At C-Level #14: Transformation Planning

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.


Plan Journey


Now that you have your vision, situation, strengths, team, and resources for this journey, it’s time to do some planning!


Any real transformation is going to take a significant amount of time – at least a year or more.


Your first plan will likely get you off in the right direction. However, the further in the journey you get, the more likely you will have to deviate from it, especially if it is a very detailed plan. I mention this so that you will not:


  • over-plan at the expense of getting started, or
  • stress out when the plan must change, which it undoubtedly will.


Most consultants I’ve used start with a high-level current/future state model. Then, they break that down into functional current/future state models to distribute planning, execution, responsibility, and accountability across the team.


It’s also the time to plan how functional initiatives and overall transformation progress will be measured and reported. Each functional initiative must have its own metrics and goals that will contribute toward the achievement of the transformation goals. All metrics and goals must be well-thought out and clearly represent the transformation’s positive impact on the organization.

What does your organization look like today? What will it look like years from now? What metric(s) would indicate the progress of the entire organization toward its vision?

Here is how we approached planning in the three transformations I outlined in At C-Level #10:


  • Large Manufacturing Company. After our transformation to upgrade basic financial reporting controllers into true financial business partners in a large and growing company (our vision), we believed the future state would include:
    • an updated accounting and financial reporting system freeing up controller time for additional analysis of the periodic financials, trends, forecast comparisons, capital investment justification and progress reporting, financial consulting within the business, and people development;
    • controllers with the skills to use new systems and perform the analysis and business partnering functions as we envisioned them;
    • a pipeline of controllers for new plants and businesses with these skills; and
    • bottom-line results to show for it all.


The current state included:

  • a main-frame computer-generated trial balance manually input into spreadsheets for financials with a lot of detailed information and limited analysis;
  • some controllers with the skills to perform financial analysis and some with the business knowledge to also be a financial business partner, but few with skills in newer automated accounting and financial reporting systems;
  • some accountants/assistant controllers capable of being controllers with little to no development provided to get them there; and
  • a bottom-line that could be improved by this transformation to the future state.

The project team was formalized and began reconciling what had to be done to move from the current to the future state on automating the systems. Simultaneously, as the lead controller in the largest business group, I began working with the general managers and the rest of the controllers on controller development programs.


Later I realized that only planning out milestones for the completion of our initiatives in the transformation and not having any metrics or goals for the overall transformation created longer term challenges with sustainability. You’ll see how that played out in future “At C-Level” blogs.


If you have a transformation you are contemplating, how will you measure and report progress and success in the initiatives for the transformation and for the achievement of the vision?


  • Mid-Size Electronics Manufacturing Services Company. As you can imagine, leading a transformation “to be the best in the world at what we do” left a lot of room for interpretation, but so did our future state:
    • a perpetual earnings per share growth engine for our shareholders;
    • a work environment our associates embrace each day with opportunities to grow in their careers;
    • the status of “Most Valued Partner” to our customers;
    • providing opportunities for our suppliers to grow and prosper with us; and
    • giving back to the communities in which we live.


The current state:

  • fast growing sales, yet little to no improvement in profitability;
  • high-potential employees in a work environment that was difficult to embrace with little apparent opportunity;
  • customers upset with quality and delivery;
  • suppliers growing and prospering while we were not; and
  • only occasionally giving back to the community.


We were not serving four of our five stakeholders very well. Several company-wide strategic areas quickly needed to be addressed, with the highest priorities given to initiatives that would have the greatest positive impact to current customers, whose purchases were required to fund our transformation to the future state.


Given that, our top priorities were customer service improvement, employee engagement, and profitability. Focusing on those would better serve our suppliers and communities as well.


We decided that a lean manufacturing implementation would quickly start to improve customer service, engage our people in what they viewed as a worthwhile effort, and result in service improvements and cost savings for current customers that also could improve our profitability—while we figured out what to do about our top line value and margin challenges. Lean requires the identification of key metrics, the ongoing monitoring and reporting of those metrics, and rigorous continuous improvement processes focused on metric improvement.


Our overarching metric was growing profitability. We already had a quarterly gain-sharing plan for all associates and it became a great measurement of our progress and how we were all working together as a team.


What are the priority areas in the transformation you are contemplating? Have you considered how you will fund your transformation? How would you measure the overall success in your transformation with a metric that the whole organization could relate to personally?


  • Global Internet Payments Company. The desired future state:
    • helping our sellers sell more (measurably);
    • providing a collaborative and fun work environment with great career opportunities for our best associates;
    • facilitating cross-border transactions and e-commerce globally, and creating more jobs;
    • providing software as a service (SaaS) and back-end payments processing to simplify the entire process for our sellers, while adhering to the underwriting requirements of the industry and governments;
    • building a platform company that could acquire other processors and their seller customer bases; and
    • building value for an eventual financial exit for the owner.


The then current state:

  • A $200M transaction volume processor still trying to run in start-up mode, highly siloed, not collaborative, lacking in product development, with flat top-line and declining bottom-line performance.


With our SaaS model and software development driving so much of our desired future state— and that development stifled by the functional siloes in the organization—we decided to implement an Agile product development environment that required constant communication, collaboration, and coordination across all functional areas of the company. Like Lean, Agile puts your organization into a more structured continuous improvement/development environment, and its implementation requires a level of rigor that becomes a new way of life within the organization.


We had many detailed metrics as you might imagine for a SaaS payments company, but we also implemented a profit-sharing program—both a measurement and reward system for how we were coming out of silo-mode and performing as one team.


Lean and Agile concepts have much broader applicability than just in manufacturing and software development, as well as across different industries, with similar benefits. Have you ever considered either program? What about profit-sharing as an overall metric of success to increase cross-functional collaboration?


Key takeaways from these transformations


Planning for transformations can be highly dependent on organization size, maturity, current state, desired future state, and available funding.


There was much more up-front planning in the $2B global Large Manufacturing Company and it was a well-defined functional transformation. The company also had significant resources to contribute to its transformation project.


The other two transformations were in comparatively smaller companies, requiring major strategic, cultural, and operational change across the company. Their businesses were technology-based and their business environments were quickly changing. The people transforming these companies had to do it while concurrently accomplishing their ongoing business objectives. We had to figure out how to reallocate resources and squeeze more profit out of both companies to finance our transformation efforts. In both cases, sharing those profits was a nice perk, but it was also a great measurement of team progress and a source of team pride.


The increasing pace of change in our world will likely require these kinds of ingrained continuous improvement processes in most organizations to simply survive, let alone thrive. Think perpetual innovation, evolution, and change going forward!


In “At C-Level #15: Transformation Communications,” we’ll look at the communications frameworks in these three organizations and what you may need to think about in preparing for your own organization’s transformative journey.


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