management at Telstra in Melbourne, Australia.
We discussed how focusing on the purpose of the transformation and what it intends to deliver can help project teams see how they’re progressing—which in turn reinforces their commitment to the initiative.
Yeah, with Telstra being this giant global telecom, the stakes for its digital transformation were particularly high—and Rob and his team did a really great job leading the charge.
So, I’ll be interested to hear what they plan to do next.
Let’s go to that conversation now.
STEPHEN W. MAYE
Rob, given that transformation projects really by their nature are emergent and often evolving, how do you define what these initiatives are supposed to deliver, and then, furthermore, how do you track progress against those outcomes?
Thanks, Stephen. It’s a really challenging one because I think the key issue with many transformations is they often start with trying to correct a historic issue or a sort of historic underperformance. Yet they really should be focused around trying to position an organization for a future. And so when you break that down, the emphasis has to be in the early stages around what’s the real purpose of this transformation? And as a result of addressing that purpose, what’s the end outcome? What’s the big strategic goal, the big strategic changes and shifts that will occur in the organization. If you can articulate what the organization will look like, what those big shifts will be, that’s what you’ve got to attach yourself to. Then I think it becomes, given most transformations occur over a two or three year or longer time frame, is breaking that down into some really clear discernable progress markers along the way. I think the challenge often with transformations is that we start with a bit of a fuzzy why and a fuzzy set outcomes, and it’s only natural then that what takes over, because it’s comfortable, is all the detail around how we’re going to do it. And the measuring the inputs of how we’re going to do a transformation, by default becomes the measures of success. But as we’ll appreciate with any transformation, over a longer term all the various things that can occur, measuring the how you’re doing things and all the sort of inputs is probably fraught with displeasing someone along the way.
STEPHEN W. MAYE
Make that tangible for me. You’re talking about this danger or this pitfall of getting too quickly and maybe too deeply focused on how we’re going to do it, while, to borrow your words, the intent is still a bit fuzzy. Give me an example of what that might look like.
I can probably talk to an organization I’ve worked with in the past. Where it was going through a transformation that was essentially around full automation of its back-end processes. The current processes were archaic. They were delivering very poor customer service, and they were extremely expensive. So the rationale for change was really clear. The what—so what are we trying to achieve by doing the transformation—was sort of a bit less clear. What was missing was what was the outcome we’re searching for? Was it going to be driven by a better customer experience or by customer retention? Was it going to be driven by just the efficiency focus? And now in reality, it probably should’ve been some combination of those two. But in the absence of a deliberate decision, what happened was the cost out focus became the end raison d’etre for that program, for that transformation. So the organization delivered a new set of pledge forms, cost out, etc., but what it lost along the way, and where the transformation was considered a failure, was that it lost the customer. Because the customer wasn’t, that clarity upfront of purpose, as a result you end up with a transformation that technically delivered a more efficient organization, but it delivered a poorer one for delivering customer service, and as a result, we’re doing great on cost but why is it we’re losing customers? Because no one actually really understood that the new systems they put in place weren’t designed with the customer in mind. So whilst they were more efficient at delivery, they were just as archaic at customer service. Does that make some sense?
STEPHEN W. MAYE
It does. It’s a fantastic example.
I want to take the conversation a little closer to home. You of course have been involved in transformation work in a number of organizations. But I want to talk specifically about Telstra where you are. So tell me about the transformation at Telstra. What has Telstra been going through in the last few years from a transformation perspective? What changes did the company recognize it had to make or wanted to make or was compelled to make? And then how have you gone about delivering on those goals?
Yeah, sure Stephen. So Telstra is firstly it’s a very large and multiservice telecommunications provider. So there’s lots of complexity in the nature of the Telstra business.
The state of change in telecommunications has been constant and significant. And when you’re applying that to a complex organization like Telstra, it creates a number of drivers for standing back and saying how do we really position ourselves? Genuinely, not just for today but for five, 10, 15, 20 years for the future to take advantage of these capabilities and remain the preeminent telco in the country. So the message for us became we’ve got to move from being just a telco to be moving into being more of a technological company. And in that shift from telco to tech co, there’s a realization that there was three or four major transformative shifts we had to make as a company. And none of them were going to be easy. And at the top of them was the recognition that our need for being customer focused and delivering services that customers want in a way that customers want, had to be number one.
Then it became about streamlining the nature of our business.
So if we streamline systems, we make them more efficient. The objective of that is not just to save cost, but to actually make it easier for our staff to deliver services to customers and for those services to the customers to be delivered more efficiently. And more consistently at high quality. And with that as well is also our transformation was really around our network, maintaining our network leadership, taking it into the new era.
STEPHEN W. MAYE
Rob, you have been incredibly generous with your time, your insight, your experience, and I appreciate that. I want to ask you one more question before we cut you loose if that’s all right. So if you’re talking with a project professional, someone who has experience in project or program management, but they haven’t really been working in transformation initiatives. Not true transformation initiatives. But they have an interest and they believe they’ll have the opportunity. What is your advice to that person who’s approaching playing a major leadership role in their first transformation initiative?
Well, I think if I go back to the very start, they need to, for their own sanity but also for the clarity of their role and the contribution they’re going to make, is make sure they’ve asked the questions of why, what, over and above the how. Now as project managers we know a big part of that job is also to be about defining a plan and a way forward, so they have to get into the how at some point in time. But I think I would probably emphasize, for a less experienced project manager, to have a version of the how. But make sure if anything that it has a level of adaptability about it. So don’t be fixed. Don’t be operating in a bubble. And therefore, I’d really encourage project managers to focus, continually focus on the technical skills of project managing because you can always enhance those. But I’d focus even more on the stakeholder management. On the communications and the clarity of communicating. On the negotiating and the influencing skills.
And I’d also encourage them to develop broader business acumen. So invest in a real understanding of how the organization works. Because that’s what you’re changing. You’re changing how it works today to something else in the future. And develop a bit more financial analysis, commercial understanding. Because all the decisions you make on a project, have a commercial outcome. And I think if project managers are focused on those parcels of skills, to be the best technical project manager so you understand your tools of trade, have those people leadership and interaction skills, and you have the commercial financial and business acumen, in other words understanding the stuff you’re doing and how it shifts an organization, changes it, whether it's commercial, trade-offs, so on and so forth. I think you are then well positioned to be a genuine change agent.
STEPHEN W. MAYE
Good advice indeed. With that, Rob Loader, executive in charge of capital management at Telstra in Melbourne Australia, has the last word. Rob it’s been great talking with you. I’ve really enjoyed having you on. It’s been terrific, you sharing your experience and insight. Wonderful stuff. Thank you for being here.
Thank you so much Stephen. It’s been a real pleasure.
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