Why Transformations Go Red

Why do transformation programmes go red?

I've been involved in transformation programmes that were months behind schedule, millions over budget and apparently still "95% complete".

The problem?

The 5% that remained was often the most difficult — and the part that determined if the transformation could be implemented at all.  The new technology supported process could go live but will fail to deliver the benefit.  Cost, quality or speed of processing will miss expectations.

There are always choices!  Do you want to spend more and go live with the full scope?  Are you willing to take some of the scope live with part and delay a portion?  Are you willing to forego a rise in quality and deliver a cost reduction.  You may have to accept the result as suboptimal compared to the original plan although there are still some wins to achieve.  But you do need a capable team who can deliver this!!

We have an example where we have been parachuted in to deliver a 3 year program after 12 months which had already spent the entire 36-month budget.  There is no way that the full scope could be delivered without spending more cash.  However, the client was able to go live with various waves on time at the service levels committed with a restricted overspend with a revised plan.  The business lights were kept on and the tills ringing with no impact on the customers.

At Aludum we roll up our sleeves and help deliver it — including programmes that need to get back towards target.

Transformation programmes rarely go red overnight.

They usually go red gradually — while the dashboard is still green.

Here are some of the warning signs I've learned to look for:

1. Everything is reported green

If every workstream is green for months, ask yourself whether the reporting is measuring reality or optimism.

And if everything is green for months how much sandbagging was in the project?  ‘Under promise and over deliver” to manage expectations leaves a significant business value off the table.

2. Milestones are being achieved, but business outcomes aren't

The project may be delivering systems, processes and training.

Are you measuring the right things?  Is the capability in place?  Have you selected the correct milestones?

3. Risks are being managed rather than resolved

A growing risk register isn't evidence of good risk management.

Someone needs to own the risk, understand the consequence and act.  Quantify the risks and mitigate them and ensure they are communicated to the team.  Some failures could lead to a contractual breach and a contract termination.

4. Dependencies aren't being owned

"The technology team is waiting for the process."  Or worse – dictating the process!

"The people workstream is waiting for the technology."

"The process is waiting for the people workstream."

When everyone is waiting for someone else, the programme is already slowing down.

5. Forecast dates keep moving

One of the clearest indicators of declining predictability is a programme that repeatedly moves its expected completion date.  We have cost, quality and speed as part of a legged stool.  When there are delays this has consequences on either cost or quality (or both).

6. Decisions are taking too long

Transformation creates hundreds of decisions.

If decisions are continually escalated, deferred or revisited, the programme loses momentum.  Yet again, delays cost the business in increased expenses for longer or an opportunity cost of having the transformation in place.

7. The programme team knows more about the problems than the Board does

This is a major warning sign.

Boards don't need every detail — but they do need an accurate view of the risks, trajectory and likely outcome.

And perhaps the biggest warning sign of all:

The programme is measuring activity rather than outcomes.

A programme can be:

✓ On budget
✓ Hitting milestones
✓ Completing testing
✓ Delivering training
✓ Closing actions

…and still fail to deliver the expected business value.

The critical question is:

"Are we becoming more confident that the business case will be delivered?"

Predictability is one of the most important measures of transformation health.

Can we accurately forecast:

• Cost
• Timing
• Benefits
• Risks
• Business performance

If we can, we can intervene early.

If we can't, we need to understand why.

A programme doesn't suddenly become red.

It becomes less predictable.

Then the warning signs appear.

Then the options for recovery reduce.

The earlier you identify the problem, the more choices you have.

At Aludum, we don't just advise on transformation.

We roll up our sleeves and help deliver it — including programmes that need to get back towards target.