In this fourth article in a series on corporate transformation focused on my experience in the GCC I look at how to execute a corporate transition. In the first article of the series I described how I use a SWOT matrix to define four different corporate states and the relevant strategy for each state. This article focuses on strong firms in stressed markets. Such firms need to transition their product and service offerings to meet the new challenges of the market. This is the simplest form of corporate transformation as the company is starting with a strong management team and the market challenges are known. At this point an organizational diagnostic has been performed and an internal team has been assembled. In terms of strategy, the triage in terms of removing executives is probably unnecessary. What’s left is executing an adaptive strategic plan.
Don’t just give a man a fish
The conventional approach to change management is hiring consultants to map out the current state of the company, the market direction, the future state of the company and to provide the transition plan. Although a solution is provided the client is left to figure out how to execute the change plan on their own. This like giving a man instructions on how to fish. If you’re a fisherman, you know that this doesn’t work.
A relatively more recent approach is to hire the likes of Alvarez & Marsal or AlixPartners who provide an interim management team to lead the change management project. This solves the issue of how the change plan is executed. But the client still hasn’t learned how to fish, they have simply paid someone to fish on their behalf.
My approach of leading a team assembled from the client’s employees allows for not only knowledge transfer but also direct experience and practical skills transfer. This difference in philosophy means that my goal is to build change management capability into the company and allow the company to then effectively manage the change on their own. This is an important difference to simply managing a single change process.
Teaching a man to fish: Organizational roles and functional descriptions
The basic building blocks for a corporate transition is documenting where you are, where the market is heading and what the target operating model is to take advantage of the new market direction.
A transition involves from moving from one position to another. This means knowing where the company is today and where it is going. Positioning activities conventionally include looking at current strategy, performance, vision, mission and benchmarking against the market. This is important but only tells you how the company has performed, what the company’s goals are, and how competitors are performing. What it doesn’t tell you is what is the company actually doing.
The conventional approach to understanding how a company operates involves looking at job descriptions, processes and procedures. As I discussed in my article on the organizational diagnostic this information for what is actually happening is rarely available. Even if it is, it is too much detail as it looks at individual roles and tasks. I find it more effective to take a step back and look at this from a higher level using department role descriptions and the functions that they might perform. Rather than describe it I will give some examples from a direct lending company I was founding.
I start at the top and map out the basic roles of company which I list as part of the CEO Office’s role. This should include all the major responsibilities, operations, and business lines. This does not have to actually map to the current organizational structure of the company as roles and functions often evolve without evolving the organizational structure. The idea is to capture what is currently happening or expected, not what people wish was happening or should be happening, and having a team of client employees is critical for this. This type of functional description is also used in determining the target operating model.
CEO Office Functional Description
Once the top level organizational roles and functional descriptions have been documented I then work with the project team to drill down into each role / functional description. Below I give examples of two expansions on the roles and functional descriptions for the Local Business Development role.
Business Development Role Breakdown and Research Functional Descriptions
In the above case we break down Business Development – Local into five subroles. We then expand on the first subrole which is Research. Along with each function you will see that we also try to capture existing KPIs. Even if these do not exist, we ensure that we assign relevant KPIs when we develop the future target operating model.
Client / Investor Relations Functional Descriptions
Market trends and target operating models
As I discussed at the beginning of this article in a corporate transition the executive management is competent and the market is stressed. A competent management is able to understand what the new market trends are. There is merit in bringing in consultants to map out the competitive landscape: competitors are more likely to talk to consultants than to their actual competitor. This phase of a transition is standard, although I tend to put far more trust in the competence of the company’s current management to understand the market.
The description of the target operating model is where conventional change management doesn’t work. It dives right into job descriptions, processes and procedures without the intermediate step of describing the organizational roles and functional descriptions as I outline above.
The last step in executing an effective corporate transition is the project management function.
Executive project management: simple approach, challenging execution
Successful project management of a transition is the biggest challenge that I see companies face. Below are more views on how to handle this.
The dream: A management team meets to deal with an opportunity or challenge. After some discussion a decision is made. Goals are decided. A project leader is appointed. A short number of weeks later the project leader calls a management meeting to present his deliverables. Management agrees that the deliverables have been met. The project is closed.
The reality (you know where this is going, don’t you?): A management team meets to deal with an opportunity or challenge. After some discussion a decision is made. Goals are decided. A project leader is appointed. Time passes. Nothing happens. The opportunity starts fading, or the challenge gets worse. More management meetings are called. The team leader gives his excuses. Management update the goals. This cycle is iterated until the opportunity disappears or the challenge becomes a crisis.
