A CEO and a Chief Transformation Officer reflect on how to carry out a successful transformation programme. 

Depending on which reports you read, the transformation failure rate is often quoted as anywhere between 70% and  85%, depending on the measures used. Whatever the reasons for this, the roles and interplay between the CEO and Chief Transformation Officer (CTO) are critical for transformation to stand the best chance of success.

Below is a transcript and link to an excellent discussion featured on the The Interim Leader podcast  series by Odgers Interim. Recorded in October 2021 it is fascinating and full of insights from the perspectives of both a CEO and a CTO and the interplay between them. A fine example of what good looks like!

Featuring experienced Chief Transformation officer Shaun Taylor and Vanessa Slowey former CEO of Digicel Group and expertly guided by Paul Wright, they reflect on their time working together on a  transformation that delivered a significant cost transformation and operating model change and discuss:

• why digital transformation is more critical than ever for organisations
• what makes a great transformation leader
• the importance of the dynamic between the chief executive and the chief transformation officer.

 “for successful transformation critical factors include the need for clear CEO ownership and a visible partnership between the CEO and the Chief Transformation Officer” Shaun Taylor – CTO 

 

02:44 – what’s your understanding of the term digital transformation?
05:18 – what’s the key to successful transformation?
05:32 – 6 pillars to follow for successful digital transformation
08:47 – the importance of culture, communication and KPIs
10:33 – resilience, adaptability, innovation and adjacent revenue streams
12:14- what key skills and attributes to look for in a transformation leader.
12:42- the relationship between the CEO and the CTO – the ‘two in a box principle’
16:08- managing the challenges and risks of transformation
18:52 – using consultants and some pitfalls to deal with
19:32 – budgeting
20:10 – how important is digital transformation in coming months
21:00 – cyber security
22:29 – key takeaways – culture and communication, take the leap and do your transformation
23:29 – thank you

Transcript:

Paul Wright [00:00:07] This is The Interim Leader podcast brought to you by Hodges Interim, the UK’s largest provider of interim management services. I’m Paul Wright, I head at the technology practice here at Odgers Interim and it goes almost without saying that COVID 19 has caused global disruption. It’s been the rapid pivot to remote digital working and the acceleration of digital business models. It’s also driven the huge amount of change in the technology and telecoms providers that underpin the digital world across the fiber data, infrastructure and data gathering space that have all needed to respond very rapidly to the situation. What are the key lessons we’ve learned is that the organizations have agile leaders who can drive very rapidly to these digital models or accelerate the development of existing digital models have outperformed in this challenging period. As we strive to rebuild and look over the horizon beyond COVID 19, it’s becoming clearer that dynamic digital transformation management will be critical to firms becoming or maintaining their position as market leaders. Here the dynapmic between the chief executive and the Chief Transformation Officer could be the linchpin to successful delivering the creation of value for shareholders. Discussed this topic today, I’m joined by Vanessa Slowey and Sean Taylor. Vanessa has a wealth of experience in technology and telecoms across the Asia Pacific, EMEA, Latin America regions. As a non-executive director and former CEO of a telecoms quad play. To give you an idea of scale, this is a $2 billion business that operates across 31 countries. She was tasked with delivering a $250 million transformation in a very, very short timescale. We’re also joined by Sean Taylor, who’s a seasoned chief transformation officer, who’s delivered complex global transformations in multiple technology, telecoms organizations. And he was the chief transformation at the same court like working with Vanessa. Welcome to you both. It’s ironic that you’re sat in different countries and I’m sat here in the UK, and the weather outside here is is really quite stormy and very wet. Only two weeks ago we were pretty battered by storm. Alex. But you two had sort of, you know, this extra amount of change through multiple hurricanes, earthquakes and even a cholera outbreak, if I remember our comments correctly.

Vanessa Slowey [00:02:11] Yes. That’s why I pulled it down in the Pacific region and the Caribbean. It is like dodging hurricanes, but this season’s particularly busy. There’s another one forming as we speak out there. So, yes, we worked and lived in environments that were were hit by a lot of natural disasters and you had to deal with that. So crisis management was part of your day to day work.

Paul Wright [00:02:32] Before we dive in to talk about this radical digital transformation that you guys drove, perhaps we can take it just a brief step back. You know, digital transformation is a buzzword that has been used by many, but it comes with a bit of ambiguity as it means different things to different people. Can you explain to our listeners what you understand digital transformation to be?

