At 8.00am, ANZ Banking Group created a digital transformation executive role. At 8.45am, BHP announced the appointment of its own “chief transformation officer”.
They are not alone. LinkedIn shows there are now 124 chief transformation officers in Australia. They can be found across government departments and private enterprise, and their growth reflects a trend that is also being seen in other markets internationally.
The appointment of chief transformation officers at high-profile Australian companies is significant for several reasons.
First and foremost, it demonstrates that transformation is its own skill and domain of expertise.
Transformations are complex and a discipline in their own right. One mistake we consistently see in under-performing transformations is where executives don’t appreciate that someone who is good at day-to-day business operations might not necessarily be as adept at managing a transformation program. There is still a view that these skills are interchangeable. The reality is they are not.
It’s rare that an executive is going to be able to look to someone internally – potentially more junior than them – who really only has business-as-usual (BAU) experience, and expect them to pull off a successful transformation.
Therefore, the ideal person to a run a transformation is someone that has experienced both sides: the business-as-usual operations, as well as having past transformation experience. If the latter is a stumbling block, the skills of a BAU-focused transformation leader can be augmented with targeted advice from a transformation specialist like Certus3.
Second, the arrival of the chief transformation officer is further proof transformation needs a seat at the executive table.
The most successful transformation programs are driven from the top down. This isn’t just about executive sponsorship, though having a strong sponsor clearly helps. For example, ANZ’s chief executive Shayne Elliott has consistently pressed the case for bank-wide adoption of ‘Scaled Agile’ under the institution’s ‘New Ways of Working’ transformation. Yet, the bank still feels a need to have a separate transformation executive.
This is because while executive sponsorship provides a mandate for change, the execution and day-to-day work associated with transformation delivery is best left to someone with a particular set of skills.
As McKinsey notes, “chief transformation officers should be independent (certainly not associated with the decisions of the past), have experience of similar turbulent corporate environments in their earlier careers, and enjoy support from the board, the CEO, and top management. They should be fully integrated into the executive team (not sidelined to a separate transformation unit). Ideally, they should behave like an extension of the CEO or even the board and as such be able to hold the top managers accountable.”
Third, executive representation, when combined with the support of risk professionals and specific tools, can help reduce uncertainty and ensure risks inherent in digital transformation programs are properly understood and managed.
By their very nature, digital transformation programs deliver changes to processes, technology and culture. This can have a significant impact on the business risk profile of an organisation.
Risks that aren’t adequately managed and resolved during program execution will often manifest in operational uncertainty after the program has gone live.
Those risks can be as simple as keeping everyone in the organisation informed and focused on the end goal. A recent survey found that while 67 percent of managers were aware of their digital transformation efforts, that awareness level dropped to just 27 percent of non-managers – evidence that there is a need to better engage staff.
A well-supported transformation executive is likely to be best-placed to run that engagement and to create processes and ways of presenting information to the business in a way that keeps the program on track.
Dashboards are often a great way of keeping everyone informed about a digital transformation program. A dashboard can provide an overall portfolio-wide view of risk and uncertainty across a transformation in real time. It also ensures that important information actually reaches the people who need to see it.
We’ve also found that regular independent assurance using risk-centric predictive analytics like AI Assurance is an effective way of ensuring that risks in a transformation program are progressively managed, and that uncertainty is reduced and understood by the executive committee.
Successful transformation is about getting programs on track and keeping them there. The elevation of transformation from an executive concern to an executive position is likely to ensure the success rate of transformations in Australia increases.
Michael Devlin, managing partner at Certus3
Eliot Hastie is a journalist on the wealth titles at Momentum Media.
Eliot joined the team in 2018 having previously written on Real Estate Business with Momentum Media as well.
Eliot graduated from the University of Westminster, UK with a Bachelor of Arts (Journalism).