The new way to turn around business performance
Recent revelations of wrongdoing at some of Australia’s top financial institutions should be a wake-up call to the leadership of every Australian organisation. While right now the Royal Commission has put the banks in the spotlight, there are many other businesses, government agencies and not-for-profit organisations that may find their activities under scrutiny – and found wanting.
We are in an era of increased accountability, where every consumer wields a smartphone, every activist group leads a social media army, every employee is a potential whistle blower and every regulator is keen to show it is no light touch.
Boards and executives that seek business as usual risk a dangerous complacency. These leaders would be wise to undertake a positive transformation to set up their organisation for the challenges ahead. All organisations that fall short of their potential, even if they have been spared their own public reckoning, could benefit from a transformation.
Many leaders are unsure how to go about this transformation, so turn to Nous Group to tap into the decades of hands-on experience among our consultants.
Typical transformations have some common pitfalls
Transformation success is typically measured in bottom-line results: higher revenue or lower costs. But many aspects of a typical transformation partnership destroy value rather than create it:
- It is driven by impersonal consulting teams applying a bullish approach.
- It is based on large volumes of business analysis that is not calibrated against internal aspirations.
- It might use a private equity “turnaround” methodology that should only be used in true distressed-asset situations.
- It involves limited engagement beyond the top three leadership levels, reinforcing a sense of disempowerment.
The result? Many transformation programs only deliver a fraction of the value promised:
- Program targets are unrealistic, so leaders are unwilling to commit to them.
- The volumes of data, analysis and reports generated overwhelm and confuse.
- Consultants create dependency on their capabilities.
- The morale of the organisation is severely damaged.
At this point a new consulting firm might be brought in to turn the situation around; this may work, but it results in a huge overspend.
Fortunately there is a better way.
Nous applies six principles to transformation partnerships
Nous Group has helped many clients exceed their targets and avoid these pitfalls. To achieve this, we apply six principles to our transformation partnerships:
- Unlock your people. Your employees understand the organisation and its character, data and processes, and have internal networks that need to be used to create change. A smart transformation program gives them the skills to deliver the transformation and sustain performance improvement, agility, analytics, stakeholder engagement, performance management and more.
- Play to your strengths. Recognise your unique starting point, people, customers and aspirations. By using these as our primary points of reference, our clients have gone much further than their peers. A “cookie-cutter” transformation, based on replicating the practices of other businesses, usually leads to disappointment.
- Choose carrots over sticks. Setting ambitious targets is essential for creating a sense of urgency, while providing transparency of performance is vital to helping people make sensible decisions. Inspiration and energy to meet those targets comes from a clear vision, simple performance incentives and regular celebration of success. If there is underperformance, address it swiftly at its cause, but maintain positive energy whenever possible.
- Keep it simple. Most organisations have a long list of things that could be improved. But laundry lists of initiatives do not constitute a cohesive program. Real value is created when initiatives are prioritised and integrated to achieve a common objective in a unique way that no competitor can match. In a transformation program, trade off comprehensiveness and focus on what is most important.
- Iterate and adapt. Transformation programs require substantial investment, and therefore involve substantial risk. That risk is not only organisational, but personal; careers can be made or broken. So it is understandable that leaders and staff seek certainty up-front. But resist the temptation to offer excessive certainty. Often transformation programs get caught in the planned pathway, losing sight of the outcome and the many strategies to get there. If you are clear about the outcomes you expect, an agile program will deliver faster and at lower cost.
- Choose the right consulting partner. The prospect of consulting support can strike fear into employees. Choose a firm whose staff will become a welcome extension of your organisation. Choose a consulting firm with a style and character that matches your business and the nature of your transformation effort.
Organisations should expect that a transformation is a positive experience that delivers large bottom-line improvements. Positive transformation is possible – but not by following the traditional approach. Nous has developed a contemporary transformation methodology that has proved a different approach can deliver more value than many Boards and CEOs expect.
Joint team helped a business to take back control
Recently a mid-sized financial services organisation spent several million dollars on a global consulting firm. They received hundreds of pages of slides as a “current state analysis”, but they were not involved in its creation so they understood very little of the report or its recommendations, and had no idea how to implement them.
The organisation had two options: To pay many millions more for the firm to continue the work, taking a leap of faith with no real clue about what they would be signing up for; or take back control of their transformation agenda and engage a different consulting partner.
The board requested took the second option and asked Nous for support.
Nous worked with the client to establish a joint Nous-client team, leveraging the skills and expertise within the organisation. The first two days were team training (client and Nous) on core consulting skills, ways of working under pressure, methodologies and tools.
Then, using the previous report as input, the joint team spent 12 weeks analysing and prioritising the actions required to turn the organisation around. It produced a 20-page business case that showed each action and its expected financial return, with a clear implementation plan. The executive and board signed off immediately.
With Nous as strategic advisor, the client has exceeded the benefits in that business case, turning from a projected loss to a healthy profit, and has built change capability throughout its organisation.
Done wrong, a transformation effort can waste millions of dollars and distract organisation from their real business serving their customers and communities. Done right, organisations get onto a consistently higher level of performance – doing more with less without burning everyone out.
Get in touch for more information on how Nous can support your positive transformation.