Thriving amidst transformation: Creating implementation that works

In today's dynamic business environment, companies face the perennial challenge of balancing stable operations with pursuing transformative change. As highlighted in our previous exploration of rightsizing during uncertain times, this balancing act is crucial for organisational resilience and growth. But how can businesses achieve this equilibrium effectively, especially within Finance functions under intense pressure to adapt rapidly? Think like an airport: you need a control tower. The answer lies in structured execution led by a dedicated Finance Transformation Office (FTO) – the central hub that provides line of sight, coordinates traffic, and keeps transformation on course while operations continue to run safely. 

The dual challenge: Balancing operations with transformation 

Finance functions today are at a crossroads, required not only to manage day-to-day operations efficiently but also to drive strategic transformation. The reactive, scorekeeping role is evolving into a proactive, strategic partner demanding end-to-end excellence and innovative solutions. Yet, the journey from operational efficiency to transformational leadership is fraught with challenges: 

1. Operational inefficiencies: Existing processes can inhibit responsiveness and agility, locking teams into outdated methods. 
2. Talent management: Developing strategic capabilities takes time, commitment, and foresight. 
3. Resistance to change: Cultural inertia can impede transformation efforts. Only 21% of employees are engaged at work, highlighting the struggle to garner support for change initiatives. 
4. Risk and uncertainty: Transformation introduces unknown risks, which must be meticulously managed to avoid unsettling organisational foundations. Initiatives with strong governance mechanisms are 63% more likely to achieve their transformation goals. 
5. Time and cost overruns: Despite intentions, only 22% of transformations are successful, indicating a 78% failure rate similar to the 70% noted by American economist John Kotter over 25 years ago.¹

A need for new design approaches

Economic geographer Bent Flyvbjerg’s research on megaproject statistics provides a stark reminder of the challenges inherent to large-scale projects. Out of 16,000 megaprojects globally, only 0.5% meet time, budget, and benefit expectations. This so-called ‘Iron Law of Megaprojects’ (over budget, over time, under benefits) helps to illustrate the critical need to design programmes differently, emphasising strategic planning, robust governance, and cross-functional stakeholder engagement.² 

Lessons from complex finance transformations

Large, business‑critical finance transformations surface the same transformation challenges seen in many enterprise programmes. Common pitfalls include rushing the start, setting goals that do not fit the organisation’s needs, and underinvesting in programme organisation and stakeholder management across Finance, IT, and the business. Three disciplines consistently make the difference: 

• Comprehensive planning: Establishing clear definitions of success and realistic timelines to avoid off-track scenarios.
• Vigilant programme governance: Employing governance structures that support cross-functional decision-making and stakeholder alignment.
• Iterative methodologies: Utilising hybrid delivery approaches that combine agile with waterfall methods to effectively manage complexity and change.

The solution: Establishing a Finance Transformation Office as the control tower 

Confronted with these challenges, a well-structured Finance Transformation Office (FTO) can serve as the linchpin for effective transformation. Like a control tower, the FTO acts as the centralised hub that directs complex transformation programmes through robust project management and disciplined governance. 

Here’s how the FTO keeps transformation on course: 

• Strategic design and prioritisation: Clearly defining the strategic vision and financial targets, aligning objectives across the organisation. 
• Portfolio and project management: Ensuring the right projects are selected and executed efficiently, maximising impact. 
• Operating model and governance: Streamlining operations with a defined governance structure, mitigating risks. 
• Resource management and capability building: Continuous development of capabilities and culture necessary for project execution.
• Execution and learning: Tracking value creation, fostering a culture of continuous improvement. Projects following a structured framework boast a success rate of 74%, outperforming those without such frameworks.