Shaun Taylor [00:02:49] To me, it’s about actually how we we meet the demands of our customers. How do we shape a business to be a business that outperforms the customer’s expectation, outperforms our competition. We do this by re-engineering and re challenging ourselves continuously around our platforms, our systems, and challenging that status quo to become a digitally native business and to be able to make sure that we are able to be agile and lean as possible in all our customer touchpoints.

Paul Wright [00:03:19] And I say your perspective as CEO, it would be very interesting to hear as well.

Vanessa Slowey [00:03:22] You know, I think COVID ironically has fast tracked digital transformation for a lot of companies. There was McKinsey said that, you know, we’ve come five years in two short months at the start of this outbreak. I mean, COVID has totally upended everyone’s lives around the globe. There’s no one that hasn’t been hit by this. And we see e-commerce platforms and companies pivoting to make sure they have that e-commerce platforms as actually buyers behavior and consumer usage has completely changed and people now preferring to work in a home environment, live in a home environment to make decisions, the biggest purchasing decisions from the comfort of their own couch. So I’ve seen companies really pivot building e-commerce platforms in as quickly as 6 to 8 weeks. I think it’s necessary for them to continue to survive. So that transformation of what is necessary, what can we turn digital? COVID has really accelerated that process. So it’s been good for digital transformation.

Paul Wright [00:04:19] Yes, I agree. We’ve seen it’s across right across the technology and telco landscape that’s effectively still anything that’s data led or cloud that has really been able to pivot very fast.

Vanessa Slowey [00:04:30] When my 83 year old mother asks for a Zoom call. I know such transformation has happened.

Paul Wright [00:04:35] It’s it’s here. It’s here to stay, that’s for sure. Yes.

Shaun Taylor [00:04:38] I think what COVID has enabled us to do is to get comfortable with experimenting and get comfortable with failing fast and actually rebuilding. Before, we were very conservative in our approach to things because we’ve had to do things very quickly because of the COVID crisis, we’ve become more used to innovation on the fly and failing fast and actually recovering from that and improving, which is a great, great thing to come out of this.

Paul Wright [00:05:04] Yes, I agree, but. delivering transformation is hard. We know this right? There’s a very large number of projects that have failed. And, you know, embedding sustained culture changes is difficult. What’s your view of this? You know, what’s the key to successful transformation? Is there a formula for success? Is there a playbook that you bring out?

Vanessa Slowey [00:05:24] Yeah, I think there is. And before you start your transformation, you’ve got to sit down and outline those steps. A lot of transformations fail for various reasons. I mean, I probably have six pillars I would advise any company to follow. The first building, you know, to understand the transformation is painful. It is going to be painful. And warning all your stakeholders off, that is sometimes half the battle to get the culture right, to get the thought process right. But the first thing I would advise the company to do is get your vision easily comprehensible and a clear statement of the new direction the company is going in. And this must be clearly articulated as quickly as possible. At the beginning, the posts to all ticketholders from your cleaning lady to the chairman of the company. And it needs that support from all those people to ask. There’s no point in the one department pulling against you. You’ve got to go. This is where we’re going and explain why we’re going there. The second part that kind of ties very, very closely to the vision is that you must communicate frequently and regularly, consistently with all stakeholders of where you are in the process, how it’s going. Something hasn’t worked. Don’t be afraid. It hasn’t worked. Urgency in space. The third pillar, very important. Time is the enemy of transformation. At the beginning, you kind of get those quick wins. So you really have to get them. It gives the transformation momentum because it’s like a freight train coming through. We saw myself and Sean used to joke about it’s like doing open heart surgery for driving a Ferrari. The next thing, I suppose it would be the transformation team itself. Again, a critical part, but you must appoint a transformation and someone to head the transformation. In my case, John came in. He was absolutely superb. If you can find the person from within, just man from what department? Just you need somebody that does not say no, someone that pushes boundaries, and then you bring the team around them. Every department must it must be presented. The executive team must be part of the transformation team to buy in. And they in turn then must have subgroups of people working within their department or area working on transformation. The next pillar the fifth pillar is value creation. Every single person in the organization must deliver value. They must be challenged. Everyone’s got to be challenged. Oh, very interesting about our transformation was that some of the ideas came from people that we didn’t expect. We gave everybody in the organization a voice, and it’s important to have that open door policy and allow that clear that new thinking to come into the organization.

Shaun Taylor [00:07:50] And importantly. So we actually celebrated when people did actually come up with ideas that when people from a lower down of the organization, we actually promoted their idea and actually gave visibility to to to start stimulating that idea.

