Feb / Mar 2015 Issue # 02bi-monthly magazine for successful business transformation

Where’s My Key to The Boardroom?Beyond keeping the lights on, many CIOs struggle to demonstrate value to the C-suite.

Discover ways to counter the four attack strategies that are launched upon good ideas.

While CEOs steer strategy, they also need to ensure their firms have the capability required to realise the value promised by strategy.

Take a look into the organisation behind the development of the new breed of transformation tools.

The Business Transformation Academy

How to Defend Good Ideas

The CEO’s Gap Between Strategy and Value

TRANSFORM2

Welcome

If you are reading this publication, there is probably no need for me to preach to the converted, but I want to share a great analogy with you. Because there are some who still do not fully appreciate the need for digitally enabled business transformation. It might be because they have always lived in an operational environment, or a raft of other reasons.

In his book ‘Reality Check’ Guy Kawasaki explained that ice harvesting ended as a profession because other people with different skills brought electrical refrigeration to the home. So who would buy from the iceman after that?

These days, businesses need to transform themselves and their leaders need help them do that with the one thing that is changing our world more than anything right now - Digital Capabilities.

If leaders are not committed to transforming their companies to become digital enterprises and to gaining and maintaining competitive advantage, they will almost certainly follow in the steps of the iceman and their ice companies. They will melt away over the digital decade that follows and add to the growing list of great companies that once thought they too formidable to get wiped out by a digital wave.

Enjoy the read!

Rob Llewellyn- encouraging better business transformation

Rob LlewellynFounder and

DirectorCXO Transform

Being SocialJoin CXO Transform on your preferred social media channels.

LinkedinWebsite Twitter Facebook Podcast FlipBoardGoogle+

3TRANSFORM

Summary

Where’s My Key to The Boardroom?04

The Business Transformation Academy08

How to Defend Your Good Ideas

The Board Directors’ Programme at Henley

09

10

Is Your Firm Faking It? 11

New Appointments in the News12

The CEO’s Gap Between Strategy and Value

The Challenge of Change

13

14

Change Creates Fast CaterpillarsWhile Transformation Breeds Butterflies

TRANSFORM4

Where’s My Key to The Boardroom?

It’

Many CIOs are still not given a full-time place amongst the c-suite

How CIOs can get more boardroom time

s no secret that most ambitious CIOs are committed to the business. But beyond keeping the lights on, many struggle to demonstrate

value to the C-suite. Neither is it a secret that the C-suite want a CIO who, when in the boardroom, engages in business conversations that are rooted in value, return on investment and competitive advantage. Systems, enterprise applications and core infrastructure are vital to support business-as-usual, but they are not the stuff that business transformation conversations in the boardroom are made of.

CIOs need to understand business priorities and steer business leaders towards creating new value and competitive advantages by leveraging digital technology. This is digitally enabled business transformation, which is fundamental to any CIO who aspires to spend more time in the boardroom.With the right tools, leadership qualities and transformational-mindset, the CIO can educate business leaders and be seen as an enabler of innovative competitive advantage, rather than being accused of operating a cost-centre that needs to focus on slashing its overheads.

Here are eight fundamental points that provide practical steps that any technology leader can take towards digital enterprise transformation. Steps that have already been taken inside some of the world’s leading organisations.

How do we getting started?You need to select a strategic management toolset designed for digital transformation. No IT leader will be unfamiliar with the likes of ITIL, TOGAF, CMMI, ASAP and other tools that were designed for traditional IT, and which have served traditional IT well. Now it’s time to become familiar with the latest tools designed for digital transformation such as the Digital Capability Framework (DCF) and the Business Transformation Management Methodology (BTM²). DHL, Unilever and SAP are just three organisations that have leveraged the DCF and BTM², and they are also scalable to small to medium sized organisations in the way that traditional tools are. Whichever transformation tools you select, make sure they do not tie you to any one consulting firm, business line or technology.

What is the digital transformation solution?

5TRANSFORM

How do we know what capability we need?Whether it’s a member of your staff or an external consultant, you need someone to guide you in leveraging transformation tools such as the DCF and BTM². Then you are ready to plan your journey and use Digital Capability Maturity Models to conduct capability assessments of your organisation’s digital enablers and digital goals. Then establish where you need to be and how to fill the gaps in innovation capability, business transformation capability and IT excellence.

How can we engage business leaders in the process?Involve your business leaders in the process from early on. Get them involved in reviewing best practice Digital Use Cases with you, and particularly in the innovation of your own Digital Use Cases, which are the keys to their business goals and the company’s aspirations of competitive advantage.

