Your Transformation has gone red. Now what?

Your Transformation Has Gone Red. Now What?

We previously looked at the warning signs that a transformation programme is heading towards red.

But what do you do when it has already happened?

The natural reaction is often to throw more people at the programme, work longer hours and try to recover the original plan.

That doesn't always work.

The first step is to accept reality.

A proper assessment is required to establish what has happened, why it has happened and, critically, what the consequences are for the business.

Because when a major transformation programme goes off track, the impact rarely sits within the programme itself.

It can affect the CEO, Chair, Board, investors, employees, customers and other stakeholders — and ultimately the enterprise value of the business.

The consequences extend far beyond the programme

Transformation plans are usually communicated widely across an organisation.

People may have been told that their roles will change. Some employees may have time-bound redeployment plans, while others may have fixed dates for leaving the business.

When a programme is delayed, those decisions can suddenly create significant consequences.

Critical employees may need to be retained for longer than planned, potentially requiring unbudgeted retention payments.

Employees recruited and trained for the new operating model may be unable to start their planned roles.

The business may incur additional parallel-running costs.

Other projects or operational workloads may be delayed because employees expected to move into the new model remain in their existing roles.

And management capacity can become stretched as teams attempt to operate both the existing and future models.

There is also a significant people and engagement impact.

Employees will often have been told why the transformation is necessary and what the benefits will be for the organisation. When the programme subsequently stalls, confidence can fall.

People begin to question the strategy.

They may also question the leadership's ability to deliver it.

For businesses pursuing an inorganic growth strategy, the consequences can be even greater.

A delayed transformation can delay an acquisition integration programme, affecting the realisation of expected synergies and creating additional cost. It can also unsettle management teams with earn-out arrangements and employees within acquired businesses.

Most importantly, it can affect the ability of the combined organisation to deliver the service levels and commitments it has made to its customers.

A transformation programme going red is therefore not simply a project problem. It can become a business problem.

The best time to intervene

There is a well-known proverb:

“The best time to plant a tree was 20 years ago. The second-best time is today.”

The same principle applies to transformation.

Ideally, a strong intervention would have happened earlier.

But if the programme is already off track, looking backwards will not fix it.

We are where we are. The priority now is to take positive action.

The first questions should be straightforward:

What has actually been delivered?

What has been spent?

What remains?

What benefits are still achievable?

And, critically:

How do we make sure we don't get this wrong again?

McKinsey's research reinforces why this matters. Its research found that less than one-third of respondents said their transformations had both improved organisational performance and sustained those improvements over time. Even among those reporting successful transformations, respondents estimated that they had captured only 67% of the maximum potential financial benefits.

The challenge is therefore not simply completing a transformation.

It is capturing the value that justified it in the first place.

Five priorities for transformation recovery

1. Re-establish the facts

Forget the historic RAG status.

Establish the true position.

What is the actual position on:

• Cost

• Timing

• Scope

• Risks

• Dependencies

• Resources

• Benefits

• Business readiness

A programme reported as “95% complete” may in reality be considerably further from completion if the remaining 5% contains the most complex or critical components.

The objective is to create a single version of the truth.

Only then can sensible decisions be made.

2. Protect the business

Transformation cannot be allowed to damage the underlying business.

Customers still need to be served.

Revenue still needs to be generated.

Employees still need to be supported.

Operational performance still matters.

Keep the lights on while changing the wiring.

Or, more simply:

Keep the lights on and the tills ringing.

This also means communicating properly with employees. People need to understand what has changed, what it means for them and what the organisation is doing to recover the programme.

A recent example demonstrates the consequences of getting this wrong.

In July 2024, medical technology company Zimmer Biomet went live with an SAP S/4HANA implementation. According to the company's subsequent lawsuit against Deloitte, the implementation caused severe disruption to operations and supply chain activities, including difficulties shipping products, issuing invoices and producing sales reports. Zimmer Biomet is seeking at least $172 million in damages. Deloitte disputes the allegations and has said it will defend the claim.

The lesson is important:

Go-live is a programme milestone. It is not a business outcome.

A transformation isn't successful because the system has been switched on. It is successful when the business can continue to serve its customers and realise the benefits that justified the investment.

3. Re-prioritise

When a programme is in difficulty, trying to deliver the entire original scope can make the situation worse.

The business needs to make explicit choices.

What must happen?

What can be deferred?

What should be stopped?

What can be delivered differently?

There are always trade-offs between cost, quality and speed.

The objective is not necessarily to deliver everything that was originally promised.

The objective is to deliver the maximum sustainable business value from the investment that remains.

Surrey County Council provides a useful public example.

Its ERP replacement programme was originally planned to take 15 months. It ultimately went live 18 months later than planned, with the final cost reaching £27.9 million against an initial £16.6 million budget. A subsequent council review identified underestimated complexity and an unrealistic original timetable as significant factors, with problems continuing after implementation, particularly around payroll.