Vanessa Slowey [00:08:04] We celebrated them and we called them out in our communications on people that came up with phenomenal ideas. And actually some of the best ideas came from, you know, the water cooler conversations were it’s actually positive gossip of positive ideas of what people can do. And therefore everyone kind of feels that they have a say in this, that they are being listened to. They have a voice, of course. Agility, you know, being consistency of floors. Execution is absolutely important. But don’t get too excited because there is no one silver bullet in a transformation. It’s many silver bullets. The momentum you build and making sure that you execute on them, that they don’t sit there for weeks and months waiting for someone to close it off. Every action has an owner and then you must execute on that.

Paul Wright [00:08:47] Thanks, Sean. Your perspective as a CTO?

Shaun Taylor [00:08:49] Just to to to build on that, I think the first piece around culture is so key. You need to explain to people why their lives are being turned upside down. You need to personalize the messaging at all levels of the organization. You need to make people understand what the rationale for the change is, how it impacts them. The only question people are interested in is what’s in it to me? What’s changing for me? And you need to be able to articulate that very clearly and be consistent with that and take that message through the innovation and the value creation is critical. You need to be able to change the organization, pivot the organization into the new direction. You need to reinvent the operating model. You need to better redefine the performance metrics. You need to better understand the structural KPIs that move you so you can control them and actually monitor them and see you are getting value as you move through the transformation. We were doing this in a very fast paced 12 month period where we had to protect our bit. We had to protect our operating margins, make sure our network performance, increase our customer net promotor score while still also doing open heart surgery to the business. You could only do that by actually making sure that the organizational health is maintained. People are respected and you’re very careful about how you execute your operating model change.

Paul Wright [00:10:10] It’s also very interesting. You mentioned pillars two and three being the communications space and urgency and speed. I guess it goes back to the point we were saying about Agile leadership, right? What we’ve seen across the technology and telco landscape is leaders who’ve been able to craft the communications and the cadence of those communications has really rapidly increased. So has the frequency people who can lean in, responded in agile fashion and have outperformed. Some have even taken market share. There’s one business I work with who is growing 40% quarter on quarter right through COVID. So it can be done.

Vanessa Slowey [00:10:43] It can, you’re right, it’s about agility, it’s about leaning in, it’s about a different thinking. A great story recently was of Singapore Airlines. The airline industry has been completely in such a crisis over COVID. But Singapore Airlines, have thought of it quite a clever way of getting revenue in. So they’re offering people the opportunity to spend three and a $70 for a ticket to have dinner on board their Airbus A380.The plane doesn’t take off. You just come in, you can sit down and think you pay more if you want to be in a first class seat. You get to watch a movie. It’s for 3 hours. Again, just a different way of thinking of going, how do we need to get revenue even if we’re just keeping alive and floating? It’s just incredible how people start to think outside the box.

Paul Wright [00:11:23] It’s interesting. I read the report as well.

Shaun Taylor [00:11:25] Adjacent revenue streams and actually they’re really crucial. And Vanessa and I saw this as within the telco sector where you’ve got the voice revenues declining and you are having to look at cable content to the whole financial services piece, retail. You know, you have to make sure you’re exploiting all of your adjacency and actually making sure that you’re bringing forward new ideas for adjacency in order to maintain those revenue streams in a period of COVID adjacency revenue streams that are critical, you need to be able to to pivot and make sure that you’re picking up every piece of revenue you can when your main revenue sources are drying up.

Paul Wright [00:12:09] Leslie, you mentioned that building the transformation team and selecting a chief transformation officer is a critical success factor. Are there key skills and attributes you look for in a transformation team, in a transformation leader?

Vanessa Slowey [00:12:19] Absolutely. You’d find disruptors, people that generally challenge you. As human nature, we probably don’t like those people, but we need them in the transformation. You need somebody that’s going to challenge you.and question you. And the team must made of people that they’re more comfortable in that challenging role challenges of status quo that is absolutely key for a transformation.

Paul Wright [00:12:39] Sean, any advice you’d share in that respect?

Shaun Taylor [00:12:42] Yeah, I mean, it’s what I call, I think McKinsey called it is the same thing, which is the `”two in the box principle”. The transformation officer is about the transformation journey, shaping the future and executing the strategy of the chief executive. While the chief executive is on the front line is the PR face for the transformation and making sure the cultural change perspective the business is being conditioned for it, but still maintaining the run aspects of the business. And part of my job is to make sure that Vanessa’s day had 95% of capacity for operational and 5% that she needs to focus on. The transformation was short, sharp and crisp. But we know where we’re going.