How do I make this a business-orientated exercise?Again you need to involve your business leaders in the analysis of the Digital Use Cases and agree the benefits, value propositions, risks, etc. Hopefully you can already see how this is a powerful transformation process that facilitates better IT-Business collaboration, buy-in and relationships.

How do we agree a roadmap?Once again you need to work with business leaders to prioritise Digital Use Cases and develop a digital transformation roadmap. You need to agree a roadmap which is agile enough to cope with future digital change and which delivers value towards achieving prioritised and a balanced portfolio of improvements across the business landscape.

Who pays for all this?The next step is to create persuasive business cases with your primary goal being to help people decide whether to invest sufficient resources. The previous steps will have already secured the hearts and minds of business leaders and you will have together agreed the key information that will underpin the business cases such as value propositions and benefit profiles. If you have done this well, your business cases will be no-brainers that will secure the resources you need for the new projects and programmes. Even when you do you encounter unexpected resistance, you can count on the business leader(s) who have been part of the journey with you to fight the cause.

Select a transformation management methodologyDuring the assessment stage, you will have addressed your transformation capability and the gaps that exist. BTM² is integrated with DCF to do this. It would be prudent to adopt a business transformation management methodology to underpin all your business transformation efforts. BTM² is a proven holistic business transformation management approach that will not tie you to any one consulting firm. It is also accompanied by training and certification tracks (BTPM and GBTM) should you wish to develop your team’s transformation management capabilities.

Kick-off new projects and programmesBy now you will not only have a best practice approach with which to manage your new transformation initiatives, but you will also have the buy-in of business leaders and adequate resources to successfully drive benefit-driven transformation. This in turn will help business leaders achieve business goals using digital technology, and enable the C-suite to see how you as a transformation leader are orchestrating return on investment and new competitive advantages.

Visit www.cxo-transform.com/101

TRANSFORM6

IT BUSINESSCOLLABORATION

The Boardroom KeyWhat has been described in this article is not rocket science. It is however derived from extensive research, collaboration and development between leading transformation practitioners and academics.

It does not need to be facilitated by a large 3rd party, a digital solution or teams of consultants, but it does require commitment to:

Done well, this will facilitate successful digitally enabled business transformation, and is the surest way that any CIO will gain and maintain a key to the boardroom.

1. Adopt new strategic management tools such as the DCF and BTM²

2. Think long-term and avoid compromising the steps above in any way

3. Stay focused on business goals as opposed to technology solutions

Visit www.cxo-transform.com/101

TRANSFORM8

The Business Transformation Academy

Rob Llewellyn writes that in 2009 the SAP Business Transformation Services unit gave birth to the Business Transformation Academy (BTA) - a business network for researching business transformation and business transformation management topics.

Until then, it was clear that there was very little documented knowledge on business transformation available. The knowledge that did exist was buried in the heads of experienced transformation managers, and this led to an inadequate understanding of why many complex transformation initiatives fail.

To address these challenges, industry representatives, leading academics, and various SAP experts were brought together and a BTA kick-off meeting was held at the start of 2010.

BTA MissionThe BTA’s mission was defined as: generating and offering unique expertise on the drivers, underlying strategies, and practices employed in major transformation projects. However, unlike other consulting organisations, the Academy creates and shares knowledge as part of a global interdisciplinary expert community comprising industry-specific transformation professionals and top academics. It continuously enhances and expands this knowledge by organising regular conferences, collecting case histories of past transformation projects and compiling a handbook on business transformation management.

In 2012, the BTA considerably extended its research focus. In discussions (see Executive Briefings) with different companies from various industries

BTA experts recognised that the Academy’s holistic management approach, BTM² (Business Transformation Management Methodology), can be adopted and adapted for almost every transformation situation and every industry. This has led to the decision to broaden the organisation’s research activities to encompass industry-specific topics (industries include: Insurance, Banking, Oil & Gas, Logistics, and Retail) and horizontal (non-industry-specific) issues and technologies, such as Shared Services 3.0, Next-Generation IT Strategy, Mobility, In-Memory Computing and Cloud Services.

Thanks to its close relationships to SAP industry hubs and companies within its network, the BTA is currently concentrating on developing valuable knowledge in the above-mentioned areas.

