July 12, 2021
Taking Transformation to Operations
Part 2 – The Messy Middle
The first part of this paper covered foundational work done as the organization begins a Transformation Program. The executives (and strategy consultants) have laid out an ambitious vision and business case. The project team has united to rally with much confidence and aspiration. Now the work really begins. Let’s call this phase the “Messy Middle.”
The Transformation project will have to complete a blueprint or gap analysis on impacted processes. This step needs to ensure future processes can allow for some flexibility to accommodate the business or differing customer or supplier segments. Fortunately, this type of configurable data or process is often available in modern technology solutions. Blueprinting is especially important for a process that is transitioning from one group to another group i.e., centralized or outsourced. Operations can take the time to standardize these processes later. Standardizing the work prior to moving it will often use up Operations time and energy with spotty results. If your company is implementing new technology, the future process solution may only fit 80% of the business. In this case, be sure to control requests for enhancements and change tightly. Think about these requests not as changes to the transformed process but exceptions to the standard for a certain minority part of the business. Non-standard changes and exceptions not only complicate and slow development but start to chip away at the Transformation. Change without removing exceptions is not Transformation. On the other hand, do not underestimate the value of the legacy system to the business in terms of functionality, efficiency, and profitability. There may be some “secret sauce” in the complexity of the current systems and processes. We found this repeatedly on large scale technology changes. One example was when we moved AP processing to a new, modern digital platform. We tried to replicate the matching and variance logic built into the legacy system with initially poor results because the variations were not apparent until we tried to operationalize the new process. It took dozens of change orders to fix the new, simpler system as well as more standardization in the processes and data. This “secret sauce” will likely appear in value-add systems like pricing, procurement, and distribution.
The Transformation Program requires a robust Change Management effort that includes communications, training, feedback, etc. The Change program needs alignment with the Guiding Principles and Strategy. Make sure the operations leaders are actively involved in the timing, approach, and content of change touch points. Be sure to stress the value of new capabilities beyond mere change. Highlight consistency, speed, control, single point of contact, reduction of low-level work, etc. Explain improved data analytics and process scalability to support the business operations. Highlight opportunities to improve results, customer/supplier experience, and reduce cost to fund growth. You will need to answer the “what’s in it for me” questions. Be sure there is a reasonable storyline for the impacted employees. This paper will not get into reductions or reskilling but how the company handles this with transparency, timing, and compassion reveals the true company culture. This part of the Transformation is where that trusted leader can really become an effective mouthpiece to Operations.
Candidly consider whether Operations has a culture of continuous improvement. If not, quickly begin building that attitude. It is highly effective to use a core group of diverse experts in Lean/Six Sigma, root cause, digital, data analytics, and change to drive an improvement culture. Train all associates in basic continuous improvement, change management, and process concepts and tools. In one operation, we taught hundreds of associates four basic improvement methods – process mapping, key metrics, active/visual coaching, and continuous improvement. In another company, we created a simple, competitive game with cross-functional teams to drive specific process metrics. These culture change efforts need to be tied to recognition, visual engagement, and incentives. This type of grass roots approach to improvement will raise all processes and build an organization that is primed for Transformation.
Once deployment or transition begins, the Messy Middle phase gets hard, real, and messy. Ensure Operations has a voice in determining the pilot group of business for early deployments. Transition that group through phased deployments to the end-state solution. Provide opportunities to get frequent feedback and probe deeply into the impact on the business. You will really have to push the impacted areas to get the right information. Many impacted people will simply disengage which means later deployments will suffer. Keep customers, suppliers, vendors, and employees top of mind. Always question the impact to these stakeholders. Avoid consistent escalations for problem solving. Often problems that existed before now become Transformation problems. Technology releases must be on track. Moving the process, the work, or the organization ahead of supporting technology will foster confusion, slow deployment, and reduce benefits. Many businesses have moved to “Agile Development” that generates minimal viable products via phased deployments. This may work in some instances but when an entire process is being transformed there will need to be workarounds for what is left out of the MVP. An example could be that the project delivers a new digital customer portal for several processes, but payments still get entered in a legacy screen. The solution is clunky and incomplete. Ensure the pilot deployment is stabilized and operating the new process to standard before moving onto full deployment. This stabilization phase is critical to avoiding wide-scale problems. Have a mindset that success in the initial deployment will build interest and confidence in the new end state. With a stable system, the team can focus on change management and dealing with the new exceptions for future transitions. Rushing through this phase may maximize the business case but detracts from long-term Transformation success.
Transition support is so critical in determining the attitude of Operations. Identify and manage deployment and operational problems quickly. We called this Hypercare and typically scheduled for several weeks post Go-Live and at times Hypercare went much longer. Staff this team with both the Transformation project team and Operations. While you need to track the issues, do not get overwhelmed with feedback, make sure people are heard, and look for themes. Unresolved problems and lackluster support will send a terrible message to Operations and stakeholders.
Use this time during transition support to adjust the ongoing support model. For example, if suppliers are confused about the self-serve model for inquiries, operations might need to enhance phone/email support while working on a more robust onboarding plan. As an operations leader, you will need to take negative feedback and well-intentioned suggestions from all sides. This is a great time to recall the Guiding Principles. What things must happen? Where are we trying to take the company? In all cases, continue to stress benefits and celebrate wins. Find ways to build the morale of Transformation and Operations teams. Closely monitor the reactions of impacted stakeholders but expect negative feedback and always, literally always support your team.
This paper points out some key points for Business Operations to consider as a Transformation Program rolls out through the organization. I tried to cover what is considered the “Messy Middle.” Most Transformation Projects begin with high hopes and ambitious goals laid out by inspirational advisors based on dramatic solutions delivered via amazing technology and brilliant third-party providers. For Operations, the cynicism in this statement will ring true. Regardless, we are charged to shepherd the business through the transition and to deliver business value. Focusing on these key components of the journey will give you a fighting chance of getting through this Messy Middle.
By: Chris K. Davis | Affiliate