At C-Level #13: Pre-Transformation Analyses

Mike Sayre is a highly experienced and successful software, e-commerce, and manufacturing services CEO, COO, CFO, and Board Director. He is an Executive Leadership Development Coach at the Innovative Leadership Institute, a trusted partner inspiring and enabling perpetual innovation, evolution, and growth in leaders and their businesses. Mike was featured in Maureen Metcalf’s May 2017 Innovative Leaders Driving Thriving Organizations interview on VoiceAmerica entitled “7 Characteristics of Leadership 2020 In Practice: A CEO Story.”

In At C-Level #10-18, I write about three of the most successful transformations I’ve had the opportunity to lead in my career so far, following a seven-step transformation model like the Metcalf & Associates Innovative Leadership Transformation Model below.

Analyze Situation & Strengths

To plan your transformation journey, you really need to know where the organization is at the start. In planning a family trip from Atlanta to San Francisco, isn’t it important to know how much time you have for the trip, what your vacation budget is, if you can afford to go by plane, train, or automobile, and if all your family members can withstand the rigors of the transportation you choose?

I’ve always found that great SWOT analyses (Strengths, Weaknesses, Opportunities, and Threats), if done thoroughly, candidly, and by a knowledgeable team, are a good place to start to understand where your organization is today. Further, SWOTs of individuals in your organization (including yourself), competitors, and just about any other entity that could have a significant impact on your business round out that understanding even more. I’ve performed SWOTs on each of these entities at one time or another in transformation processes for the following reasons:

• to help in idea generation and decision-making;
• as a baseline to understand where the transformation is starting and what the priorities are coming out of the gate;
• to help decide if the right people are in the right seats on the bus for our journey, and
• for developing competitive strategies, both short and long term.

What is your vision? What are your company’s strengths and weaknesses? What opportunities could be most impactful for your organization? What are the threats?

Here is how we analyzed our situation and strengths in the three transformations I outlined in At C-Level #10:

• Large Manufacturing Company. Leading a transformation to upgrade basic financial reporting controllers into true financial business partners began with a lot of analysis during my discussions with the plant controllers, general managers, and corporate people as well. The vision was a result of those informal interviews, discussions, research and analyses.

Early members of the transformation team then did a SWOT analysis on the company’s controllership function to help put the interview results into more of a framework and to help justify the project. Improving the skills and utilization of our controllers to reach our vision included the need to expand their training and upgrade their tools with a new integrated financial system. To properly evaluate software platforms, we needed an in-depth understanding of what we were getting out of the then current systems to understand the minimum functionality we needed the new platform to be able to provide, plus what new functionality we wanted. We used a standard template from a Big 4 accounting firm to do that evaluation.

With our vision clearly in mind, we also needed to take a forward look at our need for controllers in several large new steel processing facilities planned over the next several years (investments of $100M to over $200M in size). Evaluating our current controllers and up-and-comers and the development they needed for this transformation, as well as what we should be looking for in potential new controllers, was required as well.

These analyses of situation and strengths took around nine months to complete while still performing our regular jobs.

If you lead an organization within an organization, what are your internal customers telling you about your strengths, weaknesses and opportunities? Is your vision aligned with your internal customers’ needs and the company’s best interests?

• Mid-Size Electronics Manufacturing Services Company. As a new CEO in this $75M electronics manufacturing company, leading a transformation “to be the best in the world at what we do” required evaluating literally everything we were doing, starting with a deep dive SWOT analysis on what we did as a business! Our engineering talent and capabilities were our biggest strength. Our good margin OEM electronics repair business having only one location, our recent focus on the growth of our low-to-no margin integration business, and our overall negative morale were weaknesses. The opportunities for international expansion of our OEM repair business and building high-value engineered products with higher margins were exceptional. But low-funding and our timing in the economic cycle for these kinds of changes were threats to our transformation journey.

On the other side of the equation, we also did a SWOT on our operations. Our strength was the desire for new leadership and change throughout the organization. Our weakness was our lack of structure, discipline, and processes for continuous improvement. Becoming our customers’ most trusted partner was a huge opportunity. Our biggest threat was turning all this around in a reasonable time frame before we started losing our much larger and more demanding customers.

Having this knowledge in a well-rounded framework, gave us the ability to develop new strategies and new priorities, and really get creative about how we were going to move into the future to become “the best in the world at what we do.”

Think about your vision for the organization and the transformation required to get it there. How long could it take? Will you have the needed resources and funding for this transformation? Look at your competition. Does your vision propel you ahead of the competition? What do you think they are working on?

• Global Internet Payments Company. Our mission was providing the highest value to our clients (the sellers using our payment services), growing the company’s financial value, and getting everyone working in harmony and enjoying their jobs working toward those two goals.

This team of very talented individuals who had grown up with the company from its start-up roots were now encountering growing pains and industry changes they just didn’t have the background to effectively work with. The business model that the company was founded on was becoming outdated and less profitable, and significant changes in the model were required to remain competitive and increase profitability again. In addition, the global payment industry’s rules and its application of them were also changing rapidly. The company’s whole operating environment was in a constant state of change and what used to be strengths were now becoming weaknesses.

So, we did some, but a lot of group analysis on situation and strengths up front was a challenge. We had to prioritize and improve our capacity to collaborate, innovate, and change so we could start to figure out and do what we needed to do to keep the organization moving forward on its mission. Planning for the unknown was a little unsettling at first, but also exciting at the same time!

Is your business and industry in a constant state of flux? Welcome to the future! Is your organization prepared for perpetual innovation, evolution, and growth? If not, where will you start?

Key takeaways from these transformations

You need to know where you are to plan how to get to where you are going. That’s a very logical and structured approach to transformation (current state versus future state) that has worked very well in the past and is still relevant in larger, more complex, slower evolving and/or more mature environments today. I’ve used it many times and it has worked.

However, in cases where the organization is extremely challenged, the pace of change in the operating environment is extremely rapid, resources are scarce, and time is of the essence, there may not be enough time for long protracted analyses and planning before action.

In the case of the Global Internet Payments Company above, the pace of change in technology, global e-commerce, and the payment industry was so fast that we could not pin down the current situation and strengths fast enough to go into a traditional planning process. We had an idea of where we wanted to be, but we were running out of time! In many industries, more and more, we see strong high level missions and visions, more on-going analyses of situation and strengths, and more agile planning and execution becoming the norms.

To better understand how much of the world has gotten to this point and what it will take to lead in this kind of fast-paced environment going forward, please refer to At “C-Level #9 – Evolving Leadership for an Evolving World.” And I hope you’ll keep up with the rest of the At C-Level #10 through #18 series on transformation to see how these three very different transformation journeys played out.

What is the pace of change like in your organization and its environment today? What does that mean for its ability to assess its situation and strengths, as well as its capacity for perpetual innovation, evolution, and change going forward?

In “At C-Level #14: Transformation Planning,” we’ll look at how planning for the transformations of these same three organizations was approached and what the key takeaways are that you may need to think about in preparing for your own organization’s transformative journey.

Thanks for following us! For more information or help, please visit us at www.Metcalf-Associates.com.