System Governance for Transformation Programmes
“The stellar universe is not so difficult to understand
as the real actions of other people.”
- Marcel Proust
Despite the rapid development of transformation management field theories, tools and techniques, only a handful of change efforts have in fact been successful. We therefore find it necessary to introduce a framework by which leaders can enhance a transformation programme and deliver expected results. In other words, we propose a framework that helps stakeholders understand the need to change, share key priorities, pursue change at all levels, and sustain change. Our experience proves that transformation programmes can only succeed when governance is designed in a sophisticated way.
Let us begin by clarifying the terms “system governance”, “transformation” and “transformation programme success”. Müller (2009) describes system governance as the “value system, responsibilities, processes and policies that allow projects to achieve organizational objectives and foster implementation that is in the best interests of all the stakeholders, internal and external, and the corporation itself.” (p. 78). Hiatt and Creasey (2003) define transformation as “the application of processes and tools to manage the people side of change from a current state to a new future state so that the desired results of the change (and expected return on investment) are achieved.” (p.10)
There are several approaches to defining and measuring transformation programme success. Badewi (2016) describes project success as “…the output of three interacting sub-success criteria: successful project management in delivering the project output; successful communication and understanding of stakeholders' needs; and successful realisation by the organisation of the project's benefits.” (p. 763). Further, he emphasises, “the success of a project is based on collaboration between implementing a reliable project output with an acceptable level of service level agreement after its delivery and effective use of the project output” (p.764). Therefore, successful transformation programmes deliver both short-term and long-term organizational benefits.
Almost always, however, transformation brings high complexity and enormous risk to business processes. For that reason, ‘business as usual’ governance cannot cope with that level of complexity and risk. Thus, everyday governance needs to become system governance, i.e. be transformed into a more holistic framework: 1) prescriptive 2) relational and 3) operational. System governance ultimately focuses on achieving long-term benefits for organizations, which is paramount for the transformation programme’s success. Indeed, transformation programme benefits will be realized effectively if and only if leaders organize system governance well.
There is ample evidence of system governance’s influence on transformation programmes success. In Figure 1 we show a visual representation of all connections between these two important phenomena: the system governance and the transformation programme success.
Figure 1 The system governance and the transformation programme success
Successful transformation requires an understanding of the system governance framework. Importantly, system governance helps leaders go deeper and cross organizational and functional boundaries when making changes. That enables them to create a system in which stakeholders
Understand the need to change
Participate in and support the change
Know how to change
Implement the change on a day-to-day basis
Communicate results through the governance channels
Sustain and keep the change in place
Figure 2 illustrates how to design system governance framework when leading the transformation programme. Each of the layers has its own depth in the governance matrix. The idea is to connect all the layers when designing the system governance framework.
Figure 2. The three-layers illustrative example of the transformation programme system governance framework
First, this model considers broader perspectives on developing leaders’ responses to high risk, uncertain transformation programmes. Second, it copes with the transformation programme’s complexities and risks in the most effective and efficient way. Third, the model gives leaders a powerful opportunity to minimize the gap between project outcomes customers want and project outcomes they get. However, the system governance framework is by no means a panacea or prescription for addressing all challenges.
Here we show another empirical example of system governance’s bricolage responses to transformation complexities and corresponding uncertainties. The summary in Table 1 reveals that system governance is an important concept in achieving transformation success.
Table 1 System governance’s bricolage responses to the transformation programme complexities and corresponding challenges
System governance can help leaders to steer transformation successfully. It guides them 1) to think about transformation programme interconnections 2) to find root causes of the challenges they are facing on 3) to create a new corporate culture and, absolutely essential, 4) to teach the organization to build up the new reality.
References
Badewi, A. (2016) ‘The impact of Project Management (PM) and Benefits Management (BM) practices on project success: Towards developing a project benefits governance framework’, International Journal of Project Management, 34(4): pp.761-778.
Hiatt, J., Creasey, T. (2003) ‘Change Management: The People Side of Change’, Publisher Prosci.
Müller, R. (2009) ‘Project Governance’, Grower Publishing, Aldershot, UK.
