More companies are investing in large-scale transformations as they reimagine their business for the future. This is more important than ever as digitalization continues to change the traditional competitive landscape presenting new opportunities to serve markets and meet evolving customer expectations while also revealing unexpected competitive threats and global challenges.
While companies are increasingly engaged in enterprise transformations, our research found seven in 10 enterprise transformation efforts fail to meet business leaders’ expectations without proper leadership. There’s a new player in the C-suite to help with these expectations — the chief transformation officer.
Who is the Chief Transformation Officer?
The chief transformation officer is a leader with broad experience having backgrounds that span several disciplines with a focus in the technology and business domains. Most have long tenures with the organizations they are transforming, earning trust across functions and the C-suite.
While other leaders and stakeholders view transformations as a threat to current business goals in favor of uncertain future gains, a successful chief transformation officer understands this conflict and excels in uncovering entrenched blind spots. They are not afraid of having difficult conversations to facilitative inventive problem-solving. As trusted leaders, they are comfortable handling organizational friction on the path to aligning stakeholders with different interests behind the transformation vision.
Ultimately, ideal chief transformation officers are highly versatile leaders with strategic visions who understand the importance of building credibility and trust, possess high emotional intelligence and integrity, and are capable of clearly communicating transformation objectives.
Setting Up for Success
But, even the most versatile leader requires the right kind of support. Organizations that incorporate three key attributes are successful with transformation: a well-formulated vision, a permanent transformation office, and a chief transformation officer who reports to the CEO. So, how does a company put these attributes into practice?
It’s important that all of the activities associated with a transformation add up to operational, experiential or financial value creation — for the company, customers, employees, and shareholders. It’s equally important that every individual involved in the transformation understand why their work counts. It is the chief transformation officer’s role to articulate and communicate the vision, value drivers, and transformation roadmap throughout the organization. When individual functions and teams see how they fit in and why their hard work is crucial to the transformation success, it keeps their efforts focused and lessens the risk of tangential sub-projects siphoning resources.
A permanent transformation officer who uses formalized methodologies can instill adaptability and speed into enterprise transformation. These methodologies facilitate alignment among vision, strategy, and implementation, and help coordinate multiple concurrent efforts. Interestingly, we found that transformations that use formal project management techniques to a significant degree had a higher rate of complete success than those that didn’t.
The C-level title signals that top management is serious about the transformation and wants to see it succeed. Formalizing the role makes the very difficult job of chief transformation officer easier. When chief transformation officers report to the CEO, it increases their chances of success by communicating the value of the changes they are spearheading and providing clear objections and intentions. A chief transformation officer can make sure that the transformation vision is properly disseminated throughout the organization, and, with the right support from the CEO, an executive in this role can better orchestrate the transformation and deliver clear expectations.
Once the vision is set and the transformation office is in place, it’s time for the chief transformation officer to put the plan into action. No two transformations are alike, but at the core, they are all centered around achieving a strategic vision, fostering financial growth, and enabling a more nimble, responsive organization.
There are five key components we recommend to a transformation framework:
- Vision – chief transformation officers must set a compelling vision with purpose, articulated with precision, and communicated clearly to guide the organization.
- 360° Value – Leading chief transformation officers should establish a 360° value-driven approach that identifies, measures, and ensures progress towards business outcomes.
- Integration – To ensure the vision and value are achieved, chief transformation officers will need to create end-to-end integration of transformation plans and solutions that provide the framework and architecture to align initiatives and pivot quickly.
- Governance – chief transformation officers must establish clear decision-making authority and transparent reporting, enabling the transformation to move at speed and adapt to change.
- Talent – It is critical for the chief transformation officer to engage the right talent at the right time, enable leaders as catalysts, build skills for the future and embed the new ways of working into the organization.
Ultimately, the chief transformation officer’s goal is to build a permanent “changing capability” or business-wide ability to welcome and adapt to change, and to continually seek improvements. With the appointment of this leader, enterprise transformation has the focal point needed for a shift. With this leader’s guidance and support, bolstered by the efforts of a permanent team, the organization can embark on a cultural revolution where parochial mindsets are replaced with a “changing capability” that fosters organization learning and assumptions about how to work.