Education ProgrammesA direct output of the Academy has been the development and delivery of business transformation education and traning programmes. These provide those in positions of responsibility for business transformation projects and programmes with the right skills for their complex task. They also enable experienced consultants and programme managers to work as trusted advisors within the scope of transformation initiatives.

In June 2014, Rob Llewellyn the founder of this publication you are reading, attended one of these programmes, and in March 2015, a new group of transformation professionals from around the world will be welcomed to Berlin by the BTA and its partners for the latest two-week Global Business Transformation Master Programme.

HEAD OF THE BUSINESS TRANSFORMATION ACADEMY

Professor Dr. Axel Uhl has led the BTA since its birth and when asked to condense his thoughts about how far the BTA has come in less than six years he said: “The collaboration between the BTA and Rob Llewellyn has always been a best practice example of how we believe that today`s knowledge sharing should work and it has proven to be very helpful. It is my pleasure to be part of Rob`s business transformation community and I am proud to have him being part of our community.”

9TRANSFORM

How to Defend Your Good Ideasn business at every level, we inevitably encounter those who do not agree with good ideas, regardless of how beneficial or sensible

the ideas can seem. For one reason or another, well-intentioned or not, people can launch an attack on what we and others feel are ‘good ideas’ in an effort to de-rail an initiative.

Getting attention and buy-in through effective communication helps minimise the chances of this happening, but if we haven’t achieved sufficient buy-in before we come to present an idea to an audience of stakeholders, being prepared for the opposition and their tactics is wise.

In his book with Lorne Whitehead, John Kotter explains that most attacks are based on one of four strategies:

ConfusionFear mongeringDeath-by-delayRidicule and character assassination

Most of the little bombs that these four types of attack create can be defused, and being prepared for them can often make the difference between having an idea canned and signed-off.

By remaining calm and respectful in our responses to any attack, we will slowly win the hearts of the audience. Being confident in the situation helps us do that, and being well-prepared helps increase our confidence.

Responding in a highly emotional and irrational manner will not help win the hearts of the audience – in fact quite the opposite. It will certainly let our feelings be known and give someone a piece of our mind, but that is not the important objective here, and such behaviour is likely to reduce our chances of securing the buy-in we need. In fact, many generic attacks on good ideas are successful because they trigger emotions, which in turn trigger a dysfunctional attack back.

I

It is also important not to get drawn into complex detail and keep responses short, clear and full of common sense. This will help win ‘minds’ and avoid causing any more confusion than the attacker might have already created.

In our endeavour to win buy-in we need to:

Gain attentionWin heartsWin mindsMonitor the broad audiencePrepare in advance

There are never any guarantees to whether we will succeed at winning buy-in. Consider the effort that candidates for the American presidency put in to winning the hearts and minds of millions of people, and the fact that only one person will secure enough buy-in (hearts & minds) to become President.

Kotter and Whitehead have prepared a page full of typical “attacks and responses” which will help stop verbal bullets from killing good ideas. From “this is not the right time!” to “it won’t work here, we’re different!”

Find 24 attacks and responses here:www.kotterinternational.com/insights/24-attacks-responses-buy-saving-good-idea-getting-shot/

TRANSFORM10

PROGRAMME DATES: 18-19 JUNE 2015 AND 1-2 DECEMBER 2015For details, contact the programme advisors

T: +44 (0)1491 418767

E: exec@henley.ac.uk

Or visit: www.henley.ac.uk/executive-education/course/the-board-directors-programme

The Board Directors’ Programme at Henley

he role of a board is unique to each organisation, and complex. Being a member of a board is not what it used to be, and research suggests that

many boards are ineffective – many to the point of being out of touch with the challenges the organisation faces.

Compliance is necessary, but mentoring delivers tangible differentiation Board members are often surprised by the reality of their role. They are ill-prepared and ill-equipped to deal with the challenges they face.

Professor Andrew Kakabadse is the Programme Director of a two-day programme at Henley Business School in the UK and his research suggests that only 20% of global corporations operate with a truly ethical approach, and the vast majority of boards are not respected by their managers – they see them as being impotent and not appreciating the reality their organisation faces – invariably with good reason! And yet ethical organisations are statistically more likely to perform better in the medium- to long term, and appear to suffer no commercial disadvantage even in the short-term.

T Programme Benefits

The programme at Henley will help participants develop the knowledge, skills and awareness to enable them to:

• Inspire and lead others to fulfil their individual and collective potential through mentoring• Recognise the value of sustainability versus financial return, and the value of morality, loyalty and a positive reputation• Appreciate the difference between performance and compliance, and use of discretion• Fully understand your role and obligations as a board member• Trade effectively through a range of dilemmas and challenges• Identify your real competitive advantage(s) and establish your unique competitive space• Apply your new-found capabilities to your day-to-day challenges and issues.