This happens repeatedly in nearly every company that I have seen. It doesn’t get resolved because executives think the solution is to hire professional project managers. Yes, you read that correctly, professional project managers are the reason that executives can’t manage projects.
The problem here is the difference in complexity of projects run by executives versus those run by professional project managers. This in turn drives the complexity of the tools needed. Applying mission critical project management tools to designing and executing the first moon landing is completely different from a project to roll out a new marketing campaign.
The choice that the average executive faces in terms of tools and techniques is unfamiliar software that requires hundreds if not thousands of inputs and near real-time updates, all the way to Microsoft Outlook, i.e. email and a to do list. So what can be used as the middle ground?
Executive Project Process
The overall project process for an executive project is similar to that of a formal project. I’ll discuss some of the important elements that might differ or should be highlighted in this process.
Initiation
Absolute clarity as to why the project is necessary is important, otherwise you end up with zombie projects all over the place that use up resources but never finish. This means not only clarity on goals but also on what existing alternatives might exist that satisfy the needs of the business.
Major goals and constraints need to also be clarified and implicit assumptions identified. Once all of this is done then a second sign off from management is necessary. This might sound bureaucratic but it saves a lot of time and energy down the line.
Planning
The work break down structure, or listing every single task necessary to complete the project, is rarely necessary for an executive project. Major milestones need to be identified and, to borrow a concept from Getting Things Done, next actions need to be identified.
Determining the next actions in a project, i.e. the smallest tasks that need to be accomplished to move the project forward to the next step, is far more difficult than it seems. The reason is that we have been brainwashed from childhood to believe that “Do Homework” is a task. It isn’t, it’s a mini-project.
More importantly the project team will rarely agree on what the next action is. Invite two friends over and try to assemble an IKEA cabinet. I predict that you’ll get into an argument in the first 30 seconds, and that’s with detailed instructions.
Execution
For the executive project there are three main issues here. The first is to hold a project meeting every one to two weeks when the previous meeting’s next actions are reviewed and new next actions are agreed. A simple rule of thumb that actions more than a week overdue are red-flagged helps keep things moving.
The second issue is that everything material needs to be documented and quickly circulated no more than 24 hours later. This keeps momentum going on the project.
The last issue is stakeholder communication. At the executive level corporate politics is lethal. Stakeholders need to be continually appraised individually and collectively both informally and formally to ensure that the project remains healthy and relevant.
Closing
Political integration of the deliverables is the final issue that an executive faces when managing projects. There is no use providing an operational deliverable if it is not then politically accepted. It is naïve to think that simply meeting all technical goals of the project is enough, a political integration campaign needs to then be launched to have the deliverables deployed.
Lessons from Experience
The absolute key to successful executive project management is the ability of the project team to effectively determine the next action and to do it on a regular basis. For those of you with a project management background this is just the work breakdown structure distributed over time.
The other main issue is monitoring delays. If a task is delayed more than two days then team members need to be trained to immediately seek help from the project manager. In terms of where the problem lies, the first thing to review is if the assigned next action is actionable and if it is truly the next step, i.e. there are no antecedents.
Training
If an executive level project team is having trouble and is looking for training, then they should hire a professional project manager but should tailor the training to their needs.
The focus should be on being able to develop next actions. Lots of practice and case studies would be useful here, and the professionals certainly have plenty of them. This would also be a good exercise to practice estimating resource needs per task, especially the time required to complete the task.
Other training that would be useful would be exercises and case studies in reviewing stalled tasks and analysing what the issue is as well as how to resolve it.
Exceptions
There are exceptions to this less rigorous approach to executive project management. With complex projects or high risk projects executive project managers should revert to more formal approaches of project management and this is where professional project managers become invaluable.
In the financial services industry operationally complex projects involve such areas as IT and brokerage operations. High risk projects include anything with high regulatory scrutiny and operations relating to large or frequent client or proprietary funds.
Project Management Conclusions
Project management tools range from pen and paper to electronic task lists to spreadsheets to dedicated project management software. The techniques are similarly varied. Success comes from selecting the right tools and techniques not just for the project at hand but in terms of your whole project portfolio.
Removing project management complexity that is not necessary to your project not only reduces costs and time to delivery but also greatly improves the probability of success. Simple tools and techniques are more likely to be learned, retained and applied correctly.
Conclusions
Corporate transitions are the easiest of the four types of corporate transformation. The key differences to conventional transitions are two-fold:
- Understand the current and target organizational roles and functional description.
- Effective project management.
Other than that I borrow heavily from the conventional process, in particular mapping the market trends.