While digital transformation is touted as an important journey that brings many benefits, its success rate is low, not only because of the complexity coming from legacy systems but also because of a lack of measures to prevent tensions between the teams involved.
In a 2018 survey by McKinsey & Company, only 16% of respondents said that digital transformations improved performance and prepared their organisations for the long term, said operational excellence thought leader Nigel Adams at the recent AICPA & CIMA Finance Transformation Asia conference in Hong Kong.
Based on his past observations of other organisations going through transformation, Adams said change teams staffed with external hires often thought organisations were frustratingly slow, bureaucratic, and nonempowering.
Run teams responsible for day-to-day operational tasks were often overwhelmed because of many challenges, among them budget cuts, change teams’ highly paid new hires who were dependent on subject-matter experts and delivered nothing, and the likelihood of bearing the brunt of job losses, he added.
“Tensions and resentment between the two teams would develop as a result — this is what I believe is a cause of transformation failure,” Adams said.
A former general manager for group services at Australia and New Zealand Banking Group (ANZ), Adams was one of the two leaders accountable for the bank’s payment transformation that had innumerable process fragments and legacy technologies.
While his counterpart focused on changing the infrastructure, Adams focused on quality management, freeing up capacity, and simplifying processes to enable collaborations between the two teams.
According to Adams, he also did the following to prevent tension from developing between the run team he led and the change team.
Take stock of existing skills. Instead of hiring many people from outside, Adams and the other transformation leader agreed to leverage existing knowledge as much as possible by upskilling staff to handle tasks such as robotics and data science.
For instance, it’s not difficult for employees who are familiar with macros to transition to become robotics analysts and for people skilled in reporting and Six Sigma to upskill to become data scientists.
“It takes anywhere from a few days to 13 weeks for existing people in an organisation to learn new technical skills,” Adams said. “However, it’d take a skilled new hire two years to understand the fabrics and culture of a large and complex organisation at a granular level.”
Internal upskilling also saves companies money because it is expensive to hire people with skills in hot fields such as data science and robotics, he added.
Give employees a sense of being in charge. This was what Adams did to help run team members see the bright future that the company envisions and their place in it.
People have a sense of being in charge when they know the context, Adams said. To give the run team the context, he helped it understand where payment transformation fitted into the bank’s purpose, strategies, core initiatives, and priorities.
“People need to know why they come to work every day,” he said. “Instead of just working for the paycheque, people need to have a greater sense of being and be part of a team.”
Address the people basics. Part of what Adams calls “people basics” is performance management. According to him, leaders need to have the right scorecards and key performance indicators for employees and make sure people understand their targets and that they are achievable.
In addition, things such as role titles and pay grades have to be consistent and fair, he noted.
When it comes to transformation, getting people basics right also means being thoughtful about how you deal with existing employees and new hires. “If you send a run team person to work in the change team and the change team hires a new person to do the same job and is paid twice as much, you sow the seeds of resentment,” Adams said.
When it came to binding the run team and the change team together, Adams said he did the following:
- Coach to improve communications. “Operation people tend to be quite direct when they communicate. There were times when the right messages were delivered in wrong ways,” he said. “One of my responsibilities was to get them to learn how to communicate more effectively.”
- Create opportunities for mutual understanding. The run team went to showcases and got to know how the change team delivered, while the change team was sent to the run team’s workspace to understand the problems facing it on a day-to-day basis, Adams said.
Adams advised people to focus on the impact on customers when making their points.
“You say no because it’s a wrong thing to do to customers. You don’t say no because it makes my life miserable,” he noted, adding that he trained employees to ask questions; use facts, data, and positive language; and adopt a can-do attitude.
In addition, he arranged subject-matter experts to work across the two teams. “This helps integrate the two teams, which were more likely to feel they were acting like one,” he noted.
While the transformation journey went on after Adams left ANZ in 2018, he shared that some of the benefits achieved when he was still with the bank included double-digit productivity gains and enhanced monitoring capability that allowed staff to gain critical insights into the minute-by-minute customer flows within the bank’s global payments environment.
A difficult must-do
Looking back, Adams acknowledged that bringing the two teams together was not an easy task but that it was a must-do to give the transformation the greatest chance of success.
“If we hadn’t worked hard to collaborate and bring the run and change teams together, we would not only have run the risk of greater tension but also the real risk of poor-quality delivery,” he said. “We would also have lost far more subject-matter experts if we hadn’t provided them the opportunity to transition across to the change team.”
— Teresa Leung is a freelance writer based in Hong Kong. To comment on this article or to suggest an idea for another article, contact Alexis See Tho, an FM magazine associate editor, at Alexis.SeeTho@aicpa-cima.com.