The programme emphasises the added value that can be gained from acting responsibly and ethically, mitigating risk and avoiding the pitfalls of the cultural and legal nuances of international trade. Participants can expect to enjoy enhanced organisational performance when board members fully understand their roles and obligations, and appreciate the value of inspiring closer team working and shared goals.

11TRANSFORM

Is Your Firm Faking It?

Holistic top-down & bottom-up enterprise risk management enables senior management to make better risk-reward decisions, connects senior management with the rest of the business on risk management, and embeds robust risk management throughout the organisation.

Ironically, while risk is the greatest threat to the future of any organisation, it is sometimes low on the executive agenda and there are still companies that fail to adopt a formal approach to risk management, and make a superficial attempt to pretend risk is being addressed in a professional manner.

False Impressions and FearMost organisations and their leaders excel at “talking” about the importance of risk management, but how much of this is genuine? Senior management often present a false impression of interest in an attempt to show their stakeholders that they are “doing the right thing” and managing risk, when in fact, it is often a facade, and risk is not being managed well at all.

The inexperienced are afraid of risk management and some mid-level managers are often reluctant to publicise risk to executives. Failure is still even unmentionable in some high-level meetings where people paint rosey pictures, with perhaps a touch of amber thrown in just to make it feel real – while the dirt remains under the carpet.

The consqeuence of this naïve behaviour is that things change, assumptions become false, expectations are not met and suddenly people find themselves facing far greater problems than they needed to be.

ISO 31000 Principles

Well-run organisations take a holistic approach to managing risk and adopt 11 principles of ISO 31000, which ensure that risk management …

But even those that are not interested in ISO 31000 should at least be asking:

1. Is there a risk management facade festering within the business?2. Who are the perpetrators of this dangerous doing?3. What can be done to address this crime?

Only by identifying, understanding and recognising the potential for failure can failure itself be avoided.

“Companies in the top 20%

of risk maturity generated 3

times the level of EBITDA as

those in the bottom 20%”

- Source: Ernst & Young(Turning Risk into Results, March 2012)

Creates and protects valueIs an integral part of all organisational processesIs part of decision makingExplicitly addresses uncertaintyIs systematic, structured and timelyIs based on the best available informationIs tailoredTakes human and cultural factors into accountIs transparent and inclusiveIs dynamic, iterative and responsive to changeFacilitates continual improvement of the organisation

TRANSFORM12

New Appointments in the News

Mitchell Klaif Time Warner has named Mitchell Klaif executive vice president and chief information officer. Klaif was previously CIO of Time - Time Warner’s magazine arm, where he spent the last year focused on its spinoff into an independent company. A spokesperson said that Klaif kicked off the new role in January and reports to CFO Howard Averill.

Mandy Ross Lottery and gaming company, Tatts Group, has appointed Mandy Ross as its new CIO. Ross has replaced Stephen Lawrie, who quit his post as CIO, a position he held since 1999. Ross is now leading the group’s technology team and operations, which employs 350 staff. In this role, she will develop the organisation’s long-term technology and digital strategic roadmap.

Hans Wanders Hans Wanders has been appointed the new chief information officer (CIO) for the ministry of internal affairs and kingdom relations, from March. Wanders will also hold the position of director of information technology policy at the Directorate-General of Business Organization and Management, under minister Stef Blok.

Tyler Best Hertz Global Holdings welcomed Tyler Best to become its third CIO in about 15 months. Best’s experience managing costs at the Yellow Pages and other companies will be invaluable at Hertz, which plans to cut $100 million in costs. Hertz president and CEO John P. Tague said Best has “consistently delivered bottom-line improvement throughout his career.”

Ed Garcez Westminster City Council in London is set to lose its CIO role in April in an update of its shared services partnership with two other London authorities. Ed Garcez will become the single CIO for a tri-borough partnership of Westminster, the London Borough of Hammersmith & Fulham and the Royal Borough of Kensington & Chelsea. All three councils are cutting roles to reduce duplication, as they embark on a plan to share a single IT division.

James Fairhurst Brightside Group has announced that James Fairhurst is their new CIO. Fairhurst was CIO at Hastings for almost six years and was part of the senior leadership team involved in the management buyout from its previous owner IAG in 2009. CEO Andrew Wallin is reported as saying, ”I am confident that he will help us to swiftly develop a future proof platform capable of adding real value to the business.”

