Developing a vision is critical to steering a business through the medium to long term, providing a tool to ensure that every major decision that is made helps move towards the end goal. But then you have to deliver. How?
Once the thought process around vision is complete to senior management’s satisfaction, all that remains is to hand the vision over to operational managers and let them get on with delivering it.
Except that doesn’t work, because at that point, often no-one knows what to actually do to turn the vision into reality; in the worst case, it may not even be clear where to start. This is a situation we encounter surprisingly frequently.
There is a need for a robust intermediate piece of thinking between developing the vision and starting to make changes on the ground, that involves creating and structuring what we call the transformation architecture that defines the complete set of change initiatives that ultimately enable the vision to be achieved. The stakes are enormous: the entire future strategic vision can be on the line; yet often businesses skimp on this critical step.
Spending an appropriate amount of time thinking about the transformation architecture rather than just hoping to muddle through is increasingly important because in a rapidly changing market environment, it is increasingly the case that successfully achieving the vision requires disruptive change to the business model, or delivery model, or both. Incremental improvements to business-as- usual are unlikely to do the job, but leaving the business to its own devices with no further guidance usually results in exactly that.
A second approach that generally doesn’t work too well is to copy the best-in-class competitor, particularly if the objective is to leapfrog ahead. While benchmarking has its place, if we believe that disruptive change is necessary, then looking at competitors is unlikely to help, unless they are already far advanced down their own transformation path.
Instead, one approach we have successfully used to develop and structure the necessary transformation architecture starts by deconstructing the required change across major business axes into a series of manageable sub-components – which we call themes. Some typical axes and associated themes might be:
- Operating model: themes include: functional activities undertaken; capabilities; revenue model; business processes.
- Organisation model; themes include: standardisation; centralisation; distributed centralisation; cross-border shared services; governance.
- People: themes include: incentives; culture; skills & capabilities.
- Stakeholder management: themes include: employees; investors; market; regulators.
- Technology footprint.
- Data assets.
- Customer proposition.
There may not be an opportunity or need for major change on every axis or under every theme, as this would make for an extremely complex and high risk transformation programme, so one aspect of the approach is to identify and prioritise the key change axes and themes as quickly as possible.
The next step is to agree a set of key unanswered questions that need to be answered, or problems that need to be solved, across each part of the embryonic transformation architecture, in order to progress towards the vision. For each theme within the architecture, essentially we ask what is preventing us from achieving the vision? For example:
- Not agile enough
- Unit costs too high
- Too slow to market with new proposition
- Lack of co-ordination between markets leading to duplicated effort
- Inefficient customer acquisition
- Seen by clients as a technology follower
- …and so on.
We then go through a process of developing solutions to these problems and barriers to achieving the vision. There are a number of ways this can be done in practice, that go beyond the scope of this article. The output of this process leads directly to the development of well-defined individual change initiatives, completing the population of the transformation architecture.
Done properly, with quantitative impact analysis to help develop the overall financial case as well, and a picture of the investment required, this provides a highly structured approach to turning vision into the building blocks of a transformation roadmap in a way that directly links key elements of the vision to concrete initiatives on the ground.
Creating the roadmap itself requires ordering these initiatives in a sensible way, taking account of available change resource and delivery capacity, as well as any externally imposed timescales (e.g. to do with regulatory compliance). The last point to note in developing the roadmap is that it also needs to be built with uncertainty in mind. In an uncertain world, there is a need to move away from a rigid, inflexible transformation programme structure in which most of the value is delivered mainly at the end, to one that is based around the concept of no-regrets moves and option moves, in which flexibility is preserved and value is delivered throughout the transformation, not just mainly at the end.
This is a rather dry outline of how to turn vision into concrete reality that necessarily skims over much of the detail. CVA has a methodology designed to help structure major transformation programmes, which we have used very successfully at major banks; equally we have experience in helping clients develop innovative business and delivery models aligned to a strategic vision, and a well-developed approach for doing so, particularly when the market itself is being disrupted.
If you are interested in talking further on this topic or are facing the kind of situation described here and are considering bringing in external support to answer the question “how do we deliver the vision?”, we would be happy to explore whether CVA can help.