The lesson isn't that ERP transformations are inherently risky.

It is that an unrealistic plan becomes increasingly expensive the longer an organisation continues to defend it.

At some point, leadership has to stop asking:

“How do we rescue the original plan?”

and instead ask:

“What is the most valuable outcome we can realistically deliver from here?”

4. Create clear accountability

Transformation recovery requires clear ownership.

Every critical deliverable needs an owner.

Every major risk needs an owner.

Every dependency needs an owner.

Every important decision needs an owner.

And someone needs overall accountability for the revised plan.

This is particularly important when a programme spans multiple functions or business units. Transformation cannot be successfully recovered through a collection of workstreams operating independently.

Someone has to own the outcome.

Publicly reported transformation experience also shows the value of establishing a dedicated Transformation Office with clear governance and benefit ownership.

One global asset manager engaged external support to establish a Transformation Office around a major cost-reduction programme targeting £180 million of savings. The programme reported £60 million of sustainable savings by 2024, alongside governance, benefits tracking and capability transfer into the organisation.

The important point is not the particular number.

It is the operating model:

clear accountability, central coordination, active benefit management and experienced people working alongside the business to deliver change.

5. Restore predictability

The objective isn't simply to turn the dashboard from red to green.

It is to create a plan that the Board, management team, investors and programme team can believe in.

A realistic plan that is successfully delivered is far more valuable than an unrealistic plan that remains permanently “95% complete”.

There is also a direct connection to enterprise value.

Transformation plans and results are communicated to Boards and investors. They can also become visible during future transactions and due diligence.

A programme that repeatedly misses its commitments, requires additional funding or fails to deliver its anticipated benefits can therefore have consequences well beyond the programme itself.

Predictability is value.

Recovery does not mean rescuing the original plan

I have been asked to intervene in programmes where the original plan was no longer achievable.

The answer wasn't to pretend otherwise.

We re-planned the programme, prioritised the critical outcomes and changed the delivery approach.

In one example, a three-year programme had already consumed its entire three-year budget after only 12 months.

The original scope could not be delivered without significant additional investment.

Rather than continuing to pursue an unrealistic plan, the programme was restructured and delivered in waves.

The business maintained its committed service levels, protected its customers and achieved the critical business outcomes — with a controlled overspend.

Programme recovery isn't about rescuing the original plan.

It's about maximising the value that can still be delivered.

And the earlier you intervene, the more choices you have.

AI can create the plan. Someone still has to deliver it.

AI can dramatically accelerate the creation of a transformation plan.

It can build complex models, analyse large amounts of information and identify examples of cost reduction, process redesign, technology adoption and organisational change.

That capability is valuable.

But AI does not remove the need for experienced transformation leadership.

The risk arises when organisations confuse the ability to generate a sophisticated plan with the ability to execute it.

A transformation involving multiple functions, technology platforms, organisational change and significant financial commitments cannot simply be learned through experimentation while the business is carrying the risk.

A model can identify that a business could reduce its cost base by changing its organisational structure.

It cannot take responsibility for the people affected.

It can identify a process that could be redesigned.

It cannot manage the resistance created by changing it.

It can recommend new technology.

It cannot lead the organisation through implementation.

It can calculate the potential value.

It cannot deliver the value.

The cost of experience is visible. The cost of inexperience often isn't until it is too late.

Buy the capability or build it?

Every organisation facing a major transformation has a choice.

It can build the capability internally.

Or it can bring in experienced external capability.

Building internally can be the right answer, particularly where transformation capability is expected to become a permanent organisational competence.

But there is a learning curve.

And during a major transformation, that learning curve can directly affect cost, quality and speed.

For complex transformations — particularly those involving multiple business areas, acquisitions, major technology changes or significant organisational restructuring — the cost of getting execution wrong can be substantial.

There is the direct financial cost.

There is the opportunity cost.

There is the impact on customers.

There is the impact on employees.

And there can ultimately be an impact on enterprise value.

For these situations, buying proven experience and capability can be a powerful way of reducing execution risk and accelerating value realisation.

This is where Aludum helps

At Aludum, we provide hands-on transformation capability to businesses that need additional senior leadership and execution capacity.

That includes transformations that are progressing according to plan — and programmes that have gone off piste and need to get back towards target.

Our role is not simply to produce another report or value-creation plan.

We work alongside management teams to turn the plan into reality.

For complex, multi-dimensional transformations, experienced hands-on executive support can make the difference between identifying the opportunity and actually realising it.

The value of transformation is not created when the plan is written.

It is created when the change is successfully delivered.

The ultimate objective

Sometimes the most valuable transformation isn't the one that follows the original plan.

It is the one that successfully delivers the outcome.

If your transformation programme has gone red, the question is not:

“How do we get the RAG status back to green?”

The better question is:

“What is the maximum value we can still deliver — and what do we need to do to deliver it?”

That is where transformation recovery begins.

At Aludum, we roll up our sleeves and help deliver it.