Digital Transformation Office The Commonwealth Government of Australia will establish a Digital Transformation Office (DTO) within the Department of Communications so that government services can be delivered digitally from start to finish and better serve the needs of citizens and businesses. The DTO will operate more like a start-up and comprise a small team of developers, designers, researchers and content specialists working across government to develop and coordinate the delivery of digital services.

13TRANSFORM

The CEO’s Gap Between Strategy and ValueCEOs put their head on the block when making bold promises to the Chairman about strategy, and often that strategy depends on business transformation. But when strategy cannot be followed by successful business transformation, those bold promises and the CEO could have a bleak future ahead of them.

Mind The Gap78% of global CEOs surveyed in 2014 by PwC said that they expect to transform their organisations, yet only 54% were satisfied with their ability to execute on their strategic vision. This means that almost half should be doing something about that, if they are not to be sceptical about their ability to deliver upon the bright picture they painted for the Chairman. They quickly need to acquire the business transformation management skills, attributes and capabilities, along with a proven business transformation management approach such as BTM², if they are to be optimistic about their strategy becoming reality.

CEOs Are Re-organisingOn a positive note, a separate PwC report on Global CEOs stated that 80% recognise the need to change their operating model. Once again it is vital that leaders ensure that any new operating model “enables execution”. In other words, once leaders reach clarity about who their organisations are and what they do, they need to define how to do it using the right business transformation management capability and approach.

New Value in The Market

Two thirds of leaders in a Strategy& survey admitted they do not have the capabilities needed to create value in the marketplace. When the availability of digital technology is more abundant, affordable and disruptive than ever, this should be disturbing news for shareholders.

CIOs are now well positioned to begin creating value for their companies by leveraging the latest strategic management tools such as the Digital Capability Framework (DCF). Finally the CIO has a way of taking their line of business leaders on a journey to new value and competitive advantage, which means that CEOs need transformational CIOs who can do far more than keep the lights on. These CIOs need to be equipped to mature their digital transformation enablers such as innovation and transformation capability, if they wish to improve line of business digital maturity and ultimately create new value and competitive advantage.

The Cost of Not Closing The Transformation Gap

A company’s inability to successfully undertake business transformation, whether digitally enabled or not, can range from the loss of competitive advantage to the loss of the company’s future. When 40% of the companies at the top of the Fortune 500 in 2000 were no longer there in 2010, CEOs should heed the lessons learned by many who have stumbled before them.

TRANSFORM14

Tracing the journeyIt started in 1997, when the author, Lalit Jagtiani and a couple of other employees in their workplace were christened “Change Agents”. Granted the mandate of driving change in their organisation, life for them and Lalit hasn’t been the same since then.

As Lalit and the Change Agents travelled across India to various offices, departments, and units of the organisation to initiate a transformation programme, they experienced a Change. It seemed that these teams-on-a-mission, were more than mere couriers of a corporate vision of transforming the organisation and its employees.

Consumed with the principles of Change Management, transformation of the organisation was no longer a task for the Change Agents. It became their identity, and while the organisation and its people were figuring out the aspects of transformation, the author was undergoing an internal metamorphosis.

The Plot of The Challenge of Change

The Challenge of Change tells a story of how Change Management actually happens in an organisation. Unlike many management books that dwell on structure, content and guidelines of Change Management, this book is a saga of the author’s own experiences. The book is a summary of vignettes of Lalit’s experiences, in transforming organisations across Asia, that are strung together in a sequence that would form the structure of a Change Management intervention in an organisation.

The book will take its readers on an adventure trail in an organisation, and the situations that appear throughout the book are what practicing professionals will experience. The issues, blocks, concerns, highs and challenges that a Change Manager will most certainly experience in driving Change in an organisation is at the story’s core.

Stay tuned to social media for launch details.

The Challenge of ChangeA new book due out in 2015 by Lalit Jagtiani

Rob Llewellyn - Transformation Consultant

GET THE RIGHT CAPABALITY ON BOARD

Because no ambitous journey will succeed with less

As trusted advisors to transformation executiveswe provide the capability

which enables strategic intent

• Digital transformation roaDmap programmes

• transformation recovery programmes

• trusteD aDvisory services

contact us for information or to request a free consultation +44 20 3239 3525 hello@cxo-transform.com

www.cxo-transform.com