Who should lead Business Transformation?
Beware, lack of certain skills may be hazardous to your business
Should the leader of your business transformation be an industry expert, an employee who knows the company inside out, or someone who is an expert in business transformation (but might not know the company’s industry)? asks columnist Dan Morris. Here are the key skills you need to drive business change.
Many - possibly most - BPM efforts are led by IT. But should they be? To some extent that depends on corporate culture and the willingness of managers to accept responsibility for performance. Today, there is surprisingly little consensus – even among the two major groups involved in improvement; business managers and IT managers.
For me, the answer is obvious, so let’s put this first part of the answer to rest. The answer is it doesn’t matter whether the leader comes from business or IT as long as the business perspective trumps the IT perspective. The simple fact is that BPMS vendors claim to sell about an even number of their products to business managers as they do to IT managers. So today, BPM project leadership may come from either area. But any BPM project leader must focus on the business and how it will change before they think of anything else.
Who is the best individual to lead your transformation efforts?
In addition, it really doesn’t matter whether a BPM project leader is certified by some project management group or other. Project management is not the real issue. There are enough good project managers following different disciplines to make that a moot point.
The real issue is whether the leader of the project should be an industry expert, someone internal who knows the company, or someone who is an expert in business transformation (but might not know the company’s industry). Opinions vary. But, I believe that this is one of the most critical issues that face BPM and BPMS projects. Everything in the project hinges on this decision – approach, ability to think out of the company or industry box, perspective, and decisions of the techniques that will be used.
Many managers that I talk to believe firmly that any improvement or transformation project should be led by someone who is an expert in their industry. Some others narrow the field and believe that these projects should be led by someone from their company. While both industry and company knowledge are important, a focus on this understanding misses the key business transformation skills and knowledge that are critical in driving business change – the experience of actually transforming operations. I believe that this is a specialty skill set and from trying to hire people with it, I find that it is rare.
Let’s look at an analogy here. You are building an expensive house. You are dumping all your money into it and it is an investment. It will be a custom design because you want a competitive advantage when you sell it. However, you want to control cost and you want to insure quality. So who do you trust to build it? You can act as your own general contractor and get tradesman with specialty skills to do the construction. But do you know enough about construction to plan and manage this expensive investment yourself? You can get the industry builder who builds hundreds of track homes and can do the same thing over and over for low cost. Or, you can get the custom builder who listens and has the experience and skill to build what you are asking for. The issue is what do you think is the most important background and skill set? The same logic applies to transformation.
We need to start looking at this issue by asking what might be the most important experience needed in leading either improvement or transformation projects. Then we need to ask, of these skills and experiences, which is hardest to find?
Some examples of the skills that will probably be needed are:
- Political acumen – what to look for and how to leverage it
- Understanding of how to approach selling change to those who don’t want to change
- Understanding of motivation – making people do what they don’t really want to do
- Understanding change management – how to win trust and keep it
- Ability to create the standards and approaches needed to lead the creation of a current state (As Is) definition – what models need to be created and why, what information is needed to be collected and what it will be used for, how to find, define, and validate rules
- Understanding of what simulations and iteration in the future state (To Be) design is all about
- Experience in building an appropriate approach to redesigning the business (processes, workflow, tasks, applications) based on the scope and complexity of the project
- Knowledge of what technical components must be put in place – such as web services, interfaces, etc.
- Understanding of how to leverage legacy applications and data
- Experience in creating appropriate performance management (the role of Six Sigma, Lean, performance monitoring/measurement, etc.) and understanding how to define what to measure as well as how to measure it
Obviously, these skills/experiences are a combination of "how to" experiences related to redesigning the business following a BPM approach, and BPMS skill groups. They have little to do with any specific industry. Performing these projects has shown that this is the experience needed to plan/manage/perform this type of effort. This is what is needed to define the tasks, build the common approaches, and set the standards and techniques that will be followed. Of course, sound project management skills come next. But, we still haven’t gotten to a requirement for industry knowledge or company specific experience.
I submit that the lack of these improvement/transformation skills and experiences offer the greatest risk to these types of projects – much more so than company experience or industry experience. Business transformation experience is actually a specialty experience with specialty skills. These experiences are seldom found in companies unless they have been built internally through trial and error – which few companies tolerate.
In hiring business transformation people with these skills for two major consulting firms when I was their US BPM Transformation Practice Director, I know that finding people with these skills is difficult. We could find people with business vertical skills or with BPMS developer skills. We could find IT people. We could not find people who knew how to deliver business change – especially large, complex change.
Having focused on transformation experience and skills, I must now note that industry knowledge and company knowledge are also critical to the project. There is no debate on that point. But this understanding and these skills should be part of the transformation team. They are not needed in all members of the team or in the transformation project’s definition and management.
Internal vs. External Help
The type and level of experience that I am talking about can be obtained in two ways – hiring the right managers and putting them in a BPM Center of Expertise or by bringing in external consulting support. Neither of these alternatives is clearly the better of the two options - except if you need to move quickly. Then, the consulting option may be best.
However, even where the consulting option is needed to start moving forward, it is suggested that a longer term strategy may be to build an internal BPM Center of Excellence and create the needed perspective, skills, experience, and understanding of business change needed to control risk. Following this strategy it will be important for the person who will take on this role internally to work closely with the consultants and learn through experience.
Regardless of the path to providing this type of management experience, it is clear that a fresh, unbiased view is important in redesigning a business operation. This belief is the foundation for "out of the box" thinking and innovation. In business redesign everything must be questioned and clearly needs to be justified. There can be no pre-conceived limits – except legal and financial ones. Someone in the team must be willing to ask the tough questions and take on the establishment.
The fact is that some managers will buy-in and some will aggressively resist. The transformation manager must be able to work in this environment and he or she must be willing to force issues. How this is done, is experience based. If not done properly, adversaries will be made and even good results will be rejected.
For many transformation and improvement managers, it will be necessary to leverage their experiences in creating new ways to look at business operations and process performance management approaches. All of these approaches to defining, conducting and managing change are obviously based on specialty knowledge and skills. Teaching/mentoring the transformation team of mixed industry experts, company operations subject matter experts, technology experts, legal experts, and production experts is a tall order, but it is a must.
The ability to orchestrate the use of these various specialty skills and apply them at the right time and in the right way is the advantage that the experienced transformation manager brings to the table.
So who should lead an improvement or transformation initiative or project? I have given you my opinion and the reasons behind it. But what do you think? Vote on our LinkedIn poll or join the discussion below. I welcome hearing from you and finding out your thoughts on this topic.