In the coming year, most organisations will be impacted by some (or all) of the following challenges:
- Local and/or global recession creating economic and financial uncertainty
- Customers facing economic hardship and changing their buying patterns
- How to remain relevant to an ever-changing market and customer preferences.
- The need to balance short-term tactical priorities with longer-term ambitions – coupled with the pressure on C-Suite tenure that is forever reducing.
- Ever increasing reliance on change to deliver critical strategic ambitions
Our experience of helping others tackle these challenges has informed our top 5 topics for C-suite leaders in 2023.
1. Commit to frequent, ruthless strategic prioritisation, with a focus on business capacity
77% of organisations don’t consider business capacity when it comes to strategic prioritisation
When faced with the increasing pace, volume and complexity of projects and balancing business as usual, the challenges around prioritisation are intensified. The focus needs to move from debating a long list of demands to focusing on what is doable.
Three key factors that deserve C-suite attention:
- Business capacity is becoming the biggest constraint on what can be delivered.
- Trade-offs will be required between operational and project demands, and how they are resourced.
- There comes a tipping point when the strain on business capacity has a detrimental impact not only on what gets delivered but also on people’s well-being. How far are you from that tipping point?
2. Change your Target Operating Model discussions
Target Operating Model (TOM) is a label often bandied about and is often associated with the creation of an organisational structure or a technical architecture. That may have been okay when the pace of change was slower, but organisations today are facing permanent unpredictable and uncertain times. The ability to adapt is critical to be able to survive and thrive.
Is the C-suite discussion around a TOM focused on what capabilities your organisation needs, in what timeframe and how best to structure them to deliver your strategic ambition?
A clear example is the bricks-to-clicks evolution in retail. Ten years ago, ecommerce sales as share of total retail sales worldwide made up 7.4%. Today, that figure is around 20% and growing. Way back then, digital was not a core capability, but high street retailers had to adapt and remodel their capabilities to focus on digital. This is about businesses changing their operating models, not an org chart.
3. Improve the way your initiatives are shaped
94% respondents in non-profit organisations do not have an acknowledged way of setting up projects for success.
There’s a common misunderstanding about what shaping a project involves. It does not mean getting on and shaping the solution. It means having the right discussion in the direction and design stages of a project to ensure that stakeholders agree the broad directional options, they are aligned on what ‘good looks like’ and that the consequences of the preferred option are understood and acceptable.
Using decades of data from diagnosing and supporting $31BN of change investment, we can show that the better an initiative is shaped from the outset, the faster the delivery will be. Failure to shape initiatives appropriately is the single biggest source of project failure.
How confident are the C-suite that the way their organisation set up their initiatives for success?
4. Demand change assurance focused on project health and organisational risk exposure
Using a data-driven approach, a review can be completed in 2-3 weeks, not 3-4 months.
According to the CIAA Internal Code of Practice, the role of assurance is to ‘provide information to those that sponsor, govern and manage projects to help them make better informed decisions which reduce the causes of project failure, promote the conditions for success, and increase the chances of delivering the required outcomes cost effectively’.
However, we are not seeing a change in assurance that is commensurate with the increasing complexity and volume of change. We see too many project audits that are focused on reviewing compliance with methodology and project controls, and it simply doesn’t work. Why? Stakeholders, such as Risk Committee members, need to be confident they have appropriate, timely and predictive information to make informed decisions about the risk exposure of the overall change portfolio and key individual initiatives.
Assurance is affordable and proven to improve success rates. With typical project slippage around 3-6 months, a change portfolio that costs $120m per annum can result in avoidable costs in the region of $30m – $60m!
“I’ve seen assurance reports from all of the big 4 and this is the most thorough piece of work I have ever seen. You guys did it better, for 40% of the price, and in half the time of our normal supplier.”
– Risk Committee Head
5. The C-suite will be THE differentiator between initiative success and failure in 2023
Less than 20% of our clients consider their leaders to be often or always effective.
Perhaps the greatest unrecognised impact of increasing volume of complex change is the importance of the C-Suite, NEDs and steering committees.
There is a direct correlation between the relative focus of leaders and the time they spend, and the health and performance of initiatives.
It’s a simple choice. Do you…
- Increase leadership capacity by not working on the projects you want to work on
- Improve the effectiveness of the leadership team
- Accept you are going to fail?
We recently ran a leadership programme for a multinational brand in the insurance sector where we shared different techniques to assess the health of projects. In just 30 minutes, eight Senior Execs who did not know the projects were able to assess eight different initiatives and identify the actions needed to address issues.
How confident are you that you could look at a project, and within 4 minutes, work out what needs to happen to make it a success? More importantly how much time would it also save you?
If you’d like to know more about any topic in this short briefing, please get in touch.