Paul Wright [00:13:23] Let’s look at that dynamic. You know, they’re the two in the box principle that you talk about. In your experience, why is this symbiotic relationship between the CEO and the CTO so important?

Shaun Taylor [00:13:33] If you had the vision, So the transformation officers about delivering the vision and helping shape that vision and actually making sure that there’s continuous improvement around it and there’s. …. the ideas engine is humming, the execution of transformation is happening in the rhythm and tempos is there, the government processes are in place. The structural KPIs are being met, etc.. Whereas the chief executive roles is actually about shaping and defining what the transformation should look like, and then holding the chief information officer to account for execution and delivery while maintaining that tension within the exact group for run. So, you know, when Vanessa and I turned up for our executive meetings, you know, as a member of the ELT, I was driving very hard and pushing very hard on the transformation and Vanessa was managing that tempo between our operational reality. Sean is A, B and C, but actually, you know, we need to do D, E, and F in order to drive the transformational change and maintain operational direction.

Paul Wright [00:14:38] Vanessa, do agree?

Vanessa Slowey [00:14:39] I do. I think actually that there’s always going to be a tension with the transformation officer and the executive team. It should be that way.

Paul Wright [00:14:46] Is this the time when we need to mention your fantastic rows that you’ve had.

Vanessa Slowey [00:14:50] Yes. Yes. I think they’re a great tool. And I it’s an absolutely fabulous rows. And we had to have rows and we’re both very passionate about what we were doing. And Sean’s job was to bring ideas to the table. And sometimes I had to say, Nuke them, no ,we can’t do that because it was actually long term part of the business. You know, we have these rows and then we leave the meeting and we go, Hey, how are you allowed to have a coffee? Get us a coffee. I was like, nothing that ever happened. And I think you have to be a little bit bipolar in this stage of a transformation of going. Everything that happens in that room is for the passion of the company. So it’s good to get everyone’s views. What you don’t want is a team of people just saying yes or just staying muted because they think, well, I don’t want to upset people. You’ve got upset people in transformation. So I do, as painful as it is, I do encourage it.

Shaun Taylor [00:15:37] You have to be direct and drive change, but you need to understand that the issues the issue is the issue not to personalize it. You can you can disagree about a point, but that doesn’t mean it breaks relationship. If you disagree with the point, then you move on. So the next one, it’s about maintaining that professionalism and resisting that temptation to internalize and personalize because someone projected something as a Chief Transformation Officer I’ve become very thick skinned to people saying no and I just move on to the next challenge.

Paul Wright [00:16:08] We’ve looked at the success factors, but what are your views about, you know, the risks and pitfalls of transformation, perhaps advice and how you would avoid these?

Shaun Taylor [00:16:16] I think one of the the biggest challenges that people don’t spot failure quick enough. Projects go out of kilter. The problem is that the executive team is often too far away from them that when they the information finally flows up to them is too difficult to recover. And it’s almost a hard reset. It’s actually how you maintain that governance and oversight. I’m pretty nosey. I always put my nose into things and go and kick the tires and things very regularly. The only downside for me of the new working from home relationship is it denies me the opportunity of walking into it into a project meeting unannounced, or you’re going to stand by someone’s desk and actually having an informal conversation with them. That’s how I used to find out if there’s a problem and how I needed to go to remediate something or just help people find some better direction in better traction.

Paul Wright [00:17:04] That comment about the lack of personal contact with video. Any advice on anything that you would are doing differently? To get into the details, you need to find out and see the whites of people’s eyes, if you like.

Shaun Taylor [00:17:14] Keep asking why, if and it’s what I call active listening. So engage in conversation with people an interesting great carry on yet what next? And trying to get them to talk themselves out and hearing everything they have to say. Because if you don’t do that, they’re framing a conversation around what you want to hear. So you need to make sure that you get the complete data dump off them in and then dissect that and go through it and find out what the issues are.

Vanessa Slowey [00:17:45] I’ll just come in there. I think that today with people working from home, the communication couldn’t be more vital. This is a time for all leaders to show empathy and be authentic, calling someone to see how they are, how their family are. And from that you build a relationship again, that trust and credibility. That’s how they will learn to be able to communicate with you as well. Very, very open fashion. We’re no longer in our offices, we are. we’re all at home. So overcommunicate and do that. Be authentic.

