How to make informed decisions in a business transformation

While the COVID-19 pandemic continues to rage in some parts of the world, other areas are seeing the most disastrous impacts of the crisis recede. Business leaders in some places are cautiously able to raise their heads and look to the future with a level of optimism. So how should a business plan the journey ahead?

Starting with the end in mind and using a storyboard provides a framework for companies to make informed decisions throughout the change journey.

An effective method across all sectors is the Business Change Storyboard. The storyboard captures the information needed to chart a way ahead. It describes each change component and explains how they relate to each other.

This approach enables organisations to make informed decisions prior to and during the change journey. The desired outcome will require multiple initiatives. These are stated on the one storyboard and the relationship between them captured along with the relative impact of each quantified. Undertaking this level of analysis helps explain the relationship between a desired outcome and the initiatives needed to deliver it. The relative impact of each initiative is easily measured, providing answers to the following questions:

• What problems are we solving?
• How do we plan to solve them?
• What is the likely outcome if a problem isn’t solved?
• When in the change journey can we realise benefits?
• Is it possible to use these benefits to fund further initiatives?

When using this approach, all aspects of the business should be considered, such as organisation, governance, processes, and technology, as solving most business problems involves a mix of these components.

The 6 change components

It is important that a logical approach is used when completing the storyboard; ie, the change initiatives are directly linked to solving identified issues and the quantitative benefits are the result of resolving the associated impact. The following aspects contribute to delivering the desired future state:

1. Setting the vision: What should your business, function, or process look and feel like in the future? Briefly describe the desired state in 18–24 months. Think about what you would like to be able to do differently, eg, new markets, simplified delivery model, or be faster to market. The key is to imagine you are sitting at your desk at some point in the future and to describe how you would like it to be, without constraints.
2. Not there today: Define why your business, function, or process is not operating in line with the future vision today. List each specific reason why the desired state does not exist today, along with the impact on current operations or results. This could be a long list, so try to be specific.
3. What needs to change? Identify specific change initiatives that would help mitigate one or more of the reasons stated above, eg, change governance and control, move or consolidate process activities, resolve data quality issues, or automate parts of the process.
4. How will change be enabled? Specify the key enablers of the initiatives described above. Examples could be to reorganise parts of the process/functions, introduce or update a system, move locations, or outsource tasks. It is useful at this stage to identify which initiatives and outcomes will be affected if a change enabler is not implemented.
5. What benefits will be realised? Quantify the outcomes directly related to the initiatives, such as increased sales, cash flow improvement, or lower capital holding requirements.
6. Measure progress: It is important that progress is assessed by quantitative outcomes as it provides a focus on delivering the outcomes and the information needed to take corrective action if required.

Conclusion

This is a facilitated methodology for problem-solving. It helps an organisation deliver its future vision through implementing a set of defined initiatives and outcomes. It can be employed at any level in an organisation. When directed at the corporate level, change initiatives can be cascaded to divisions, from divisions to functions, from functions to processes, and from processes to roles and responsibilities.

It provides a simple but effective approach to capture and assemble the information organisations need to make informed decisions prior to and during the business change journey.

Adapted from “Business transformation: capturing 6 components to make informed decisions”, by Mark Gault, in Financial Management Magazine, 28 May 2021