Transform, Improve, or Modernize?

Naturally, business leaders are impatient for change and fear being overtaken by competitors or market events. To keep pace, they want to see bold moves rather than incremental steps.

At the same time, there is a growing weariness of transformation initiatives that ‘bite off more than they can chew’ only to leave people frustrated and disappointed.

It often seems as if there is a fundamental battle between those who want transformation and those who believe in continuous improvement as the path forward.

One of the panelists went so far as to propose a ban on the word ‘transformation’. This caused great debate, as explored below.

Small, continuous improvements can lead to significant benefits over time and are often easier to manage and implement. But they risk not moving fast enough, with the organization possibly being overtaken by change as a result.

So, how to reconcile the desire for bold moves, with the lower risk strategy of steady progress and incremental change? To be more precise, when to transform and when to modernize or improve?

Q: Where do you need to (a) improve, (b) modernize & (c) transform?

As one IT leader explained: ‘Sometimes it’s about continuous improvement and progressive modernization. Other times it is about transformation. You must know which is required and when.  Then, you need to manage accordingly’.

Striving for Continuous Improvement

Leaders need to ‘hoover up’ small incremental improvements anywhere that they can.  Attending to the ‘hygiene factors’, as well as the strategic issues, is important. For example, where users are complaining; ‘I just want to be able to log on easier’, or ‘can’t we tidy the data to make it easier to use?’ In finding such quick wins, it can be helpful to look for the points of frustration.

Moreover, with the emergence of technologies such as AI, it is often necessary to adopt a “crawl, walk, run”. Being a first mover or early adopter can be risky.

When You Have to Transform

Nobody likes to talk about ‘rip and replace’, there have been too many failures. Yet, sometimes there isn’t a choice. For example, where you get to the point, as an organization, that your technological infrastructure is holding you back.

There are times when transformation is the right choice – the only choice. Modernization is a bold move, but it may be necessary if you want to be around for the next 150 years.

For some, ‘transformation’ has become a dirty word! But isn’t the issue more fundamentally about big projects? The bigger, the more complex, and the more innovative any project is, the greater the level of risk and uncertainty. Because transformation initiatives are often the biggest of all projects, they are also the most fraught with danger.

When it comes to all projects, we need to double down on risk management.  As well as maneuvering around unexpected obstacles and setbacks.

Transformation doesn’t mean a return to waterfall methods. The challenge is to transform with greater speed, agility, collaboration, and innovation.

Adopting a Portfolio Mindset

When you look at all the important IT projects planned or underway within any building society you will see a portfolio spanning time horizons (short, medium and longer term) and with different levels of risk and reward. This is one way of understanding what is transformation and what is continuous improvement (see the diagram below).

Moreover, when you look within any transformation initiative, you will likely find a similar portfolio of projects and initiatives too. It is the management of these portfolios of projects that really shapes success.

Q: How well is your organization making its portfolio of projects and initiatives?

The adoption of a ‘portfolio mindset’ is key to recognizing linkages, synergies and interdependencies between work streams, as well as projects and initiatives.