Shaun Taylor [00:18:13] Yeah. We truly need to learn empathy. We all know that we have empathy. But when you do a self audit we all lack empathy and self-awareness. It’s really important we demonstrate both as we move forward through this crisis and actually working from home and working remotely becomes the new norm. Although for Vanessa and I, it’s not that typical because we were so used to people being in 31 different markets, so working remotely and teleconferencing and everything else is for people of lesser known is actually just an extension of what we did before.

Paul Wright [00:18:46] Just checking. A little bit to our original question. Is there anything else you put out in terms of some of these key risks and if anything else?

Vanessa Slowey [00:18:52] Yeah, the huge pitfall I’ve seen is that you take consultants on beginning. Consultants are great at starting something, but you need to close it. So you’re going to bring somebody from outside and bring them for a specific period of time with really clear deliverables. And then once you have that plan outlined, you just need to go and do it with your team, with your transformation team owners, live it breath it and those six things I mentioned. If you again, the communication, the vision, the agility, the urgency and speed, consistency of initiatives coming through, the transformation, execution of them, making sure everyone creates value and that you have that transformation team sitting on top, making sure it gets done.

Shaun Taylor [00:19:35] And just on to the next point about the consulting piece. Transformation budgets are always below the line. They come out of the executive budget, but they’re not free money. And the truth is a lot of transformation budgets get blown at the beginning. People spend a disproportionate amount of their transformation budget at the initiation stage, in the design stage, and actually have very little left over for execution. It’s quite easy to burn through what seems like a big pot of money on big ticket consulting firms.

Vanessa Slowey [00:20:05] Couldn’t agree more.

Paul Wright [00:20:06] Let’s think about the future. We mentioned this already enough, perhaps spoken about this, but how important do you think digital transformation will be in the coming months and why do you think that is?

Vanessa Slowey [00:20:15] I think you do or die in this world we find ourselves in. You need to do a digital transformation as fast as you can, you need to pivot. If you’re selling to consumers, you got to make sure you’ve got a really good e-commerce platform. Customers to cope with are becoming more loyal to brands that are authentic, that are real and that they can communicate with. So I mean, in essence, actually we see digital marketeers actually becoming central to the whole organization more important than they ever were of bringing everybody in their organization together and then communicating that brand message out through all the different channels. I think we’re a long way off seeing anything, go back to the way business was done. So I would say, do it faster, go quickly, get your team around if you want to survive.

Shaun Taylor [00:21:00] I completely concur with that. The only rap card add on to that is we’ve really got to be thinking carefully about our cyber posture. Cyber security, data loss protection. The two issues we have with being digitally native is that we expose ourselves to a greater risk of cyber attack and also the fact that we we don’t know what our people are doing with our data remotely. So we’ve got to be very careful around data loss protection and cybersecurity and improve those in parallel with our going digital native. And then on top of that, we’ve going to have to do that in a backdrop of working capital calls, cost reduction calls, operating change. So, you know, the real the real challenge of 2021 is actually going to be how we do digital, how we tie down cyber and data loss protection in the backdrop of conserving cash, reducing our operating footprint, trying to work out actually how we improve free cash flow. 2021 will be a very challenging landscape.

Paul Wright [00:22:02] I have to agree. I read a report in the information Age and they’re was saying that 70% of companies in the UK were at least maintaining or increasing their digital transformation budgets. The only surprises about that for me was that it was only 7%. But if I’m honest, it’s just just thinking as as we we come to an end. I mean, two or three key things that you’d add or you’d highlight as key takeaways for our audience that they should take away as they go into this new digitally native world.

Shaun Taylor [00:22:29] For me, it’s it’s culture and communication. Transformations fail when the culture turns against them. So you need to make sure that you’re changing the culture of your organization as you’re executing the transformation. And you do that by understanding your organizational health. As we move towards pure digital, we need to make sure our cyber protections are robust and do not present these issues. This week there was a local council again that got hit by a significant attack. And then I think we’ve also got to look at actually how we adjust our operating model and be very careful with our people because our footprint is going to change in 2021.

Vanessa Slowey [00:23:10] My comments would be. I think if you haven’t taken that giant step, you’re going to need to take that giant step and do a transformation to stay alive and stay relevant. But the result will be a rebirth of your organization with the ability to evolve and prosper and weather this turbulent storm that we’re going through.

Paul Wright [00:23:29] Thank you very much to you both, Vanessa and Sean, for taking the time to speak with me today about your experiences sharing your insights on how to drive digital transformation successfully. Thank you for listening to this episode of The Interim Leader. If you have enjoyed the podcast, please like subscribe and follow for more insights from a network of consultants, clients and interim managers.

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